Full and final settlement help thread

latte55

Hi, looking for some advice please. I’ve spent some time reading through the threads but still have some questions.

My husband and I have been in a DMP with Step Change for 4 years now, paying £485 per month. I’ve increased the payment slightly year on year in line with my salary increase and we’re actually really pleased that we’ve paid so much toward our debt. My dad died earlier this year and I now have a small inheritance. We owe approx. £30k across various lenders, all credit cards/loans. I have approx. £15k and really want to try and use this to try and clear our creditors so that we can re-mortgage in a couple of years time once the defaults have cleared our credit files. We really need to re-mortgage in the next few years and I don’t want to still be in the DMP then.

So, my questions:

Given that we’ve been paying via Step Change for so long, is it worth doing a CCA request? If so, can I send a cheque for the £1 fee or does it need to be a postal order? And, if they cannot find the paperwork, how long do we wait before sending letters with f&f settlement offers?

When we get to the f&f settlement offers, I was going to use the template letter on the National Debtline website and work out offers using their formula. If I do this should I use the full £15k available to me when working out the formula or hold some back in case they come back with counter offers?

Is any of this realistic? I know that nobody has a crystal ball but are they creditors likely to accept less than 50% to settle debts that I’ve been paying regularly via Step change for the last 4 years?

Thanks in advance

fatbelly

latte55 wrote: »

Given that we’ve been paying via Step Change for so long, is it worth doing a CCA request? If so, can I send a cheque for the £1 fee or does it need to be a postal order? And, if they cannot find the paperwork, how long do we wait before sending letters with f&f settlement offers?

When we get to the f&f settlement offers, I was going to use the template letter on the National Debtline website and work out offers using their formula. If I do this should I use the full £15k available to me when working out the formula or hold some back in case they come back with counter offers?

Is any of this realistic? I know that nobody has a crystal ball but are they creditors likely to accept less than 50% to settle debts that I’ve been paying regularly via Step change for the last 4 years?

It's always worth doing CCA requests as long as the debts are CCA debts, which it sounds like they are. It doesn't matter how the £1 is paid. I wouldn't make an offer on an unenforceable debt, personally, but in any case I would say to start on the enforceable ones.

That's where the ND factsheet falls down a bit. This is a matter of individual negotiation. You will do well to settle 30k of debt for 15k so definitely don't offer the whole amount straight off.

Yes it's realistic to get sensible offers accepted. Your weak point is that the creditors are getting a lot as a monthly payment and stand to get full repayment in 5 years. Fire off the CCAs first and see who can come up with the paperwork.

latte55

Thanks for this, will do the CCA and see how we get on

WhenIam64

I know that nobody has a crystal ball but are they creditors likely to accept less than 50% to settle debts that I’ve been paying regularly via Step change for the last 4 years?

Debt buyers have a crystal ball in the shape of probability models applied to the pack of debt when they purchased it. Stepchange's job is to make the probability more probable by getting people to pay regularly (arguments both ways on that one)

Yes it's realistic to get sensible offers accepted. Your weak point is that the creditors are getting a lot as a monthly payment and stand to get full repayment in 5 years. Fire off the CCAs first and see who can come up with the paperwork.

As FB says, start with the ones the can collect one and try different offers to see what they will accept. If the creditors can collect in 5 years and they are paying an average of 10% pa themselves, then there is a calculation there on their breakeven if you pay early.

Manceltic

Hi, I contacted PRA Group and offered 50% settlement figure on a debt that is £14000. They refused stating that the full debt has to be paid and no percentage offers will be acceptable.

The debt is from 2011 and initially belonged to NatWest who then sold the debt to Westcote, PRA Group took on the debt this year.

The original debt was £25000 and consisted of 3 debts: 2 loans and an overdraft.

Can anyone give me some advice on what to do next?

Manceltic

Hi, I contacted PRA Group and offered 50% settlement figure on a debt that is £14000. They refused stating that the full debt has to be paid and no percentage offers will be acceptable.

The debt is from 2011 and initially belonged to NatWest who then sold the debt to Westcote, PRA Group took on the debt this year.

The original debt was £25000 and consisted of 3 debts: 2 loans and an overdraft.

Can anyone give me some advice on what to do next?

fatbelly

When did you last make a payment to these and, if you are paying, how much are you paying per month?

Have you done CCA requests on the two loans?

I presume there was never a six-year period when you made no payment?

I've checked back in this thread and PRA do deal, but are tough negotiators. Did you make your offer in writing?

Manceltic

I’ve been paying £50 as I’m unemployed. They did offer me a lower figure but I wanted to show a commitment.

My previous payments were £150/month.

No I haven’t done a CCA request.

I was made redundant in January 2019.

fatbelly

Manceltic wrote: »

I’ve been paying £50 as I’m unemployed. They did offer me a lower figure but I wanted to show a commitment.

My previous payments were £150/month.

No I haven’t done a CCA request.

I was made redundant in January 2019.

OK, the payment you make should be justified by a financial statement (often called a statement of affairs on these boards). It sounds like they may have done a rough one with you, established what you could afford and then you insisted on paying more. That raises suspicion that you have other resources, which clearly is correct.

Frankly if you're on JSA or Universal Credit I can't see how £50 a month is affordable.

I'd suggest changing this to £1 per month and giving them a soa that justifies this (also showing your savings as nil).

Your debt-free period will have changed from under 8 years to 23 years to 1166 years. Good. Now they might listen.

Before making an offer, do CCA requests - there is info on National Debtline.

I wouldn't make an offer until you have seen the paperwork, giving a six month gap from now, and when you make the offer, do it in writing and say that the meney is coming from a third party

Manceltic

Thank you. I did get a redundancy payment back in Jan which has helped me to live.

I will do exactly what you’ve advised and see how I fair.

I’m hoping to gain employment soon, I’m just waiting to hear back from an interview. Which means my financial status will change.