Full and final settlement help thread

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
2.9K replies 1.6M views
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  • sandpit_warssandpit_wars Forumite
    1 Post
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    MoneySaving Newbie
    Hi,
    Me and my husband have been on a DMP with stepchange since June 2019, paying £550 per month. We started with 10 creditors and have cleared 4 of them. We are due to be debt free in July 2021. We have paid £6,706 so far with £8,420.98 remaining. Creditors include, Wescot, Cabot Financial, Salary Finance Ltd, Wilkin Chapman Solicitors, Wescot and HMRC. 
    We have saved up some money with the intention of buying a house, it has quickly become very apparent we won't be getting any kind of Mortgage while the DMP lingers on. 

    My question is, is it worth trying to use what we have saved to get F and F settlements and just start our house fund over again? Or given that we will be debt free in 13 months time, is it unlikely we will get any reasonable offers from our creditors?

    Thanks in advance 
  • fatbellyfatbelly Forumite
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    Hi,
    Me and my husband have been on a DMP with stepchange since June 2019, paying £550 per month. We started with 10 creditors and have cleared 4 of them. We are due to be debt free in July 2021. We have paid £6,706 so far with £8,420.98 remaining. Creditors include, Wescot, Cabot Financial, Salary Finance Ltd, Wilkin Chapman Solicitors, Wescot and HMRC. 
    We have saved up some money with the intention of buying a house, it has quickly become very apparent we won't be getting any kind of Mortgage while the DMP lingers on. 

    My question is, is it worth trying to use what we have saved to get F and F settlements and just start our house fund over again? Or given that we will be debt free in 13 months time, is it unlikely we will get any reasonable offers from our creditors?

    Thanks in advance 
    What will cause problems with a mortgage application is the defaults on your file. They stay for 6 years.
    Settling your debts using full & final settlement deals would seem to be a good use of your money. However, at the rate your creditors are being paid they may not give very good deals.

    Having said that, everyone is  desperate for cash at the moment so give it a go!

    HMRC don't generally do deals but you can at least have a discussion with the rest.
  • colink24colink24 Forumite
    71 Posts
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    Hi,
    Me and my husband have been on a DMP with stepchange since June 2019, paying £550 per month. We started with 10 creditors and have cleared 4 of them. We are due to be debt free in July 2021. We have paid £6,706 so far with £8,420.98 remaining. Creditors include, Wescot, Cabot Financial, Salary Finance Ltd, Wilkin Chapman Solicitors, Wescot and HMRC. 
    We have saved up some money with the intention of buying a house, it has quickly become very apparent we won't be getting any kind of Mortgage while the DMP lingers on. 

    My question is, is it worth trying to use what we have saved to get F and F settlements and just start our house fund over again? Or given that we will be debt free in 13 months time, is it unlikely we will get any reasonable offers from our creditors?

    Thanks in advance 
    I came here to post this exact question! I am in a very similar position to you. Got savings ready for a mortgage application, but DMP doesnt end for another year and my debt is about the same as yours.

    I spoke to a mortgage advisor this morning who said that I should not try to offer F&F settlement as it will only further affect my credit file and make a mortgage less likely. He said I should use my savings to clear the debts in full, then look to continue to rebuild credit file over the next 6-12 months. Not entirely sure how accurate this info is, as I have read many threads where its been said that partial settlement vs full settlement is largely irrelevant once account is defaulted.

    Interested to hear further replies on this. 
  • fatbellyfatbelly Forumite
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    Every lender makes their own decisions based on the information available to them.

    That's why a global 'credit score' is not a lot of use, though you can argue that it's an indication. It also means that I can't be definitive about how someone will view your file and neither can a mortgage adviser.

    What I can say is that defaults are not good news and the only way you get rid of them once they're there is to sit out the full six years.

    It's true that, while the entry remains the difference will be between a 'settled' mark and a 'partially settled' mark. You have to make a decision about the value of that. So a 99% settlement for a 'partially settled' mark probably isn't worth the bother. 50% deals, and keeping 4k in your pocket might be worth doing.
  • Honey_Monster1Honey_Monster1 Forumite
    1 Post
    First Post
    MoneySaving Newbie
    Hi all, new to the forum, v quick overview of the situation:
    I have 9 creditors all of which have now defaulted. 7 of these are with DCAs the other 2 in the process of being moved away. I have been in a DMP with SC for 6months paying £440 on a debt of £66k (12y plan).
    There is the prospect of a lump sum (5k) being made available to me in the next month for an [email protected] payment. Is is too soon to reach out to a creditor to take their temperature? If so where should I start in terms of discount?
  • fatbellyfatbelly Forumite
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    When you say 'moved away', do you mean 'sold on'? That will be happening to most of your debts now and so I would say yes, now is a good time to be making offers.
    We suspect the value of debts has fallen and so your creditors will be considering taking a big hit.
    If you can offer 25% (i.e. 25p in the £) you may well find they are interested. Do it in writing and say that the money is coming from a third party (which it is, indirectly)
  • edited 5 July 2020 at 5:53PM
    HalfwaythereHalfwaythere Forumite
    87 Posts
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    edited 5 July 2020 at 5:53PM
    Hi I am looking for advice on wether full and final settlement offers is a realistic option for me. I owe around 19k and have paid back 27k after starting a DMP the end of 2017. I have 6.6k on accounts that are Currently marked as arrangement to pay and 2 defaulted accounts which I would like to offer on, these are
    intrum 4.6k
    Link financial 7.7k
    I am currently paying around £250/282 a month towards these and they would be paid in full with the rest of my account in April 2022. I would like to start saving for a mortgage.
    I now have 5k available to me to put on the debts. I was thinking of offering this between the two defaulted accounts which would be an offer of 40% on each. 

    What do you think my chances are on this?
    Thanks
  • fatbellyfatbelly Forumite
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    So you owe 19k:
    intrum 4.6k
    Link financial 7.7k
    other 6.6k
    and you have 5.5k

    I think I'd start negotiations with all of them by offering (National Debtline standard letter) 25% and see what comes back.
    It would be nice to get the AP ones settled as they are going to hang around on your report for a long time otherwise, but I think I'd try for settlements with all of them.

    The negative is that your dmp completes relatively soon. The positive point is that a lot of companies are desperate for cash

    Have you done cca requests on any of these?
  • 7NX7NX Forumite
    11 Posts
    Name Dropper First Post
    I've seen a lot of talk about CCA requests, but I'm not entirely sure what they are / how they're relevant. Could anyone provide some additional information?
    Many thanks!
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