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Full and final settlement help thread

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  • PaulC0
    PaulC0 Posts: 29 Forumite
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    RAS said:
    How recent was the redundancy and how soon do you think it will take to get back into work?
    Redundancy 2 weeks ago

    Currently suffering ill-health and won't be ready for a return to work until next year at earliest 
  • sourcrates
    sourcrates Posts: 29,384 Ambassador
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    edited 4 September 2023 at 11:32AM
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    PaulC0 said:
    RAS said:
    How recent was the redundancy and how soon do you think it will take to get back into work?
    Redundancy 2 weeks ago

    Currently suffering ill-health and won't be ready for a return to work until next year at earliest 
    No need to be stressed, let me just explain how these situations tend to work.

    In your circumstances, you should be paying nothing, if you write and inform your creditors of your situation, its quite likely they will say exactly the same thing, these are all non priority credit debts, that are last in order to be paid when things get tough, you should not be paying these at all right now.

    Settlement offers will not benefit you yet either.

    Only one of your debts has been sold on, the Lowell account. Companies such as Lowell, buy these accounts in bulk, for around 10% of their face value, which is why they can afford to take settlement offers, and original creditors cannot.

    You may obtain a small reduction from your live accounts, but essentially you are still under contract to pay the full amount, until that agreement gets broken, usually by defaulting.

    There is nothing the original creditor can do by way of accepting a significant settlement offer, until that happens.

    That is why settlement offers are usually reserved for much later on in the collection process, after the debt has been sold.

    Your best bet here is to pay nothing until you get back into work, and see how things stand then.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • PaulC0
    PaulC0 Posts: 29 Forumite
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    PaulC0 said:
    RAS said:
    How recent was the redundancy and how soon do you think it will take to get back into work?
    Redundancy 2 weeks ago

    Currently suffering ill-health and won't be ready for a return to work until next year at earliest 
    No need to be stressed, let me just explain how these situations tend to work.

    In your circumstances, you should be paying nothing, if you write and inform your creditors of your situation, its quite likely they will say exactly the same thing, these are all non priority credit debts, that are last in order to be paid when things get tough, you should not be paying these at all right now.

    Settlement offers will not benefit you yet either.

    Only one of your debts has been sold on, the Lowell account. Companies such as Lowell, buy these accounts in bulk, for around 10% of their face value, which is why they can afford to take settlement offers, and original creditors cannot.

    You may obtain a small reduction from your live accounts, but essentially you are still under contract to pay the full amount, until that agreement gets broken, usually by defaulting.

    There is nothing the original creditor can do by way of accepting a significant settlement offer, until that happens.

    That is why settlement offers are usually reserved for much later on in the collection process, after the debt has been sold.

    Your best bet here is to pay nothing until you get back into work, and see how things stand then.
    Thanks for the info, I have a better understanding now

    Talked to Lowell this morning and they were very accommodating. 

    Talked to Freemans and they acted exactly as you described above (live account). They offered reduced payment terms on receipt of a budget plan, which I won't be sending. I have until the start of October to respond when the account may..."get a default notice being issued and account being transferred to an external debt collections agency". This is what I need to happen to get closer to F&F stage!?!?

    How should I approach Virgin Money? 7k CC debt, currently in arrangement and paying 1% monthly

    Will any funds from redundancy affect my approach? 
  • sourcrates
    sourcrates Posts: 29,384 Ambassador
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    That redundancy money is your only emergency fund, I would not mention that to them, you are much more in need of it than they are, Virgin will almost certainly take the same approach as Freemans.

    Please keep in mind, these are non priority debts, they should be last on the list for action.

    If you have not done so already, make them all aware of your circumstances, tell them payment is just not affordable right now, due to your situation, they should hold collection activity until your circumstances improve.

    You can also ask them to write off your debts, don`t be afraid to use all the weapons in your arsenal, especially if your going to be long term sick, use it to your advantage as best you can.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • tigergambit
    tigergambit Posts: 70 Forumite
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    edited 3 October 2023 at 10:26PM
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    PP+ are managing the following debt:
    Capital Resolve (ex Sainsbury's Bank) £2900
    Ikano Bank £630
    Moorcroft Group Plc (ex Santander) £3860
    PRA Group Ltd (ex Barclaycard) £5040
    Santander Cards £2730
    Tesco Bank £10,020
    NewDay £3,080

    Update:

    So things grind slowly on. I have heard back with CCAs from Tesco and Capital/Sainsbury's.Made F&Fs to both around 6weeks ago. Nothing from Tesco, Capital have asked for SoA and health info. New Day can't find the CCA 😁, the two undefaulted (Ikano and Santander) have notified that they are defaulting😁 and nothing back from the others.

    So far so good 🙏
  • PaulC0
    PaulC0 Posts: 29 Forumite
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    PaulC0 said:
    RAS said:
    It is probably to early to offer full and finals. Chill, or share a bit more information. Is interest frozen?
    OK, here goes

    Account 1; Lowell, purchased from Jacamo after defaulting on payments. £3000 original balance, now at £1800. I reduced payment to £25 per month (from £100) a few months back. Changed that to £10 today. Interest Frozen. 

    Account 2; Freemans, £3000 balance and in special payment arrangement for another 4 months before review. Interest Frozen.

    Account 3; Virgin Money, £6900 balance. In special payment arrangement of 1% per month. Interest Frozen. 

    Currently on ESA after redundancy 
    Update;

    Account 1 now paid and settled after my reduced settlement offer (35%) was accepted 

    Account 2 new arrangement in place for 6 months, possible 10% settlement offer available. Should I push for more?

    Account 3 remains the same, although I missed a call from them today. I suspect that's to probe into whether I can come out of current reduced payment arrangement. 
  • Onaroll
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    Hi- looking for a bit of advice!

    I have an old Very debt, defaulted and sold on to Lowell in March 2021. Original amount was £1880, and I’ve been paying £50 a month since June 2022. Debt now stands at £1030. I’ve just had to reduce my payments from next month due to circumstances (my rent has increased 50%)  to £10 a month. They have all the correct paperwork etc. 

    Is my best course of action to keep plodding on, or would it be worth offering a full and final settlement? I’d like it done and dusted as I’ve been digging myself out of a debt hole since the pandemic and this is the last thing now. 

    I’m not sure what’s worse on my credit file- partially settled or having it listed as a defaulted debt for the next 3 years? 

    Many thanks 😊 
  • fatbelly
    fatbelly Posts: 20,972 Forumite
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    It's not going to make much difference to your credit file. The default stays for 6 years.

    If your are in a position to offer settlement that is a good use of your cash.

    However, do a cca request first to check that it is enforceable. In the past the Shop Direct group have not been very good with paperwork
  • Happydude5265
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    Out of curiosity with regards to full and final settlement, how do you know the company will not sell on the debt they have said they have written off? 
  • DjangoUnchained
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    Out of curiosity with regards to full and final settlement, how do you know the company will not sell on the debt they have said they have written off? 
    Make sure you get it in writing before you pay, and keep proof of payment.
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