Advice on partial versus full and final settlements

stugall

Hi

Would welcome some general views.

I have been saving up quite a bit to pay off some debts and doing some extra work here and there, and want to pay off some credit cards and small loans.

Recently I was in touch with a) Halifax' division of Blair, Oliver and Scott; and b) Cabot, to whom I owe £3,200 and £3,327 respectively.

I have been making minimum payments, interest free, to both for a while.

They offered me - on the phone - ''partial" settlements of £2,380 and £2800 respectively if I settled by card.

I asked them if the debts on the ''credit file" would be wiped clean to £0 and they relied ''yes'' but added: ''your file will be marked ''partial settlement."

Questions:
1. Would they be able to sell on these debts to another company after I paid; and
2. Has anyone paid less, but had ''full and final'' settlement marked?

I am a bit dubious about dealing with banks, so asked for it all in writing, but nothing in the post as yet...

Views........>???????????

Thanks
Stuart

immoral_angeluk

Never ever accept partial settlement, or anything where they don't put in writing that it's a full and final settlement. Chances are they'll chase you for the debt further down the road.

AMBERSHADOW

I have been offered a similar thing But mine was in writting, although I couldn't take them up on the offer I did wonder this myself as on your credit rating it will say partial payment not paid in full

immoral_angeluk

Unless it was full and final the debt would NOT be settled and any DCA would be able to buy the debt and chase you for the remainder.

fermi

Before you accept an offer you should have it in writing that:

a) Your/their offer is to be accepted a "Full & Final Settlement" and you will have no further liability for the debt.
b) The entries on your credit references should be marked in some way to indicate that the debt is settled/satisfied or partially settled/satisfied, with no outstanding balance.

I should just add that it IS acceptable in a "Full & Final Settlement" for the entry on your Credit Reference Files to be marked as "partially settled" or "partially satisfied" AS LONG as there is no balance outstanding.

Because there has been some confusion on this issue I checked this with both the Information Commissioner and National Debtline. Particularly with NDL, as their factsheet makes no mention of it.

The Information Commissioner's Office directed me to one of their publications in which the wrote:

Where the lender has accepted as part of a negotiated settlement a payment that is less than the outstanding amount and the customer has agreed as part of the settlement how their credit record will be affected:

In these circumstances, we understand a lender may be reluctant to mark the entry as ‘satisfied’ or ‘settled’. However the entry must record the position adequately, for example, by showing that no further monies are expected and the account was partially paid.

And National Debtline clarified the difference between that and their factsheet by writing:

We note that you require clarification regarding full and final settlement offers because the information on our fact sheet and the Information Commissioner’s website seem to differ.

You are correct in thinking that it is important for you to have confirmation from the creditor that your offer is accepted as full and final settlement. You must also ensure that you keep this confirmation for at least 6.5 years in case the debt is passed onto another debt collection agency in error.

If the creditor will agree to mark the credit file as satisfied this would be an excellent result for you as it would look better on your credit file. However, your credit file should show an accurate credit history and to mark a debt as ‘satisfied’ when it has only been partially satisfied could be deemed to be misleading. Therefore the creditors are well within their rights to mark your credit reference file partially settled/satisfied.