Short/Partial Settlement

kymbee

Have just over £7,500 debt on MBNA credit card. Due to drastic change in circumstances am now unable to pay off. Have been paying reduced amount for past 6 months with interest frozen. Have contacted MBNA with an offer of £3,000 in full and final settlement. They are not prepared to accept this offer and have said that they would consider the £3,000 by way of a short/partial settlement. I understand from their letter that this will be recorded with credit reference agency for a period of 6 years. Not sure how this would effect applying for a re-mortgage in the future. Does anyone have any experience of this kind of agreement?

Thank you.

Xbigman

This is a dodgy form of settlement. It gets recorded as a debt on your credit record, which will kill your chances of a remortgage. It also seems that the companies who do this, which include MBNA, then sell the remaining debt on to debt collectors who supposedly have no right to the money but just harrass you until you pay up.
Unfortunately if you want an F&F settlement your best bet is to default with MBNA, then get moved to a debt collection agency and negotiate with them. This will also wreck your credit rating. On the subject of which, have you checked it recently? If you are making reduced payments it may already be affected.

Why are you remortgaging? If it is to clear debts then you should give this very carefull thought.
Regards


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