Full & Final Payment

PT66

Although I am managing to cover my credit card payments, I feel £600 a month could be better spent as this is just about covering the monthly interest. A friend of mine said that if I contacted the credit card company and offered them about 60% of the total bill they will accept it as full and final payment and will close the account. Sounds a bit too good to be true. Has anyone had experience of this (my mate did not have the funds to go through with it) and if so how does it leave your credit rating? If it is the case then I could (try) and raise the money against my property which would be much lower than the £600 a month and still leave me with over 50% equity in the house.

Money_Mad_3

Be careful make sure that the company will not make a note on your credit file, Although we had a few accounts that went into default we were offered a settlement figure lower than what was owed and even though we paid this, the company stated this on our file it said satisfied but also stated "Partial Settlement" and this has stayed on for 6 years. The company was the dreaded Nat West. If you get an offer of partial settlement make sure you get everything in writing.

CLAPTON

there is no possibility in your circumstances

POSSETTE

CLAPTON wrote: »

there is no possibility in your circumstances

wny? is it because OP is paying payments ok, and not defaulting?

CLAPTON

POSSETTE wrote: »

wny? is it because OP is paying payments ok, and not defaulting?

well, lets say you borrow 30,000 and then go and ask your lender whether they will be happy to acccept 15k in settlement... and lets say everyone knows this too ...

now its true the Full and Final (F&F) settlements can be negotiated but it goes something like this

-you stop paying the monthly payments for say 3-6 months
-they phone you 3/4 a day for a few months
-they then default the loan which will trash your credit rating for 6 years
-they may apply to the court for CCJ
-if you have property then they will probably go for a charging order.
-if its a lot of money they may try to make you bankrupt or force the sale of the house

-however if you don't have any assets then after a year of so
- they may sell the loan on to a DCA
-and then the DCA may accept a F&F

johnllew

With that much equity why not just do the honest thing? Raise enough on your property to cover the whole of the CC debt and be done with it. You know you'll feel better if you do and you won't have to go on posting on forums trying to find out how to renege on your debts.

PT66

johnllew wrote: »

With that much equity why not just do the honest thing? Raise enough on your property to cover the whole of the CC debt and be done with it. You know you'll feel better if you do and you won't have to go on posting on forums trying to find out how to renege on your debts.

Not trying to renege on the debt - these companies have had the shirt from my back and then some!! So if there was a legitimate way of reducing the debt then it would be an option worth considering.

latecomer

PT66 wrote: »

Not trying to renege on the debt

Thats what it sounds like. you borrowed the money so you should pay it back. As the others have said, if you did manage to get them to accept a lower payment they can and should trash your credit report to prevent you doing the same to someone else.

PT66

latecomer wrote: »

Thats what it sounds like. you borrowed the money so you should pay it back. As the others have said, if you did manage to get them to accept a lower payment they can and should trash your credit report to prevent you doing the same to someone else.

With the greatest respect, you do not know the full circumstances - mine, as with many poeple have changed dramatically (divorce, business closure), so if I can make savings anywhere I can they will be beneficial to me. I would rather give more maintenance to my daughter and help set her up in the future and certainly have no plans for any more borrowing.

nickmack

PT66 wrote: »

So if there was a legitimate way of reducing the debt then it would be an option worth considering.

The only way to reduce the debt and not suffer any adverse effects is to continue paying towards the outstanding amount until it is repaid fully. It sounds like in your situation, because you don't appear to have a problem with payments, this is the best option.

Usually, the only circumstances a creditor would consider a smaller settlement, is if the account is in default having already missed several payments and they are convinced you have insufficient assets to raise enough capital to cover the amount owed.

If then, they assess it's unlikely they will ever recover the full amount, they may accept partial payment.

However, this would not be without impact on the debtor. The missed payments and default would be noted on your credit file. You will have serious problems obtaining any sort of credit for 6 years if a CCJ is filed against you.

latecomer

Of course I dont know the full circumstances, only what you've posted. you said you can meet the payments but would rather spend the money on something else. To me that sounded like you were trying to find out if you could get out of paying the full amount owed.