Off the Cuff

Miss_Poohs

Sitting mulling the situation over - as you do, and I was wondering.......

With the current climate as it is, do you think if debtors were offered a lump sum as a full and final payment, would they take it and run, or do you think they would be inclinded to stick around and draw the lifes blood out of you?

My DH has a DAS (Scottish system) 163 (13 and a half yrs) payments of £500 per month :eek: .

Most of this is from NR for a loan of £25000, but with the interest front loaded thats what bumping it up for us.

The debts are NR, Lombard Direct and Marks & Spencers.

He has only being paying this since July with Payplan, but I was wondering about how much they would be looking to recover if offered the dosh up front.

Incase your wondering where the money would be from, it would be my dad - which DH is dead set against accepting - his mess, his respsonsablity, which is fair enough, but I'm curious.

Any idea?

Deep_In_Debt

It's certainly worth a try. I found it easier to negotiate better settlement figures when my debts were passed to DCA's as they buy the debts for peanuts. The original creditors would accept nothing less than 70% whereas the DCA's accepted 45% and 55% (still think I could have done better!).

Miss_Poohs

With the debts being covered by a Debt Arrangement Scheme (DAS) I think it would have to be done via that - perhaps using PP as the negotiator, I'm really not very sure.

With the debt being protected by DAS it won't go to a DCA, provided it's paid ofcourse!!

Deep_In_Debt

PP will probably be able to negotiate for you or they will have standard letters that you could use to send to your creditors offering them a f&f. Other than that, not really sure what else to suggest.

Miss_Poohs

I think I'll phone the DAS man and ask - as I'm not sure, and while my dad is by no means loaded theres a limit to how much he can help and I don't think the debts my DH has accrued would be bought off lightly.

Worth asking though eh?

Jx

Deep_In_Debt

Defo worth asking. If you don't try you don't get. And in times of credit crunch, you just never know. It may work out that by offering a f&f that your creditors may get back more than going through a DAS (although I have to admit, I'm not familiar with DAS) and they will get the money quicker so you could always use that as a negotiating tool.

coolcait

Hiya Miss Poohs

I think it's definitely worth giving it a go. I think that the formal request would probably have to go from your DAS advisers, but I don't see why you shouldn't draw up the proposal if you wanted. Given the kind of workloads money advisers are having to deal with right now, he might even be quite grateful if you did it!!

Can I offer a couple of ideas on things to include (if you feel they're right for your circumstances).

First of all, I'd point out that you opted for DAS because you were committed to paying your debt back in full, even though it would take over 10 years to do so.

You could mention that you have been affected by the difficult and unpredictable financial circumstances which the country is currently experiencing. As a result, you are finding it more and more difficult to continue with the DAS, and it is with regret that you have taken advice on other options. (Personally, I wouldn't bother giving them detailed explanations of your circumstances at this stage. I don't think they care a jot! :rolleyes: And, if they want to know more, they can write to you).

I'd let them know that, having taken advice from a number of free, independent sources (that would include us :rotfl: :rotfl: ), you have been told that a Protected Trust Deed or bankruptcy would both be viable options for you.

I'd add that, having looked at the average return for creditors from PTDs or bankruptcy, you have been shocked by how little they will actually receive if you opt for BR or PTD. Tell them that, going by the Accountant in Bankruptcy's statistics for 2007-08 http://www.aib.gov.uk/Resource/Doc/4/0000667.pdf

- only 923 of the 3743 sequestrations which ended in 07-08 paid a dividend. Of these, a dividend was paid only to preferred creditors in 222 cases.
- Of the 701 cases which paid a dividend to ordinary creditors, 376 cases paid a dividend of less than 50p in the pound (265 paid less than 25p in the pound).
- The average time taken to wind up sequestrations during the year was 5 years 2 months.
- Even with a significant rise in dividend payments in Trust Deeds (compared to previous years), the average dividend paid to ordinary creditors – in cases where a dividend was paid – was 27.9p in the pound. A dividend was paid in 4119 cases out of 6250.

- In the 2131 cases where no dividend was paid to ordinary creditors, the accounts show that £7,720,120 was received into the trust deed accounts. £6,724,608 of this sum was claimed by trustees in fees and expenses.

- the average trust deed runs for 3 years, but some may run for longer.


I'd then make the point that you can offer them [whatever you can offer them, allowing for some negotiating fat], in full and final settlement, which can be paid within 'x' days/weeks months of their written acceptance of the offer. Point out how well this compares to the dividends on offer through bankruptcy and PTDs, and how much quicker it will be settled compared to BR, PTDs and DAS.


Then let them know that this offer is only possible due to the kind generosity of family, and that you must, therefore, ask for their decision, in writing, within 21 days?/28 days?, as the offer cannot be maintained any longer than that.


I have absolutely no idea if it will work or not. But it's definitely worth giving it a go!!


Good luck

Miss_Poohs

WOW - worded like that it sounds like a deal LOL!!

I think it's worth a try - DH mite need convincing, but I guess the worst thing that can happen is they'll say "no".

Miss_Poohs

How rude of me, forgot to say - Thank You Coolcait.

Jx

coolcait

You're very welcome, Miss Poohs!! :beer:

I'll keep my fingers crossed that it works for you.