We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

F+FS can it backfire?

Hi

Been on DMP for about 6 months, mking regular payments

I have a lump sum coming and am considering offering FF+S to my creditors, by sending a letter explaining that I will pay off the creditor who offers the best terms (will get template letter from site)

i know its early and most wait for 1 yr plus - but once i have it, i feel i should offer

the worse that can happen is everyone says no - right?

thanks
«134

Comments

  • Ames
    Ames Posts: 18,459 Forumite
    I think that's the worst that can happen.

    Don't forget though to get it in writing that it's a full and final settlement, not a partial settlement. Just to make sure they don't come after you for the rest.
    Unless I say otherwise 'you' means the general you not you specifically.
  • fatbelly
    fatbelly Posts: 21,554 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    I think YOU need to make an offer. (6 months is plenty of time for them to be considering selling the debt on, so your timing is OK)

    If you just ask them for their terms, they'll just tell you what you owe them

    And if you propose to tell them that you're only going to offer one of them a F&F that raises a lot of questions.

    I suggest you read the factsheet and follow that guidance, but start low (say 15%)
  • I hate to be pessimistic, but if you are settling only one creditor, then them saying no is not the worst that can happen.

    On a DMP, any additional money for debt repayment should be distributed pro-rata amongst all creditors. If you are telling all creditors that you are going to be settling only one of them with a lump sum, you may find the creditors will no longer accept your reduced DMP payments and demand full payment as they will think you are not playing fair.

    If you do genuinely want to pay off one creditor, rather than reduce them all, then ask all of them to provide F&F settlement figures, take the best, but do not tell the other creditors that there was extra money available, just refuse the F&F settlement offer of the creditors you won't be paying - but you need to be very careful.

    If your DMP is administered via Payplan or CCCS, they would not allow you to settle one creditor.
    [STRIKE]
    DFW Nerd number 729
    [/STRIKE]
    Debt Free & Proud
  • hey, thanks for the replies

    The dmp is administered but whilst they advise against 1 !!!!!! and suggets pro rata'd payments, I understand if you make a full final settlement they have no option but to accept and then spread the additional money available across the other creditors?

    I get the idea of asking for Full settlement figures and then going with the lowest, but wonder if anyone has a template letter which I could use?

    Thanks
  • Deep_In_Debt
    Deep_In_Debt Posts: 8,579 Forumite
    Part of the Furniture 1,000 Posts Photogenic Mortgage-free Glee!
    I'm on a dmp and have cleared off some of my debts by way of F&F's and CCCS have been fine with that. It just means the other creditors receive more on a monthly basis so it keeps them quiet.

    There is a good template letter on the National debtline website.

    Good luck.
    Debt 30k in 2008.:eek::o Cleared all my debt in 2013 and loving being debt free :)
    Mortgage free since 2014 :)
  • thanks for advice. I have taken a template letter from National Debtline website and tweaked it

    One question - do you think I should be making it clear I am sending the letter to several creditors to encourage them to 'fight' for my money, or not?

    Thanks
  • Deep_In_Debt
    Deep_In_Debt Posts: 8,579 Forumite
    Part of the Furniture 1,000 Posts Photogenic Mortgage-free Glee!
    I personally wouldn't let all the creditors know that you have this money. Just send individual letters to each creditor with your offer. Don't expect them to accept your first offer though - you may have a bit of to'ing and fro'ing. I was a bit cheeky with one creditor that I wanted rid and said that if they don't accept it, I'll offer it to another creditor. They soon accepted!
    Debt 30k in 2008.:eek::o Cleared all my debt in 2013 and loving being debt free :)
    Mortgage free since 2014 :)
  • I see. any views on the following as an appropriate pitch.....


    I write with reference to the money which you are claming on the above account.
    .
    However, I can raise £2500, via a gift from my parents which they have offered on condition of full and final settlement of a debt, and I want to offer this an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released for any liability.

    I also request that, if accepted, you will make an entry on a credit reference agency file relating to the above account as "satisfied" in full.
    A payment is due from xxxx, at the end of January and this will be made as standard. If you accept the offer, the final payment of £2,500 will be made by 15th February and no further payment from xxxx will be made

    Please provide written agreement of this offer and method of payment.

    I look forward to receiving your reply
  • Deep_In_Debt
    Deep_In_Debt Posts: 8,579 Forumite
    Part of the Furniture 1,000 Posts Photogenic Mortgage-free Glee!
    That looks ok to me. I used the NDL letter as well.

    Make sure you start your offer low though then you have room to negotiate. My personal experiences are that the original creditors would accept nothing less than 70% of the original debts, whereas DCA's accepted 45% and 55% as they buy the debts for pennies in the £ and I'm sure I could have got an even better deal. I waited for my debts to be "sold on" before I made the offers.
    Debt 30k in 2008.:eek::o Cleared all my debt in 2013 and loving being debt free :)
    Mortgage free since 2014 :)
  • fatbelly
    fatbelly Posts: 21,554 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    You are offering 2500 in F&F - what percentage is that?

    It's good that you have made it clear that this is coming from a third party
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 346.5K Banking & Borrowing
  • 251.3K Reduce Debt & Boost Income
  • 451.3K Spending & Discounts
  • 238.7K Work, Benefits & Business
  • 614.1K Mortgages, Homes & Bills
  • 174.7K Life & Family
  • 251.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.