Negotiating a final settlement on a card?

racheyg

I went to a candle party last night (!). I overheard a woman telling another that a friend of hers called all her credit card companies and said that she couldn't afford to pay them off in full, and would they accept 'X' amount and be done with it. Some were 25% of the outstanding debt. Apparently, they accepted, she paid lump sums to cover some of the debt, and the slate was wiped clean.

Do you reckon this is just part of a story (ie, she had an IVA) or are people starting to do this, and credit card companies are accepting as they are worried they won't see any return?

normanmark

Some card companies might do this, but it will damage your credit rating in the future.

dazza.mk

The usual response when this question is asked is that the Credit Card companies won't even consider negotiating until you've 'proved' you are unable to pay by missing a couple fo payments etc.

At which point you may well be able to 'clean the slate' but only at the expense of your credit history being shot to pieces for a number of years.

CLAPTON

It can work in the following circumstances

stop paying for a few months
you provide then with a income and expenditure sheet showing why you can't pay.
they will then default on the debts and trash your credit file for 6 years
they will harass you to pay.. phone call/ letters etc
they may agree to freeze interest and charges assuming yoru I&E sheet show you can't pay.
they may go to court for a CCJ
they may go to court for a charging order on the property (assuming you have one)

they may then sell the debt to a debt collection agency
then you have a good chance of making a F&F offer.

racheyg

So it's not worth it then?!!!!!

I'm not going to do it, it's just that the flavour of the evening seemed to be that credit card companies were worried they wouldn't get anything back, so were starting to accept almost anything.

I think someone had been smelling the wrong kind of candles!

geoffky

Here is the problem....people selling/going to candle parties ect and paying through the nose for what you can buy in a shop for 10p each...no wonder we are in a mess

racheyg

Actually it was a really cheap night out; much cheaper than going to the pub.

But I hear what you're saying. Thankfully we all help each other with small businesses, the money just keeps swapping hands.