MBNA..settlement? Sounds a bit iffy!

monkeyintrouble

I owe MBNA £5390 on a personal loan, normal monthly payment being £137. Since going on a DMP all I have been giving them is £14.50. They have been writing to me and ringing me up frequently saying they will accept £43 a month to keep the account from DCA. Obviously I have told them I dont have the extra, only available income is stated on my DMP.
They have written to me offering what I thought was a full and final settlement offer of £1900, but I must agree by Friday and pay the £1900 by March. I rang up MBNA and asked would that definitely be a full and final settlement IF I could raise the money. She replied it was called "A SHORT SETTLEMENT" as the full amount of £5390 was not being paid. She did say the remainder of the balance would be written off and account closed.
Has anybody heard of the term "short settlement", and does it mean the same thing? I still have to find a way of raising the £1900 yet but want to be sure Im doing the right thing first.

RAS

Hi

You must talk this through with your DMp provider (hopefully a free one?), as by favouring one creditor you are breaking the agreement you have made with all other creditors.

If they find out (and it will be recorded on your credit record) then all your other creditors could refuse to pay ball.

monkeyintrouble

I have spoken with CCCS today and they said it would be ok as long as I wasnt taking on anymore debt and the £1900 was a "gift" of a family member or something like that. Then this would free up the monthly payment that MBNA have to be divided between other creditors.
I really dont know what to do as I would be calling in a BIG favour to get the money, and I dont want to rock the boat with CCCS or any other creditors.

RAS

Ok

As long as they are happy, then consider it.

BUT how are you going to repay he £1900?

MrsTinks

Make sure you get it in WRITING that this will settle the debt... I've never heard the term "short settlement" but if they will put on paper that this would settle the debt and the remainder will be written off and not pursued at a later date by them, their agents or sold to a 3rd party then fair enough

monkeyintrouble

I dont intend to borrow it. Im trying to think of ways to raise it by selling things I dont really need. Just seems a hell of a saving on the capital owed

monkeyintrouble

MrsTine wrote: »

Make sure you get it in WRITING that this will settle the debt... I've never heard the term "short settlement" but if they will put on paper that this would settle the debt and the remainder will be written off and not pursued at a later date by them, their agents or sold to a 3rd party then fair enough

Yeah, I've never heard of "short settlement". I was thinking of maybe the MBNA take my £1900 and sell the remainder to a DCA who will persue me for the balance. Be interesting to see if anyone else on here has been offered a similar deal

suewiththeblues

no!!!! search 'mbna short settlement' on here .. i have just had the same nonsense from them, i think all it means is there i no guarantee DCA's wont chase you somewhere down the line for the remainder. it has to be full and final settlement!

RAS

Partial Settlement is OK, as long as they confirm IN WRITING that they will not pursue you for the debt or sell it on to another DCA.

Miggie

Hi there,
I'm having the same thing with MBNA - they've offered to wipe off 75% of my debt if I pay them the remaining 25% (approx 1500). I have a thread going here: http://forums.moneysavingexpert.com/showthread.html?t=1384993&highlight=MBNA+final+settlement

I still haven't had a signed letter from them but will be happy to let you know when I do and what happens.

I've asked them for a copy of my CCA and they've 4 working days left to do so.

Payplan, who administer our dmp, are ok with our paying MBNA off as it is such a large amount to clear from our debt. We have said that the money will be a gift from relatives.

thepinkladez_2

GO FOR IT!!

it isnt a trick or anything on mbna's half. i have been through the same thing the back end of last year ( incase anyone thinks i work for them or anything have a look at old posts!) they also called this a short/partial settlement. I had this sent in writing, i paid the amount and they settled the account. I checked my credit file and as promised my account shows up as partial settlement, £0.00 balance and then marked as settled.

if you can pay this then go for it, as it is all legit! i now have more money to pay towards my other creditors.:j