Reduced full & final settlement

custard_cream_3

Morning all.

The only debt my wife and I were left with following my banruptcy last year was the joint current account overdraft of £5000. The bank (HSBC) have now written to my wife demanding either full repayment of the amount, or a satisfactory repayment proposal. My wife has an Egg Card with 0% until well into next year, so we're thinking of offering HSBC a full and final settlement of £4000 for the £5000 debt.

Do you think they'll accept this? My thinking is £4000 is a hefty percentage of the full balance, is clean and simple and is also far more than they'd get if they sold the amount to a debt collection agency.

Does anyone have any experience of this?

Much love.

CC

spenderblender

This might be a bit of a stupid question and, i am sure someone will be along in a mo to give advice but, why wasn't this debt brought in with the rest to the bankruptc?

custard_cream_3

Not a stupid question! Because the overdraft was joint, the bank are going to my wife, who isnt bankrupt, as we were joint and severally liable.

startagain_2

Hello custard cream,

In my dim and distant past I made full and final settlements to a number of creditors... bank,loan and credit cards. I offered 50p in the £ and they bit my hand off!!!! It made me realise (and from reading the posts on here) that I had offered too much and could probably have got away with a lot less. I would start at £2k - seriously!

HTH

SA

TehRoflcopterz

I too would start much lower than that (£4k offer), I'd go in at 30p per £1 debt (so that's £1.5k) as a starting point.

That's not an unreasonable amount to offer, the worst the could do is say no... so then you negotiate further.

fiveyearplan

I would start even lower at 20% with a view to going up to 50% if you're happy with that. I believe most dca's buy debt at 10% and I've heard MBNA settle for 33% quite happily. If you start at 50% they'll think you can pay more.

fiveyearplan

You also need to make a few conditions of your offer
- they mark her credit file as satisfied - not partially satisfied
- they don't sell the debt on
- there is another important one but can't remember at the moment

startagain_2

fiveyearplan wrote: »

You also need to make a few conditions of your offer
- they mark her credit file as satisfied - not partially satisfied
- they don't sell the debt on
- there is another important one but can't remember at the moment

Thanks fyp - I forgot to mention that I was given written confirmation of the above before any cash exchanged hands!

SA

fiveyearplan

Thanks for that SA! Custard Cream, come back and tell us what their response was.

Deep_In_Debt

Yep, make sure you get the offer in writing before offering any money. National Debtline website has a good template letter you can use. Just amend to your circumstances.

As others have said, start low 20% or so and leave room for negotiation.

Good luck!

custard_cream_3

Thanks all. It's a bit tricky on two counts.

Firstly, if we dont make them a reasonable offer, they'll sell the debt on and mark my wife's credit score accordingly. Its probably worth us trying to keep that intact.

Secondly, the offer from Egg expired at midnight, and with no one at HSBC to negotiate with over the weekend, we had to make a judgement. We therefore transferred £4000, but it won't reach there for 7 working days, so that gives us a window in which to talk to HSBC.

I thought we could go much lower too, but well....time is of the essence. At least based on what everyone's said, we've got a good chance of getting £4000 accepted.