Sue V MBNA Full and Final Settlement

suewiththeblues

have recieved a further letter from mbna stating that they will send DC's/CCJ etc so have sent this in response, also sent a letter regarding phone harrasement and that no home visits are allowed . thought i might as well send a CCA request, bombard them with letters as they are doing it to me

WITHOUT PREJUDICE

Thank you for your letter dated 5th February 2008 regarding the above account and the following offer that you made in it: ‘Call and discuss the possibility of settling your account with a payment of £333.64. If accepted, the account would register as a partial settlement; however we would not take any action to recover this amount’
I am willing to accept your offer of settlement for £333.64. However I require that you confirm in writing that this sum will be accepted in full and final settlement of this account. All my other creditors, as detailed in the table below have accepted full and final settlement.
This offer is made on the understanding that if accepted neither you nor any company associated with you will take any further action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability. In your letter you state that MBNA would not take any action to recover this amount, but for my purposes I require confirmation that the outstanding balance will not be pursued by any other company now or in the future.
Please can you also confirm in writing that if any offer is accepted you will mark any entry on any credit reference agency regarding this account as ‘satisfied in full’.

Payment can be made within fourteen days of receiving your written agreement to this offer.
I would like to add that if we cannot reach agreement on this, and given the length of time I have been negotiating with you, I will have no choice but to distribute the funds amongst my other creditors. I am also enclosing a letter to your company regarding harassment and requesting that all correspondence in future is conducted in writing only.

GeorgeUK

Good letter Sue.

The only part i'm not sure about is that they will agree to your credit file being marked as fully satisfied. I think you've covered everything else though.

good luck

suewiththeblues

thanks george

i am hoping at the very minimum it will give me a bit of breathing space from the threats!

fairydiamond

I don't mean any offence but why do you want them to mark your credit file as satisfied in full, when you are not paying everything you owe?

fermi

It is OK for them to mark the account as "partially settled" on your credit reference files as long as you also have it confirmed that your liability for the outstanding balance is ended.

If it is marked as "partially settled" that is OK, providing that there is no outstanding balance listed against the account.

The Information Commissioner issued some guidance a while ago on how to mark the F&F settlement of defaulted accounts:

Link: Technical Guidance Note - Filing defaults with credit reference agencies

Where there is a default but a lender has formally accepted in full and final settlement a smaller amount than was owed under the terms of the original agreement, then it would be unfair to process personal data to record an outstanding balance on a default when the matter had been formally and finally concluded.

There are other circumstances where the terms ‘satisfied’ or ‘settled’ are not appropriate because they do not adequately reflect the fact that lenders have been left with no choice but to accept significantly less than they were owed under the terms of the original agreement.

Examples include the following:

• Where an IVA, which included the lender, has been successfully completed even if the lender did not recover all the money owed under the terms of the original agreement.
• Where a lender has received all the money owed under the terms of a bankruptcy order which has been discharged, even though the amount received falls short of the amount owed under the original agreement and, in some cases, may not have received any payment at all.
• Where a secured asset has been possessed and the lender is no longer chasing payment of any outstanding debt.
• Where the lender has accepted as part of a negotiated settlement a payment that is less than the outstanding amount and the customer has agreed as part of the settlement how their credit record will be affected.

In the first two examples above, borrowers are under no legal obligation to pay any more money. In the last two examples the lender who is responsible for the record has decided it is not worth chasing further payment. In these circumstances, we understand a lender may be reluctant to mark the entry as ‘satisfied’ or ‘settled’. However the entry must record the position adequately, for example, by showing that no further monies are expected and the account was partially paid.

I also checked this with National Debtline a while back because they don't say that "partial" is OK in this:

Link: Factsheet | Full & Final Settlement offers

This is the response I got.

Thank you for your email.

We note that you require clarification regarding full and final settlement offers because the information on our fact sheet and the Information Commissioner’s website seem to differ.

You are correct in thinking that it is important for you to have confirmation from the creditor that your offer is accepted as full and final settlement. You must also ensure that you keep this confirmation for at least 6.5 years incase the debt is passed onto another debt collection agency in error. If the creditor does not issue and serve court proceedings during this time the debt becomes ‘statute barred’ and you would have grounds to defend the action. We have attached a fact sheet regarding the Limitation Act which explains more.

If the creditor will agree to mark the credit file as satisfied this would be an excellent result for you as it would look better on your credit file. However, your credit file should show an accurate credit history and to mark a debt as ‘satisfied’ when it has only been partially satisfied could be deemed to be misleading. Therefore the creditors are well within their rights to mark your credit reference file partially settled/satisfied.

If a change in circumstances led to your inability to settle the debts in full you can add a notice of correction to your file to explain this to future creditors so that they will take this information into account when considering you application for credit. Please read the attached fact sheet about credit reference agencies for further information.

If you are in doubt, the give them a call.

........

suewiththeblues

hi
thanks for that useful info. i actually thought the credit file had to say satisfied in full, must have read that on another post somewhere when i started this journey, they can write back and correct me on this though. i never imagined all this would take so long when i started :rolleyes:

fermi

I think the issues of (a) getting agreement that the debt is fully settled as far as future liability goes and (b) how your credit reference file can be marked, get a bit mixed up sometimes.

If in doubt give somewhere like National Debtline a call and run the wording of any offer past them.

suewiththeblues

to be honest my goal is A, my credit file is already a mess with a few defaults from my DMP though m next stop would be to fix my credit rating

suewiththeblues

my letter about harassment must have worked as they have stopped phoning!

however 11th march i received a DEFAULT NOTICE (now im worried!) stating that i must take action by 28th march or they will commence court proceedings (will they really? or is this jus scare tactics again?

then

today i receive an Account Closure letter saying my account has now been sold to a thrid party who will contact me and mbna are no longer dealing with it and says the default amount is £953

FEw questions:

Who do MBNA use to collect the debts as i will need to read up on what to expect next and whether they will accept full and final

does this mean i now have a default on my credit file for mbna

should i just phone them to accept the partial settlement, if they mark the balance owing as 0.00 ?

fatbelly

Sue

I think you will find that the rights and duties relating to this account have been sold (assigned) to another company. I am not aware that MBNA sell to any one company so it could be anyone (the highest bidder?). You will have to wait and see who it is.

Actually, shouldn't MBNA name the company?

The opportunity to accept their 35% offer with MBNA seems to have passed and you will have to re-start negotiations with the new owner, who will probably have bought the debt at less than 35% but may not be willing to settle at that level.