Credit Card Settlements

lukejewe

Hi,

New to this and will no doubt be wading through the various threads over time, the majority of which are extremely helpful.

At present I'm trying to sort out a few issues I have, and suppose I want to throw a few questions to anybody who will listen!

Has anybody had success in offering Credit Card companies lower settlement figures than your outstanding balance?

I don't suppose that this is within the Companies interests, but say if the individual had accrued such a debt and was unable to make regular payments would they be tempted to settle for a lesser figure?

natty16

since July last year i have been experiencing money difficulties due to OH losing his job. i wrote to all of my creditors and have been making token payments of £10ish a month to them. MBNA have recently written to me offering me the chance to pay £850 on a debt of £2,300 which will then close my account with them. have not taken them up on this as i have not got £850 but think it is a fair offer that they have made.

thriftymomma

I presume this is after being passed to a Debt collection agencey. Why else would CC companies want to wipe off money you owe them>?

never-in-doubt

Also bear in mind that agreements are classed as settlements thus meaning your credit file will show 'settlement' showing lenders you never paid the full balance. Only way i'd agree is if they put in writing they will remove the whole account and all traces from all 3 CRA's - then get a loan and bite their hands off at the 30% of debt offered!

natty16

thriftymomma wrote: »

I presume this is after being passed to a Debt collection agencey. Why else would CC companies want to wipe off money you owe them>?

not got as far as Debt collection agencies. I told them i was in financial difficulties, offered token payment of £10 per month, made a claim and received refund of previous charges for late payments etc. Spoke to someone a couple of months ago who, after going through my incomings and outgoings, actually reduced my token payment to £8 per month and then i have started receiving letters offering me reduced final figure. If i am not in a position to take this offer up or to at least to pay (i think) £88 this month then my account will be sold to a DCA.

Ansu

Generally as a rule of thumb they will not accept settlements while they still administer the debt, unless it's exceptional circumstances (E.g. terminal illness with no assets/estate, financial difficulties are not considered exceptional). In the event that they do accept, it would still result in a default of the remaining balance (the shortfall) being applied to your credit file, and you would still technically owe this amount, they will just never pursue it.

Once it gets to a DCA, they will be more willing to accept a reduced settlement, although a default will have already been applied at this stage.