Offer to creditors

Benji

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RE: Above Poll

Obviously 50% is best - but will the lenders
treat me less sympathetically if I'm too greedy?
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Hi all,

I'm with a debt management company at the moment but I'm planning on leaving them iminently. I've been offered a mortgage at a very good interest rate (6 & a bit) to release some equity - but it won't be enough to clear all my debts. I have no realistic hope of clearing them in the short term and so I thought I'd write to the companies and ask if they'd accept a smaller lump-sum to clear it.

This is what I've written so far - but I'm wondering if there is a 'template' anywhere that shows what you should say?

You will be aware through correspondence with our Debt Management Company that we have had severe financial difficulties since November of last year.


We have been paying you approximately £XXX per month off a total outstanding of about £XXX.


As my wife is disabled (claiming Disability Living Allowance) and I am unable to work as (a) I am needed to care for my wife at home and (b) to do so would reduce our available income our financial situation will not improve.


By releasing equity in our property we have £XXX available and would like to offer this to yourselves in full and final payment of the account. I do appreciate that it is considerably less than the amount outstanding, but with no equity remaining in our property it is considerably more than either an IVA or bankruptcy would generate for you.

Obviously, the amounts would vary depending on the lender etc. If anyone has any ideas as to what I could add / should remove to make them more likely to say yes then I'd be very grateful.

Broken_hearted

Always offer the lowest first and let them come down. So if its £1000 offer £500. They say no, you ask them what they will accept. They say £800 you plead poverty and get them to accept £600.
Well thats how I did it anyway.

Benji

Sorta what I had in mind - would you mind telling me what %age you ended up paying (just an approx average)?

Thanx

Broken_hearted

57% strangly enough.

Me_Myself_2

Offer a lot less that 1/2 at first.

amosworks

I'd start with 1/4, then 1/3 before offering 1/2
But don't do it in such a methodical way because they might think if they refuse half then the next offer might be 2/3 or 3/4 etc

roswell

end of the day if you spent it you should be pre paired to pay it all back but why make them an offer why not just ask them what they are willing to accept

Benji

roswell wrote:

end of the day if you spent it you should be prepared to pay it all back but why make them an offer why not just ask them what they are willing to accept

I totally understand your viewpoint, but I can't raise enough to sort them all out in full. If I just ask 'how much' then I expect they're going to be saying 95% or more. If I carry on how I'm doing now then the banks will end up giving me (literally) ten years interest free - so it might be cheaper for the banks to allow me a discount to clear it now rather than give up 10 years interest (at 16% pa compounded that's probably around 200%).

Take Care - Benji