Percentageage of balance as settlement?

mm2000

Can I ask what pecentage of a balance is a fair offer as settlement and what experience have people had of paying settlements

nomoneytoday

Depends on the borrower, how much, how long etc...

sallyjo_2

Hi,

I recently offered a lump sum to a company who bought a credit card debt from an infamous American credit card company. All I had available was a sum about 20% of what they said I owed them. They countered and offered 70% off. I countered and offered 22% but they did not sweeten their deal and I do not have the 8% difference, blood from stone problem. That'll teach them. So I turned them down and have offered it to debtor no 2 - a 50% reduction. We'll see.

In a nutshell, START LOW and see what they come up with.

Other advice. Use the wording in your offer letter as per that in the National Debtlines website--its a good template. If they accept your offer -ONLY send them money if their acceptance is in writing, saying they will accept the sum as full and final settlement of your debt and that they and associate companies will not pursue the debt, then ONLY pay by cheque coming from a third party (a friend or family). You have more legal protection that way if they are unscrupulous and try to harrass you for the rest. Sadly many are.

Keep everything in writing safe for years to come, especially their full and final offer letter and proof that the sum was paid. If they try it on, and keep sending you bills, send them a letter demanding a bill or letter acknowledging that it has a zero balance, paid in full on it. Keep trying, as they may try and fob you off and chase you for the balance. Don't let them get away with that funny business if they pull it-story below.

I am trying to pay off my creditors that way, when I have lump sums available (not often!!). I have settled with one - that was at 80%, no arguments-their collections department rushed to agree the full and final offer. This was a store card from a very reputable department store and grocery chain. After I paid them though, they failed to close my account as requested, sent me bills and reminder letters when I didn't pay - for over 6 months after I sent the agreed sum to them. I wrote once, called once to the collections team, and then nothing happened until I wrote TWICE over 4 months later to their main customer services. They finally sent me a letter of apology and a bill saying I owed zero. That episode made me angry and worried but its settled now.

I am negotiating with my second now. I would never offer 80% again, too much - especially not to a company that has bought the debt.

*Louise*

I owed about 7 hundred or so to a company, and they sent us a letter stating that if we paid £352 then they would accept that as full and final payment.

I jumped at the chance, and that was one more debt cleared off.

Have never made te first contact before - but will try sallyjo's advice next time I have a few hundred spare lol

Broken_hearted

I sent a letter offering £400 for a debt of £1,145 to Mooorcroft they turned it down asking for £900. So I will wait 2 months and offer it again.

mm2000

Thanks all for your replys.
I did offer Citi cards £500 for a debt of about £4,000. I gave them a month to accept my offer, I heard nothing for about 3 months, then I received a letter to say that they would accept my offer. I wrote to them again asking for the letter of confirmation including all the details mentioned in sallyjo's post. I heard nothing for a month so I wrote again. (I don't telephone companies because I don't trust them I like everything in black and white and I'd been advised never negotiate or discuss any matters by phone) Then I receive a letter telling me they are not prepared to accept my offer as it is too low. I wrote asking for their complaints dept. details instead I get a threatening letter from their solicitor. I wrote back a letter of disgust and contacted the Financial ombudsman service. They were powerless to enforce the acceptance of my offer (apparently no court in the land would neither) but I was awarded £100 compensation for thier lack of proper communication.
I have a couple of debts below £1000 which if I can pay off by offering smaller amounts I can then use the extra cash to increase payments to other debts.
Would it be reasonable for me to offer 10% to start or is that too much of an insult. What worries me is 10% is less than a years payments so I think they may turn me down.
What sort of percentage does the debt get sold to a debt collection agency for?