How much to pay off loan?

Firefly

Eight years ago my ex left suddenly never to be seen again. :j He did leave me in a considerable financial mess but against adversity, I've managed to get by.

I've got three debts that are paid under an 'arrangement' each with a debt of around 2k. These are dealt with not by the original source but by a collection agency. I've paid my monthly payment consistently and reliably since it was made and have also increased payments too.

I've just come into some money and would like clear all my debt but don't have enough to get rid of it all, although the contribution I can make would mean the end is in sight within 12 months.

What I want to know is every year or so, the collection agencies phone me and ask if I can clear all my debt, and if I can make an 'offer'. Do you think I could offer £1.5k? I've been paying this for over seven years now and although have chipped away at it quite well, it would be a relief to see it all gone.

I would welcome advice.

lynzpower

I dont know for sure, but I would ask . shy bairns get nowt as they say oop north

southernscouser

Haggle as much as you can! You will almosty definately get some money off!

Personally I would say to them something like, "I got a unexpected bonus of £750 and I reckon I can muster up another £250 to make a grand. Will you accept that as a full and final settlement?" By starting low you won't 'overpay' so to speak. D

But before you pay get it in writing that that is the full and final amount and after that no monies will be owed to them!

Firefly

I would be very interested to hear how much others have been able to negotiate.

I wouldn't have thought of going in quite so low southernscouser, but I will bite the bullet and give it a go.

southernscouser

It depends how much you are paying them a month! If it is quite low I imagine they would be more likely to agree to a lower figure! Good luck!

lynzpower

Firefly, love your sig x

milliejon

I've received letters from the DCA for one of my debts. They ask me if I can pay off an amount, which is usually around two thirds of the total debt.

That would be my plan if I was in your position. I don't think I'd be strong enough to barter!

Firefly

milliejon wrote:

I've received letters from the DCA for one of my debts. They ask me if I can pay off an amount, which is usually around two thirds of the total debt.

quote]

Who are the DCA? Was that 2/3rds of the original debt or the amount outstanding?

Lynzpower, love yours too! x

Xbigman

There are quite a few threads about full and final settlements on this board. Have a hunt around and you will soon pick up lots of advice and details of other's experiences.

In brief the procedure is;

1. Get an up to date statement from your creditors so you know how much you owe exactly. Preferably in writing.
2. Offer a full and final settlement of 50% of the debt. They do sometimes accept offers that low but you can expect to pay 70% to 80% after haggling. Don't say where you are getting the money unless they ask, if they ask say a relative will lend it to you. Never tell them you earn more because they will just see you as someone they can hassle more.
3. Don't send anything until you have a written offer from them. Send your acceptance and cheque recorded delivery and keep the bank statement where the cheque was cashed safe.

This works best once debts have been sold on, the original creditors rarely do accept offers (so you should be ok).
Regards



X

milliejon

Firefly wrote:

Who are the DCA? Was that 2/3rds of the original debt or the amount outstanding?

DCA is the debt collection agency. 2/3rds of outstanding debt.

Xbigman - that was a really helpful post. You've made the procedure really clear.

Penny-Pincher!!

I would offer about 50% of the outstanding debt. Send a letter offereng XXX amount as a full and final offer, then they will get back to you. Start at 50% and work upwards. When I was in debt 11 years ago, 2 creditors agreed to 25% of the balance...if you dont ask you dont get.

HTH

PP
xx