'settled' debt being chased - where do I stand?

krakan

OK, this is pretty brief because it's all happened rather quickly so far.. I'll explain in chronological order.

Years ago (2001 or so) I got a Royal Bank of Scotland Student account (with overdraft) and Credit Card. Bad things happened, some of them my fault, most of them theirs (That's my side, at least.) I ceased communicating with them in about 2003 after they stopped seeming to have even read what I sent them.

Recently, the barrage of letter from debt collectors increased a bit, and as I'm now on the road to recovery I thought it time to try and settle my debt with RBS. I had saved a bit of money towards a holiday at the end of the year, but I decided I'd rather ge this out of the way and save what I can later.

I wrote to Heatons LLP (Who had most recently been bothering me) and offered to pay £500 in full and final settlement. to quote from my letter:

"I would be prepared to offer an ex-gratia payment of £500... ...in Full and Final Settlement on the understanding that the account is marked as settled in full and any credit agencies are informed of this agreement."

I received, quite quickly, a reply from Heatons which said:

"After referring this matter to out clients, we advise that they are NOT willing to accept your proposal of £500.00, in full and final settlement of your liability. They are however, prepared to accept £707.93 in full and final settlement of the above account.

This settlement figure has only been offered on the condition that full payment is received by the 27th April 2006. You should note that failure to maintain this agreement will result in the balance reverting to £1,415.85"

That sounded acceptable to me, and as I wanted the debt from off my back I sent a cheque right away (Special Delivery) to the address on the letter. It was signed by a D Hall on the 26th April. The cheque was banked and it cleared my account on the 2nd May (after the Bank Holiday weekend).

Along with my cheque was a letter containing the following passage:

"I am pleased to enclose a cheque for the sum of £707.93 as payment which we have agreed will constitute Full and Final Settlement of the account referenced. Acceptance of this cheque must therefore constitute your agreement that the account is settled in full and that all records held with Credit Agencies will be updated to reflect this fact."

Now I'm neither an accountant now a lawyer, but I thought it pretty clear that an agreement was made that I would be released of my liability for the debt in question provided I paid £707.93 before April 27th. Which I did, and have proof of in the form of POD and a banked cheque.

Got a letter the other day from Heatons LLP:

"We write to you following receipt of your recent payment, which has now been credited to your account.
It does not appear that a repayment plan has been agreed with you neither have you made any proposals with regard to clearing this debt.
Under the circumstances we would ask you to telephone this office on FREEPHONE 0800 7310897, in order to discuss the matter and reach a satisfactory arrangement.
If you do not make contact as requested within the next 7 days FURTHER ACTION will be taken to recover the remaining balance."

Now really, what? Are they playing stupid in the hope I'll send them another cheque, despite knowing we agreed to settle it? Or did I miss something in my letter than allowed them to take the money and run?

Has anyone on here had any similar experience with Heatons? Looking for any relevant advice really, especially if anyone else has settled a debt and had a trying-their-luck followup letter from Heatons - or, worse, if I've made a classic mistake!

Any help most gratefully appreciated!

Chris

millsee

Of course they are trying it on. Send them a letter with details as above (but in one paragraph and no more than 5 or 6 lines) with copies of previous correspondence.

End the letter with something along the lines of:

"I now consider this matter closed. Please update your records accordingly. Any further correspondence on this issue will be considered by me to be harrassment. You should be aware that is a criminal offence under Section 2 of The Protection from Harassment Act 1997 and punishment on conviction, is six months' imprisonment and/or a level 5 fine (up to £5,000)."

Should do the trick.

Tootsie_Roll

I would certainly try the approach suggested by Millsee and I would also phone them up and ask them what the hell they think they're playing at !

Unfortunately though it is not that straight forward. I do not know the exact legal technicalities but unless the payment was made through a third party they can take the payment and still chase for the remaining balance. I would guess that they have sent the letter in error as I really can't believe they would do this so first call them and play hell.

Pigeongirl

Tootsie_Roll wrote:

I do not know the exact legal technicalities but unless the payment was made through a third party they can take the payment and still chase for the remaining balance.

Sorry to be thick but how can you pay through a third party? Do you mean like through a debt management company? Just interested.

Apple_2

Doesn't have to be a debt management company, it can be anyone, just so long as it's not the debtor.

I'm no expert. It's something to do with contractual liability. The third party has no contractual liability with the creditor. So 'their' payment is outside the contract. Whereas the debtor is 'bound' by the original contract and his/her !!!!!! is not offering anything new - the debt contractually exists.

All I know is all the debt help agencies recommend !!!!!!'s be made by a third party to avoid this situation arising. Apparently some people do still get chased by DCA's for the balance. It's unethical but .... since when have DCA's been ethical ?

Krakan - Best of Luck. It probably is just a mistake on their part.

Broken_hearted

IF you have it in writing and can prove they had it by the due date, then its tough.

krakan

Brill, that's exactly what I'd wanted to hear..

Thanks a million guys, always reassuring to know there's someone on here who knows the answers:)

One quick question for anyone still reading - This settlement through a third part idea sounds like a good one - could you explain how to do this in a watertight fashion? Would it be sufficient for a friend to make an ex-gratia payment in settlement of the debt?