Full & Final Settlements - advice needed please!

wannabedebtfree_2

Ok, with it being 2010 I need to grab the :money:bull by the horns. I have 'tried' for too long and it hasn't got any better.

I am paying out £650+ per month to CC's :eek: and each month just under £300 is coming off my balances :mad:, at this rate we will be skint for another 43 months (according to the snowball calculator) and we never have any moeny for emergencies (like car breakdowns) or even any savings for annual stuff like car tax so we're well and truly stuck in the CC spiral.

If I were to empty my kids savings (I'd be able to pay it back pretty quick if I had £650 per month left over) I could scrape together about £5k so my questions are these;

Altogether we have currently have £22k debt on cards (this makes me feel sick and want to cry) so I would be offering each creditor about 22%........are they likely to accept this??

OR as two of the CC are on good balance transfer deals I could leave those out, which would make my offers to the others 30%ish.

I have looked it up and know how to calculate each offer, I have letter templates ready but what I want to know is how realistic it is that they will accept an offer, does anyone have experience of this good or bad???

I just want these debts gone now, and then we would be able to manage brilliantly on the money we have, at the moment we are existing and not living (we couldn't even afford a bloomin Sun £9.50 holiday last year - the last family holiday we had was in 2001, we've only ever had 3!!) I just want to stop worrying about money all the time..........so please help!

p.s. this is a duplicate post from the DFW board, I need as many people to advise me as possible!

rsykes2000

They are extremely unlikely to accept full and final if you aren't in default by several months already. In that case your credit rating would be screwed anyway so it wouldn't matter, if they do accept a partial settlement as full and final, this will damage our credit history.

wannabedebtfree_2

Ok, I thought they had to mark your account as 'settled'........maybe I have misunderstood the advice on the link I found on here..........so it's back to the drawing board then, they don't make this easy do they?!?

Peeky

In short, to do a F&F Settlement you need to be in arrears. You will then default. You do a F&FS and the default is marked as satisfied. You then kiss goodbye to credit for the next 6 years.

wannabedebtfree_2

So no matter what I do now its up the spout isn't it? I might as well give up!

CLAPTON

wannabedebtfree wrote: »

So no matter what I do now its up the spout isn't it? I might as well give up!

why does it matter to you that your credit rating is trashed for 6 years?

ARTooD2

If you used the 5 grand you could scrape together to pay off some of the debt on all of the cards surely you would be saving something in interest? Or am I missing something?

wannabedebtfree_2

It doesn't - I never want credit again!!! but I wanted the debts gone this year not in four years of hardship........I just feel like giving up!

nick.evans

what ever you do don't default, i did in 2006, settled everything shortly after, debt was only just over 2k but i can't even get a mobile phone contract. Have you been to see the financial advisor at the bank?

ElkyElky

Use the kids savings. That can be paid back in the future. If you use the savings towards your debt, your monthly payments will come down, not to mention the interest too.

£22k is a lot of money. If it comes to a point where you simply cannot afford to feed yourself or your family then stop paying. It wouldn't be the most wise thing to do but you and your family comes first.. any damage to your credit file will disappear in 6 years, which isn't long really.

Once you default, you can make an agreement to pay back a few pound a month. In some cases, it is better to default rather than struggling to pay the minimum amount.


But you also need to look at how you got into this situation and what you can do to prevent it in the future.

wannabedebtfree_2

I am still looking into it, rang Nationwide as a few months back they offered me 'an arrangement to pay' at 0% for 6 months, but because I was trying to do some juggling and it was going to stuff up my credit file I told them no......rang today, the chap took me through a very very simple SOA and then told me as according to their calculations I can meet the minimum payment so I can't make any sort of arrangement......I explained that its the interest thats crippling me and that according to CCCS I should only be making debt repayments totalling £435 and he just said "Send us that info and we might be able to help"

Grrr.............I don't really care if my credit rating is stuffed for 6 years..... I will NEVER get another credit card.........I won't ever earn enough to get a mortgage big enough to buy a house round here and I use a PAYG mobile (about £30-40 per year!!).........after all of this I will never use credit again!!

We got into this situation basically because we overcommitted, I had a £5k loan years ago (to get a car and consolidate a couple of credit cards) and to get rid of it quickly I did it over a relatively short term, well stupidly this left us with no money so the credit cards started gettign used again..........and the spiral began, now we can't seem to get out of it.

I am going to use the kids savings (I really didn't want to as that was supposed to be for Uni/first car etc, and as my son is 15 this year I will only have 3 years to build it back up and 4 years for my daughter) but I see no other option.

What makes me mad (and sob earlier) is that I am trying to do something about it and if I was defaulting right, left and centre they would help me help myself, but because we are SCRAPING by, throwing every spare penny we have at our debts they think we are able to cope..........grrrrrrrrr

Thanks so much guys, I do appreciate the help!