HELP....Full and final Vs Partial settlement

jamesadam1

Hi All,

First post, so apologies for any mistakes.
I am trying to settle some outstanding loans with creditors by offering full and final settlement figures to them. I have 10 creditors at £63k worth of debt. I have paid 6 creditors off response to negotiations and letters stating full and final settlement and I must say this has been a relief and very satisfying.
However I am having problems with Capital One to whom I owe £8300. They have offered me a settlement of £4150, but say it is partial and the balance will remain on my credit history even though they will not come after me for the money.
Can someone please explain this to me....and should I take the offer?
Any help is most welcome.
Thanks
JA

Goodtimesahead

F&F Offer in exchange for Default Removal

Quote:
Dear Sirs,

Account No: XXXXXXXX

I write with reference to previous communication regarding an outstanding balance on the above mentioned account and wish to make an offer to resolve that will suitably please both parties.

I do have an outstanding balance on the account, as you are fully aware this is made up primarily of charges. However, a default to you and no payment will not achieve much and so I therefore write to try and resolve matters amicably, that will suit both of us long term. I propose to offer a full and final payment to settle and close this account to the value of 50% of the original amount, which will take into account and absorb, a lot of the charges that have been added to the account throughout time.

The alternative is for me to place the account formally into dispute and demand s.10 CCA (1974) is brought into play (cease & desist) whilst I reclaim all unlawful charges combined with all costs. I shall then look at the legality of the assignment of debt; the issuance of a default notice and the agreement (prescribed terms) and between them, i'll probably be able to counter sue and litigate over unenforceability.

To summarise, I am more than happy to settle as much as 50% of the total amount owing so long as you can agree to, and ensure that, the following actions will be carried out;

• The Default Notice will be removed
• The Status of the account will change from “Defaulted” to “Settled”
• The Current Balance will appear as £0.00
• The Default / Delinquent Balance will be set to £0.00
• There will be no date in the “Defaulted Date” field (as it will be removed)
• There will be no date in the “Date Last Delinquent” field on the report
• This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax & Call Credit

If you're happy with my proposal, please respond confirming each of the above points on official letterheaded paper, confirming the exact amount owing and I will send a cheque by return. Failure to agree will result in more formal papers being sent, by return.

I look forward to your response.

Yours faithfully




Sign digitally

Goodtimesahead

Do not settle on their terms, if you want to agree 50% reduction which is pretty excessive if you ask me, I would go for no more than 20-25% max, then make it quite clear that you will only agree to the terms as in the above letter example.

Many make the mistake of making F&F settlements but forget to agree terms as in the above letter, once you have done the deal you can never get them to change onerous data on your credit file and it will stay on for 6 years! You might accept that if you are only settling for say 10-20% ! But hey for 50% you name the terms!

homeworkgirl

I have a very similar problem and have a post on here somewhere re a 50% settlement offer on an old bank o/d with Abbey, now Santander. If I settle at their 50% reduction offer they say they won't ever chase me for the other 50% but that my credit file will only be marked as "partial settlement" and I'm wondering whether or not it will be worth me struggling to scrape up the money if my credit file is still going to look bad anyway, though I know it will probably look better than showing as a default like it does at present. I really don't know what to do as another creditor with a higher balance has offered me 40% in full and final settlement and has said they will mark my credit file as paid off. This is a larger sum I would have to pay though and not sure I can afford it yet.

Poosmate

From what I've read on here it seems that whilst you are dealing with the original creditor 50% of the balance is possibly a bit low as a full and final settlement. Congratulations if you've settled the others at this rate with the original creditors - kudos to you!

It would appear that if the debt has been sold on to a DCA you will be able to offer a lower percentage of the original outstanding debt as the DCA's buy the debt at a much reduced rate. They may purchase a £6k debt for only £2k so if you offered them £3k to settle, they'd probably wet themselves with excitement!

When making Full and Final settlements ALWAYS make sure you get IN WRITING on letterheaded paper that the figure is FULL AND FINAL. If you settle on PARTIAL because they promise they won't chase the rest of the debt, be prepared for a DCA to chase you because the original creditor will sell the remainder on to a DCA hence they will keep their promise but you will still be harrassed!

Hope that helps.

Poo

GeorgeUK

Homeworkgirl, did the letter the DCA sent you with the offer say they would remove the default?

If not, making a F&F offer will not get the default removed and that will remain on your file. If it was the DCA that put the default on your file, you could try to negotiate that they also remove the default, but if it was put on by someone else then they cannot remove it. Be careful if this is what is making you think about paying it.

homeworkgirl

GeorgeUK wrote: »

Homeworkgirl, did the letter the DCA sent you with the offer say they would remove the default?

If not, making a F&F offer will not get the default removed and that will remain on your file. If it was the DCA that put the default on your file, you could try to negotiate that they also remove the default, but if it was put on by someone else then they cannot remove it. Be careful if this is what is making you think about paying it.

Thank you all for your comments.

The DCA (1st Credit) did not put in writing that they would get the default removed, they just told me when I phoned them that the status would change from "default" to "partial settlement" but that Santander would not ever mark it as "satisifed" and that is what puts me off as I feel that I could really struggle to raise the funds but would still not be much better off regarding my credit status which I want to mend.

GeorgeUK

When you stop making payments to an account, the account defaults and this is shown on your credit file. A creditor can then add a default to your file which remains there for 6 years. This gives them the option to take court action should they feel the need.

When you make a settlement, the credit file can be marked as partially settled or settled with a F&F offer. This does not mean you have agreed to a partial settlement, only that it will be shown on your credit file as a partial. The difference between agreeing with the creditor a Partial settlement or full and final settlement is that they may pursue you for the remainder if you agree to a partial settlement.

What goes on your credit file after wards is not really much of an issue as long as they state you will not be liable for the remainder of the debt.

If they have put an actual default on your file though, that is a much bigger issue as it will impact your credit rating until it falls off after 6 years from the date of the original default (when you stopped payments).

You need to check your credit file to see if there is a default marked against the debt and if it is, a settlement won't get rid of it unless they agreed in writing to remove it as part of the settlement (they do have the power to dothis even though they say they don't).

Doubtful_Guest

I hope it's ok to resurrect this thread but I thought it might be best to tag my question on, rather than starting a new thread.

Most of our debt is in the form of student overdrafts but there is also a RBS credit card debt. It was passed to Westcot and they agreed to reduced payments which I have been making for 18 months. I've recently checked my credit report for the first time and found that it was listed as defaulted. I don't remember receiving a Default Notice but it's possible. I've been really upset about this default because I honestly thought that by making these payments every month, I was doing my best and being responsible.

Anyway, I contacted the DCA to check what the current balance was (£1150) and expected end date (2017) and while on the phone, they offered me a reduced settlement figure of £850. However, this would be marked as a partial settlement and the default notice would remain.

I feel strongly that I want to pay off the debt in full. I want to demonstrate that I'm financially responsible now. Potentially, if we were to borrow some money from a family member and use our little emergency fund, we could pay off the balance in full. Do you think there is any chance that they would agree to remove the default notice as a gesture of goodwill in return for a paying off the full balance now ? At the moment they are getting £15 per month with 6 years to run.

Any advice on how likely this is ? Is there a template letter on which I could base this offer ? Should it be directed to RBS or to Westcot ?

Thanks

fatbelly

I can't see any chance of getting the default removed - that's a matter of record - it should have been defaulted by RBS before it went to Wescot. However, there is a standard letter above so you could give it a try I suppose.

If you want to try a Full & Final Settlement offer, £850 was just their opening offer. I'm sure they'd go a lot lower.

Factsheet | Full & Final Settlement offers

Doubtful_Guest

Well, my understanding was that a default notice on a credit report is sometimes removed, if the debt is later repaid. If I accept their offer then they get £850. The alternative for them is to receive the full amount and remove the default. It just depends whether they feel that 'punishing me' by leaving it on is worth £300 to them.