Fully settled vs Partially settled

lordash

Hi,

I have a question. I phoned today to see if Moorcroft would take a reduced settlement on my defaulted overdraft of £550. They said they could meet me half way and take £275, but then they would have to mark my file as 'Partially settled'.

My question is, is there any advantage to having fully settled over partially settled (or in other words, is it worth another £275 to have fully settled on my file). I heard that it looks unfavourable to lenders, but I also heard that there is very little difference between unsettled and settled defaults, and I can't see that a partially settled default would look any worse than an unsettled default.

Also, my credit report is in terrible condition anyway with 5 defaults (2 satisfied, 2 unsatisfied and this) and loads of missed payment markers running up to this month (now that I am finally in a financial position to clear my arrears). Also all my defaults are clustered around the same time period (late 08/early 09). This one is my youngest default (June 09) so all my 'adverse' is going to drop off at roughly the same point.

So is it a good idea to take the offer?

DGJsaver

basically partialy settled means you can get chased down in the future for the balance , if they wont offer anything other than partial settled then i would be tempted to continue paying a little bit monthly

Tixy

With partially settled sometimes the remainder of the balance is sold on to another DCA who then chase you for the remainder. You need to get them to agree in writing before you pay that neither they nor anyone else will chase you for the remainder of the balance (this is I think more important than what it actually says on your credit file - particulary an already damaged credit file).

lordash

Thanks for the replies everyone.

I said to the lady that I would only make the payment after I receive a letter saying that the payment would be in "full and final settlement". If that is not what it says on the letter then I would not send any payment to them. This should mean that it would be unlawful for them to pursue the debt further. She was quite insistent about the 'partially settled' status bit though.

This was more a query about the pros and cons of having the "partially settled" phrase on my credit file, but thanks for the warnings. I hear that Moorcroft are quite an unscrupulous company, so I would not put it past them to try something along these lines.

GeorgeUK

Having a default settled or partially settled is not going to increase your credit rating by much but it will be better than having an outstanding default.

In your letter, it may be worth stating that you are aware that your credit file will show the debt as partially settled, but the payment of the debt is a full and final settlement where you will not be liable for any remainder (and use the nationaldebtline paragraph for this).

They will probably also try to trip you with the payment date - some require payment to clear with them within 4 days - how long does it take them to pay in cheques and how ong to clear through the banking system. Just something else to bear in mind.