full and final settlement offer

riquelme

hi ive recently offered my 4 creditors approx 1/3 (£6000) of what i owe them (circa £17000) Ive managed to get this through my OH as she has come into some money. i received the 1st reply today

Dear Mrs .....

We write with reference to your letter dated ...

The current balance is £8000 (approx) in debit, in order for this Dept to accept any offer in a discounted settlement, the Comon Financial Statement agreement will have to be broken which means that our letter of formal demand will be sent to Mr ..... , resulting in a default being placed against the account.

Before this dept gives consideration to any offer in discounted settlement, please confirm whether Mr.... agrees with the terms set out above.

If Mr.... agrees to the terms above the offer we would be willing to accept is £5370


yours sincerly

.....

Ok, some background to wanting to pay this off, me and my partner are separating, my OH is staying in the family home with the children, she is not in a position to buy me out or get a mortgage herself due to low income. I intend to support my family in the home as a decent father would. This means i would have to rent somewhere leaving me with little spare income to continue with the £300 p/m debt management plan i currently pay. This really is an offer that i need them to accept or else face much much lower contributions from me.


ok, so what should my next step be considering the letter above and considering that i had offered them £2871 out of the £8000 that i owe

i also didnt write the words 'without prejudice on the original letter that i sent, is that a bad thing?


any help plllllleeeeeaaase

InDeepDebt

I'd wait and see what the other three creditors come back with. They might accept closer to the figure that you've offered so your £6k will go further. Basically, if you pay the one that's come back what they are after, you've got just over £600 left which ain't a lot.

Does your debt management company know about the £6k? I'd be tempted to start paying the reduced payments (in agreement with the debt management company - if you're using one) and see whether the full and finals come down in, say, six months time. Are the debts with the original creditors or with DCAs? How much, as a percentage of the original balance, is the £300 a month paying? It seems to be paying almost 2% of the current balance which is quite hefty - hence the probable reason why they have offered an increased full and final.

Just my view. I'm nowhere near the stage of full and finals yet (unfortunately).


Jim

riquelme

original debt = approx £22k
current debt = £17k
been on DMP with CCCS for 18 months
after review in january i agreed to up payments to £300 from £260

ive offered all the creditors approx £6k in total, i can go up but not to nowhere near 2/3 of what i owe as what i have been asked for.

can someone explain what all that means also, sorry if i appear stupid but some of this debt language is new to me

Deep_In_Debt

Generally debts that are still with the original creditors will want 70% of the original amount. However, DCA's will generally accept a lot less as they buy the debts for pennies in the £ so you could get away with as little as 20% F&F. So it may be worth waiting for your debts to be "sold on" if they haven't been already.

National Debtline website has a good template letter you can use for this. You need to make sure that you write and say that this is in F&F, that you are released from any further liability and that neither they, nor any third party or associate will chase you for the remainder. This is important as they will probably sell the rest on in a few years and you will get chased again. That also your credit file is marked as "satisfied". As I say, pop over to the National Debtline website for a good letter.

riquelme

can someone advise me please. if none of my creditors accept then the situation i could be in is that i am still on a DMP but unable to keep up £300 payments due to renting a property and paying maintenance to my OH. My OH is staying in the house until she is in a position to take on the mortgage/ move or buy me out.

Is there anyway my creditors can force a sale on the house if the worst case scenario happens

InDeepDebt

Do another statement of affairs - either by yourself or with the help of the CCCS. Work out the new payments - put that to your creditors. They will not force you to sell your house - they may get funny but...

The CCCS always say that a DMP is flexible, now is one of those times. As you've got them helping you, pick up the phone and get them to help.

Even if you were paying a total of £170 a month, it's still 1% which seems to be a figure that most creditors are happy with.

Jim