Negotiating down debts - Help! (SOA Included)

Anon1983

Good Afternoon All

It's a Sunday afternoon so thought It would be a good time to come up with a plan of how to clear my debt in 2010. I just went through every debt collection letter and feel so much better.

I hope this community will be able to help me and of course, happy to share my learnings!

How debt has impacted my life
Well I built up all this stupid debt at University and have had some real stress and problems from debt collection firms and the impact of low credit scores! (I'm sure you know the feeling)

I have had real problems getting a debit card (credit score), the limitations of the 'basic' bank account, and renting properties (credit checks) and have always had that feeling of every penny in the bank wasn't really mine and of course, the associated guilt of being in the 'red' and never wanting to check the post!

Some Successes in 2009
Got promoted and two pay-rises
Cleared 5 grand in 2009
Quit smoking (12 months)
Approached Natwest for a Savings Account
TIP: I don't know If this will work for everyone - I was accepted for an Advantage Gold Current Account. This is a 'added benefits' account from Natwest that costs about £12 a month. Natwest needed me to have a Current Account to accept me for the Advantage Reserve Savings account. I was never accepted for a debit card at Nationwide and this went through. It made life much easier!

First of all a quick run down of my Statement of Affairs

Net Income £1,847.80 (after Student Loan)
Rent £500.00 (Including bills)
Train £130 (Monthly Ticket)
Health Insurance £77 (BUPA)
Broadband £15
Mobile £10-20 (PAYG)

Total Outgoing £742 (Excluding entertainment and food)

Total Debt £ 6,908.24

Creditor Debt Agency

Egg Plc CSL 2,027.97
HFC 1st Credit 788.98
O2 Moorcroft 330.50
Burton GE Money 264.31
Barclaycard HFO Services 211.48
Halifax Halifax Recoveries 3,285.00

I was just offered to clear a debt at 40% of the amount owed - I took it
(I heard most debt agencies buy a debt at 10%-20% from the original creditor).

I need your help!

Has anyone successfully negotiated all their debts down?
How would you approach negotiating the debts down?
If I have a CCJ how do I find it and clear the record?

Tixy

Hi and welcome

If you are paying any debts off at a reduced price it is vital you get in writing from them that they payment is in full & final settlement and neither they nor anyone else will chase you further for this debt.

For that reason F&F offers should always been sent to the creditor in writing - this link contains the relevant info and a template letter to use -
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

I would also suggest you do a full budget (including entertainment, food, the monthly bank fee, haircuts, presents, tv licence and everything else you need to spend on) that will show you your true monthly surplus.

Tixy

Regarding CCJs - you can get copies of your credit file from experian, equifax and callcredit (£2 each) or you can check with the registery trust online (£8 per person, per address you search).
If you have CCJs you need to pay them and then get proof they are paid so they can be marked as settled (unless you want to challenge the CCJ)

Anon1983

Thanks for the link! Exactly what I was looking for. I have some additional questions, so I hope you could clarify. It would really assist with my goal of being debt free this year. I have just got engaged and I want my income going towards a deposit or a honeymoon not towards debt collectors!

•What is the success rate (from your experience) of a debt collection agency accepting a F&F offer
•What percentage should I approach for?
•Will a debt collection agency accept a F&F offer in installments? (I would expect not)
•My approach would be save until I have say 40% of the debt and then make an offer in writing.
•Is email as good as a written letter?
•In a previous F&F settlement I agreed with the young guy on the phone a letter would be sent to my address confirming the payment in full and amendment to my credit record for payment of this debt. What's the chances I've been stuffed by doing it on the phone?
•I have an offer from a April 2009 letter for 60% of the Halifax debt, from a debt collection agency using Halifax header (doesn't look legit anyway) I am unsure of which debt collection agency it is. There is no return address on the letter. How would you approach this?

I could probably get around £700 on debts a month - this would take 10 months to clear my debts. If I can be smart and approach this with F&F offers It would be a massive incentive to approach this fast.

Tixy

Anon1983 wrote: »

Thanks for the link! Exactly what I was looking for. I have some additional questions, so I hope you could clarify. It would really assist with my goal of being debt free this year. I have just got engaged and I want my income going towards a deposit or a honeymoon not towards debt collectors!

•What is the success rate (from your experience) of a debt collection agency accepting a F&F offer if its with an external DCA (not the original creditors in house firm) then most will accept F&Fs, some quite easily, some after a bit of negotiation.
•What percentage should I approach for? really hard to say, on defaulted old debts that are not with an external DCA then many say start at 25% and be prepared to negotiate up to 50%.
•Will a debt collection agency accept a F&F offer in installments? (I would expect not) pretty unlikely
•My approach would be save until I have say 40% of the debt and then make an offer in writing.
•Is email as good as a written letter? some send emails, I think that a proper written letter is more likely to reach the right person at the firm (the one who has the authority to accept your offer)
•In a previous F&F settlement I agreed with the young guy on the phone a letter would be sent to my address confirming the payment in full and amendment to my credit record for payment of this debt. What's the chances I've been stuffed by doing it on the phone? its not an advisable way to do it. I would chase for the letter if it does not arrive soon - you are more likely to be able to get them to send it now rather than have another DCA chase you in 5years time for the balance (when they will deny all knowledge of your F&F)
•I have an offer from a April 2009 letter for 60% of the Halifax debt, from a debt collection agency using Halifax header (doesn't look legit anyway) I am unsure of which debt collection agency it is. There is no return address on the letter. How would you approach this? halifax's in house dca's are blair oliver scott - does it say this anywhere?

I could probably get around £700 on debts a month - this would take 10 months to clear my debts. If I can be smart and approach this with F&F offers It would be a massive incentive to approach this fast.

Good luck with it all. Some creditors may come back with a counter offer a bit higher, depending on how hardball you want to play it then you can either stick to your guns or increase your offer a little.

One other thing - the national debtline template is good but I would also add in a paragraph giving them a deadline by which to accept your offer (2weeks or so from when you write), otherwise they can mess you around for ages and you don't know where you are.

Good luck