Negotiating a settlement with cash

Saff

Hi all,

Re. trying to come to a cash settlement, and the effect on your credit rating.

I'm with Lloyds. After the landmark case, I sent off a letter in line with MSE's latest guidelines, pleading hardship etc.

The long and short of it is that they have rejected my claim for £3000. My overdraft stands at £3000 and I am now using a different bank as my current account. Lloyds have frozen interest on the overdraft and set up a payment plan of £30 per month, which will take me around 8 years to pay off.

A family member has offered to pay £1500 to Lloyds, if they agree to settle for this sum. I haven't presented this offer to Lloyds yet... I've heard that a settlement of this type will stay on my credit file for 6 years as some kind of 'written off' debt - apologies, I don't know the exact term.

Does anyone have any advice as to how best to approach this? I feel a little bitter about staining my credit file for a further 6 years AND giving them my relative's hard earned cash when I could just as well pay £30 per month for 8 years and refuse my kind benefactors offer.

What do we think, is it actually possible to forego the credit staining part? What would a reasonable settlement figure be given the figures I've stated? Should I send a template letter to Lloyds (my first one wasn't a template) citing paragraphs from the Consumer Credit Act etc. and continue down the ombudsman route? When is the best time to throw this settlement figure on the table?

So far as I can see nobody has had any joy from Lloyds (since the bailout anyway), I'm so glad I switched to Natwest - a much friendlier bank.

Thanks and I'll be back with news as this progresses. I hope this adds another dimension to the discussion.

All the best people!

natweststaffmember

Well, are you looking to settle it or are you looking at reclaiming?

Saff

Well, I guess I'm not particularly convinced that the reclaiming route is going to work for me because I'm on cheap a repayment plan organised by the collections dept, with interest frozen (ie the charges are no longer materially affecting my hardship).

I'm really trying to establish whether a settlement can be carried out, without tarnishing my credit file for 6 years?

I spoke to a very helpful lady at the collections department yesterday, who advised that her department will be bringing in a process for the settlement of these charges (unsure whether it has to be cash, or if they will settle and still offer payment plans - so that you stop protesting). This process is 2-3 months away according to her, but she advised that the settlement would stay on your credit file for 6 years.

What do you think Natweststaffmember? Can I offer them some cash, expediency in settling this all is key for me too as I'd like to repair my credit rating asap, so that I can move out of lodgings and into a flat (which requires a credit reference check) in (hopefully) under a year.

Thanks for replying to my post by the way.

ILW

Generally, if they agree to a settlement which is less than you owe, it will need to go on your credit file as it is a matter of fact. You may also wish to consider that the existing payment arrangement will more than likely affect your credit worthyness as well.