Overdraft Full & Final settlement?

liberty_lily

Hi everyone,

I have an overdraft balance of around £4000 on a LTSB current account which is no longer in use. This balance is entirely made up of charges, but having unsuccessfully attempted to reclaim these charges (via a court claim which I have now discontinued) I would like to utilise a lump sum I am expecting in the next few months to make a Full & Final settlement to clear this debt.

I was wondering whether anyone could advise what the likelihood of success would be please? Previously LTSB have offered a reduction of 40% on a loan balance (with an enforceable CCA) therefore accepting a settlement of 60%. However I have no idea whether they would be likely to accept anything lower than the full balance on an overdraft. Utilising the lump sum I could only afford to pay a maximum of 60% in F&F and I would very much appreciate thoughts on this please..........

Many thanks,

liberty_lily xxx

azkaban420

Hi liberty_lily, I'm not really sure what happens with them accepting a lower F&F figure on bank charges, but I guess you can ask the question, or at least get them to freeze any further interest and charges.

I hope someone else can help a bit further with this for you...

Az

Lyndzzz

hi lilly,
Im having the same problem with lloyds. They accepted a F&F settlement on a loan i had with them accepted £1600 on a loan of £2450, but i have an od on my (now unused) current account. this is only for £1280 but is mostly made up of unfair charges so i am reluctant to pay all this. i have made many offers which so far they have refused, my last one was for £700 i think (dont have figures to hand as im in work)
thing is £700 was the most i could offer as i had other creditors who were accepting settlement figures.
So for the last two months i have paid nothing off the od. I could probably afford to pay a little off each month (only a little mind!) but i dont want this to jepodise (sp) them accepting my offers of settlement.:(

Sorry if this is not much help to you but wanted to give you my position
Let us know if you get your settlement!
Lyndzzz

DarkConvict

If the overdrafts are not defaulted, they will generally want 90%+ as a rule of thumb.
Regards of what the final balance is made of charges/interest etc, you ran up the OD balance in agreement with the terms and conditions detailing the charges. As far as the bank is concerned you used the OD and incurred the agreed charges by doing so, High Courts agreed with the charges so the banks sees it as you owe them the money.
They can demand an OD be repaid in full given 30 days notice, fail to do so and it defaults (current account closed) debt passed to collections, at this point an F&F offer of 70% may work. If it goes to a DCA then maybe 50%. But they can always refuse and get a CCJ against the debt.

liberty_lily

Thanks for the replies - its good to know I'm not the only one in this situation!

Az - they have already frozen interest etc as they closed the account after I put in my claim for charges to be refunded. I'm going to give the F&F a try and will let you know how I get on.

Lyndzzz - sorry to hear you are also having problems with Lloyds - they are notoriously difficult to deal with and point blank refused to deal with my claim when we were going through a period of financial hardship. I would also rather clear the debt than offer tiny monthly payments that would take forever to repay. I hope you have success soon!

DarkConvict - as I say the account is already closed and has been in default for some months whilst I have been attempting to reclaim the charges. It has been with three different DCAs now, so I'm hoping to get them to agree a reasonable settlement. If I could I would pay the full balance - as much as it sticks in my throat to do so when the balance is made up totally of charges - and I don't want to risk getting a CCJ, but I'm not going to be able to pay the full amount as we do have a couple of other creditors who will also require paying from the lump sum.

As it is with a DCA would you recommend I go in at a lower figure than I can afford and leave room for negotiation?

Thanks again for the support and advice - I'll keep you posted as to how I get on.

liberty_lily xxx

liberty_lily

Hi everyone,

Just bumping this in the hope of some further advice please...........

The overdraft is now with the fourth DCA and I am very much wanting to offer a F&F to get shot of this one.

To reiterate - the account was closed by the bank, there is an outstanding o/d balance of around £4000, which is comprised entirely of bank charges and for the last year it has been passed from one DCA to another. Due to a severe drop in income I was unable to make any payments into the account, but I am now in a position to offer a low sum in full and final settlement.

Can anyone please advise on how to best negotiate a F&F in such a case?

Many thanks,

Liberty_lily x

liberty_lily

Just a quick update - after less than 2 weeks the latest DCA collecting on this overdraft balance has given up and informed me in writing they have returned the account to the bank.

I think I will now take the opportunity to write offering them either a low F&F or else £5 per month which is all I can afford at present - at that rate it will take quite a while to pay off £4000!

I just read on another thread that this is a rough guide to what you can expect to pay in F&F -

Account still with OC, no default - 90% or more
Account still with OC, with default - 75% or more
Account with in house collections of OC - 60% or more
Account with external collection agent but still owned by OC - 40% or more
Account purchased by external collection agent - 25% or more

As this has been passed to four external DCAs but is still owned by the OC, although currently between DCAs, I am hopeful of achieving somewhere around 40% - is it recommended that you should start lower and work your way up?

Many thanks,

Liberty_lily x

Pott5y

Liberty Lil

Oh yes always start low and then be patient, they will probably refuse initially, and over time increase your offer slowly. You will be best saying the money for your F&F is coming from family and make sure you get any acceptence letter in writing. Great template here:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Any offer must include:
The settlement is full and final
You are released from all liability for the outstanding monies
Lloyds nor any other company will pursue you further for the oustanding amount
They will mark a credit reference file as satisfied in full.

If you are unsure of any wording post the letter here and some lovely person(s) will advise as necessary.

Good luck

liberty_lily

Hi Pott5y,

Thanks for your advice - I'll do as you suggest and let you know how I get on!

Liberty_lily x