What's the difference between Full settlement and a short settlement?

tbathgate

Hi All,

looking for some help. I am in a DMP with Payplan with about 7 - 8 months left.

I recently contacted them asking about clearing a debt with them as it's only £43 outstanding.

They told me :
"The choice is between a full and final settlement or a short settlement, this last one will show on your credit file for 6 years as debt not fully satisfied, but if the creditor offers a good reduction you may be able to settle more with the money you have"

Now the debt in question is no longer on my credit history, the default and the account have been removed as 6 years have passed.

So does a short settlement mean that the account will be back on my credit history again?

I wasn't sure and they didn't explain it very well, or maybe didn't understand me when I asked if it would be put back on my credit history.

Does anybody know about this?

Cheers

Tom

Tixy

Hi tom

this isn't going to exactly answer your question (sorry I don't know the answer to that) but some people have managed to do a reduced settlement with their creditors but get them agree to mark it a fully satisfied. Not all lenders will go for this but its something to consider.
National debtline explains a little bit about how it affects your credit file on this factsheet http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

I would have imagined as you are making payments to this debt that the account and balance appear on your credit file but just the default has dropped off (is that not the case on yours?)

tbathgate

Tixy wrote: »

Hi tom

this isn't going to exactly answer your question (sorry I don't know the answer to that) but some people have managed to do a reduced settlement with their creditors but get them agree to mark it a fully satisfied. Not all lenders will go for this but its something to consider.
National debtline explains a little bit about how it affects your credit file on this factsheet http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

I would have imagined as you are making payments to this debt that the account and balance appear on your credit file but just the default has dropped off (is that not the case on yours?)

Hey Tixy,

Thanks for your reply, I see what you mean by reduced but marked as full.

That could work in my instance as the whole account has dropped off my credit file, not just the default.

But would that mean they could then introduce it and the default back on my credit file for 6 years.

Cheers

Tom

fermi

tbathgate wrote: »

But would that mean they could then introduce it and the default back on my credit file for 6 years.

No. They are not allowed to put it back on once dropped off.

So you don't need to bother negotiating how it is marked on your credit file.

You need in writing from the creditor that the account will be settled, and that you are no longer liable for any remainder.

tbathgate

fermi wrote: »

No. They are not allowed to put it back on once dropped off.

So you don't need to bother negotiating how it is marked on your credit file.

You need in writing from the creditor that the account will be settled, and that you are no longer liable for any remainder.

HI fermi,

That;s greaet, thanks for the answer, much appreciated.

So now i can the negotiations begin!

Cheers

Tom