short settlement advice - DMP with Payplan

sal22_2

Any help and advice very gratefully received!!

I have been in my DMP with Payplan for 2 and a half years now. I have paid off £6K of my debt but have about £4,500 left. I am getting married next year and i really would like to be debt free before then. My lovely other half has offered to give me the money to pay off my debts and then repay him the money over the next year instead.

I have contacted payplan with regards to a settlement offer (£3,500) and they have given me two options


''Short settlement is an offer to the creditors of a reduced amount to clear the debt, requesting a write-off of the remainder of the debt

There are no guarantees that these offers will be accepted by the creditors and they will have an effect on your credit file

The Short Settlement will show on your credit record for 6 years as “partially satisfied, £x written off”. This can mean that if you wish to get further credit in the

future, because you did not pay your debts in full, you may have higher interests rates.

Full Settlement means that the you have enough funds to clear the debts in full.

This figure will include any interest and charges added during the arrangement.

The debts will show on your credit file as “satisfied”, with a nil balance next to it, for 6 years''


I contacted them and asked if they could negotiate for the short settlement but to have my credit file marked as 'satified'. I looked at the national debt line page on full and final settlement offers and it says that you can offer a lump sum and have your credit file marked as a full and final settlement but payplan say that this is not possible.

What do you think i should do? I want to go with the short settlement and give them the money I have? I want to get a mortgage and look to buy a house in the next few years and I am worried that having a partial settlement on my credit file will make it harder to do this. Should I contact my creditors directly? or do I continue paying payplan for another two years to ensure that my credit record is marked as satisfied?

Many Thanks in advance x

jtr2803

I am sure someone else will have better advice than me but it IS possible to make a reduced offer but still have your file marked as full and final settlement and some creditors are happy to do this.

I recently negeotiatied a F&F with Cabot and have had a letter stating they have accepted the payment of £X against the balance of £X as a full and final settlement.

Payplan are there to get a deal as good as possible for your creditors so it may be worth you going to your creditors directly and asking them whether they could accept £X as a F&F, some may say no but some may say yes.

sal22_2

Thank you so much for the advice, I am a little reluctant to contact my creditors directly in case they reject my offer. I presume that as payplan does this quite often they would have more luck in securing an accepted offer but it is a good point that payplan are there to secure the money for the creditors...

jtr2803

Not that I am suggesting you lie of course but you have to suggest that it is only a limited time offer, maybe a family member has offered it to you but if you cannot secure an offer then they will use it elsewhere?

Some creditors will take lower than 50% some will want more, it depends who they are. I have a large debt with Cabot who have already offered me a good early repayment figure but the other 2 are with Egg who tend to want as much as poss.

I would write rather than phone and ask for a response in writing so you have everything documented. Search the forum for your particular creditors to see if anyone else has experience with F&F's with that company

3Dogs

This is some information on Full & Final Settlements which I picked up a few weeks ago from another thread which should be of use to you in your position (with thanks to original poster who I seem to remember was GeorgeUK but I could be wrong)

Debt still with original creditor NO default = 90% or more

Debt with original creditor but with a default = 75% or more

Debt with 'in house' debt collectors of the original creditor = 60% or more

Debt with external debt collector however still property of original credit = 40% or more

Debt owned (purchased) by external debt collectors = 25% or more

Google the names of the debt collector. Generally you will find forum topics and it will tell you. Alternatively post up your debts + debt collector here and we may be able to give some advice.

If a DCA owns the debt you will have a notice of assignment to say they own it.

If a DCA is acting for the original creditor, they will in their letters refer to 'their client' rather than the debt, i.e. the bank you owe money to.

As previous poster said, write to them and say you have been offered some money from a family member in order to clear you debt. You must request a Full & Final Settlement with the assurance that no further action will be taken and the balance written off, also that your credit file be marked as satisfied. Give them a firm date to reply by otherwise the family member will use the money for something else. If they come back offering a F&F higher than you are willing to pay, say that what you offer is all your family member can afford.

It is interesting from the notes above, the varying levels that are acceptable dependant on who currently holds the debt.

Good luck - all the best whatever you do - and well done for facing up to it all :T:T

sal22_2

Thank you 3Dogs for posting the info from another thread, I think that I have about 70% of the amount they want so hopefully they will accept that (debt still with the original creditors as far as I know) I will use the F&F settlement template and request that they get back to me by a certain date else the offer will expire.

What do I do with payplan? I suppose I should tell them that i am negoatiating with my creditors.... and I should continue to pay them the next instalment.