Owing money to debt companies

jukeboxmusic

Hi, not sure if i've posted in the right section, hope i have. Basically, i got accepted for three catalogues around 18 months ago and was paying them for the first few months. Then my hours at work were cut drastically, anyway, i couldn't afford to pay them anymore and now the debt has been bought by debt companies, i think a couple are RED debt collection services.

After all the usual letters from them, i got a letter today saying i owe £538.14 (for one catalogue) but if i make a one off payment of £269.07 that will be the debt paid off.

If i pay this, how does this affect my credit rating? Does it show that i have paid that catalogue in full? Does it clear this particular debt from my credit history and is that the last i'll hear of this debt.

Thanks.

Tixy

Hi

It depends on what they will agree to as part of your reduced full & final settlement.
Have a read of this - which should explain what you should ask for in return before agreeing to make the payment http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

GeorgeUK

You need to be a little careful with this JBM.

You could write to them and make an offer of a reduced full and final settlement offer. If they write back and say it will be a partial or short settlement, then this is of no use to you as the debt will be sold on to another DCA who will chase you for the remainder. Only a Full and Final offer will benefit you.

If you have a default on your credit file against this debt, you could request this be removed as part of the agreement. Only the company that put the default on your account can remove it so be aware of this. Also if they do not agree to remove the default, it will remain for 6 years.

Did they issue a default notice? Are you able to make a settlement offer within 30 days of receiving that - if it's not already passed?

jukeboxmusic

Hi, thanks for the replies.

It was the debt company that offered to reduce the debt in a one off payment as they have been sending me letters for months and i have ignored them, as i said i just couldn't afford to pay it. They did say it would be a full and final settlement.

My real worry is that when i do pay this, will this have any affect on my credit rating at all? As it is a debt company thats just bought the debt i'm not sure how this will work as obviously the company i originally owed the money to have sold my debt.

Will it clear from my credit rating completely, and show as this company having been paid off in full?

Also, i'm in Scotland so i'm not sure if the rules are different from England and Wales.

Tixy

Not really different rules in terms of F&Fs, as the credit reference agencies are the same.

If they agree to mark your file as satisfied in full then that would be good. Often though they migthl agree legally its F&F and won't chase you further but still mark your file as partially settled, which would then mean other creditors (or potential lenders) would know you hadn't paid in full.