Help how to deal with Debt collection agencies

Ms.A

Hi,

We have been facing financial problems since 2008 most of our accounts are now with debt collection agences, the Citizens Advice set up low payments for ourselves, but have now closed our case. we are currently adhering to the payments. we would like to tackle these debts head on, and I just wanted some advice in how to make offers to the agencies to settle the account, i read on here that debts are often sold a very low amount, so what percentage of the debt sould we be offering them to settle the account.

Thanks.

Tixy

Hi

Have a read of this - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

What to offer is hard to judge.
If your debts are with external debt collection agencies (ones that are properly independant not inhouse collectors) then you could start by offering around 20%.
If they are with inhouse collectors they usually want more than an external collector.

Whatever its usually a negotiation process so start your offer low as you can go up but not down.

If you are making regular but small payments then 20% would be a really good deal, 25-33% would be okay. Some DCAs won't accept less than 50%, some will not accept any offers and you might need to move on to different debts and then come back to them 6months later or so to see if they are up for an offer by then.

Good luck.

Happytogetdebtfree

Wishing you all the best with your debts :-)

DarkConvict

Follow tixy's advice and read that artile about settlement offers.

The amount they accept depends on many factors from amount owed, how much they paid for it, how much you are paying, estimated time to pay it back, company policy on settlements and current company strategy (i.e. more profit long term, or short term profits). 20-30% is a good start, but be expected to be in around the 50% area. Use the template letters that are available and all state the settlement money is from a friend not from yourselves, and put on a 14 day reply deadline to ensure a response, tagging in if no response is received by date x/y/z then the money will be offered to other creditors.

yellowpinky

Hi Ms.A, just to say I'm in the process of doing something similar so am watching your thread and the advice on it with interest. Good luck

Ms.A

Thankyou for the advice, the link was very helpful!

Is it ok to make offers to one creditor at a time? we have about 10 different ones, with varying amounts owed, my plan was to get rid of the lowest amount ones first, and then move on the the higher figures. Most of the debts are with external collectors apart from 1.

any further advice would be much appriciated.

Thankyou!

Tixy

Hi Mrs A

Yes its fine to make offers one by one.
If any of them tried to suggest this wasn't treating all creditors fairly then you'd just remind them its not your money its a gift from a relative.;)
As DC says, if the first one won't accept an offer you are happy with at first you can always move on to offering it to another.

never-in-doubt

If the debt has already been sold to the DCA (depends on the total value of the debt account) then start negotiating at 10% going no higher than 25% (on affordability).

For bulk debts, bought by DCA's they usually buy for around 3-8% of the value - ensure you make an offer higher than this and you'll be fine.

I'd start at 10%, then go up in 5% intervals until you reach maximum affordability.

If the DCA does not accept when you get to 25% then you need to leave the account sitting there for longer, so they realise they get something - or nothing at all! So long as they break into profit they usually accept, the problem is knowing at what point they bought the debt (i.e. how much)...

Best of luck - Tixy and DC have already provided the best advice - this is my 2p worth about the actual settlement amounts you should be looking at! 20% as a starter offer is way too high!