How low might a settlement figure go?

AndreaE

I have a sizeable credit card debt which has had the interest frozen and I have been paying off a little each month for the last 6 months or so.

The CC co have now said that I must either considerably increase the monthly payment or they will sell the debt on. I can't afford the monthly figure they have suggested.

As an alternative, they have offered me a lump sum price to pay off the debt which is 40% of the total sum owed but they have said that if I go back with a lower offer they will consider it but it all needs to be done and dusted by the end of this month.

Does anyone have any idea how low they may go?

In an ideal world I will add this to my mortgage and pay off the cc but as I recently had an agreed 3 month mortgage 'holiday' which is classed as arrears within the past year, my lender will not agree to this although I am now back on track with monthly payments.

I need to have a solid year of paying in full and on time before they will do this so I hope to borrow the money to pay off the cc co for 8 months or so until I can add the amount to my mortgage so obviously negotiating with them for the samllest possible payment is very important.

Does anyone know what 'p in the £' they sell debt for and therefore what offer from me may look acceptable?

Many thanks,

Andrea

stephane_2

That all depend on how much you can afford, if you can only afford 25% of the outstanding balance then offer that, if it is 30% then try that. I would think that if they have offered 40% of outstanding balance then I would think that something around the 28% to 32% would be seen as reasonnable.

Any

You have mortgage with arears problem, you have CC with problems... I wonder who do you think will lend you money?? Your only option is family?? Whatever you do, don't go to any loan sharks!!

As Stephan says - it depends how much you can afford. If your family says we can lend you £10K they either take it or not - but they know if they don't you can just go bankrupt and have the whole thing written off (together with your life for 5 years or so but sometimes that is the only option).

brians_daughter

please ensure that if you do make an offer and it gets accepted that it is A FULL AND FINAL SETTLEMENT.

Some companies will accept your offer then sell on the rest of the debt to someone else. You will still be liable to pay it even tho you have agreeed a settlement figure with original creditors because it wasnt full and final.
You need to ask these questions
DOes this figure constitute a full and final settlement?
will the outstanding balance be written off?
will you sell the remainder on?

You also need it in writting that it is full and final and that the remainder will not be chased by someone else

I imagine they will default the account - it sounds like you have an arrangement to pay on the account and so it hasnt yet ben defaulted. If it defaults you will have it hanging around on your credit file for 6 years.

In answer to your question my ex sister in law managed to get 30% of the value as a full and final

AndreaE

Thank you Stephane and Brian's Daughter for your comments.

I had suspected that around 30% might be acceptable.

Thank you also Brian's Daughter for mentioning 'full and final settlement' as I may have forgotten this.

Any - I no longer have mortgage arrears and, as I said, I am now back on track but as it is on my record, my lender needs to see a full year of payments before I can remortgage.

I do not have a good enough credit rating to borrow the money in any 'traditional' way but there is a small possibility that a family member may be able to lend me the money for a year until I am able to remortgage. Before approaching them I wanted to have a better idea of what I was asking to borrow.

Many thanks,

Andrea

Any

Those arrears are on your file for some time, so the fact that you are paying now didn't delete the problem completely - that is why you need those 12 mths.

That is what I thought... If your relative won't lend you money just please don't go to loan sharks... It might seem that it will help short term, but long-ish term (ie those 12 mths) would be suicide!!

Good luck

brians_daughter

Andrea, how much do you owe? Just curious, you obviously dont need to tell us! Just with you saying about re-mortgaging i assume it is a sizeable sum?

brians_daughter

Also please take into account when the CC co default the account your current lender may not be willing to let you remortgage with such a recent default on your file. SOrry to sound negative but i wouldnt want you to find yourself in a situ where you owe someone £1000's and cant give them the money back as promised due to a default.


To be honest thinking about this... thay will default you whatever, so i would consider (if you cant afford the new monthly payment paln) letting them default you and sell it on then arrange what you can afford with the DCA. They will take what you offer, if they want more you need to send them income expenditure forms to show what you can afford. Its never a good idea to secure unsecured loans - i am sure you know this anyway but just pointing it out