Is this a legally watertight settlement?

chattychappy

GoldenJill wrote: »

Someone will correct me I'm sure if I'm wrong - however, do you not need them to say 'full settlement' rather than 'partial' - there is nothing stopping them selling the rest of your debt onto a debt collection agency. don't sign or agree until they change that! even though they say it, it has, shock horror!, been known to happen time and time and time again...

This is a good point, but I think the idea is that the debt will remain until it becomes statute barred and be recorded as such. They are, however, undertaking not to attempt to enforce it. So although they could sell it on, it wouldn't be worth much as it couldn't be enforced. I think credit providers such as MBNA would be reluctant to record something as "full settlement" when clearly it isn't. Of course the OP would still be free to pay off the rest if she wanted to and was able to.

I wonder if anyone else has any a view on the risks or otherwise of the partial settlement thing?

To the OP: You must make sure that no further transactions hit that account. This would be my "shock horror" fear. Are you certain that you don't have any continuous charge authorities going onto the account - eg subscriptions, insurances etc?

YorkshireBoy

chattychappy wrote: »

I wonder if anyone else has any a view on the risks or otherwise of the partial settlement thing?

Well you're the lawyer (;)), but Experian say...

Partial settlement

The lender has reported that:

the debt was included in a voluntary arrangement which has now ended successfully;

the debt was included in a bankruptcy order which has now been discharged;

the lender has accepted a smaller amount; or

the lender has repossessed the asset and is no longer chasing the debt.


http://experian.metafaq.com/resources/experian/Downloads/credit_report_explained_Aug09V4.pdf (page 13)

I've highlighted what I think is the key word.

AndreaE

Thank you Daisy Duck and OneHubbyOneSon4Debts for your comments.

Golden Jill - that is exactly my concern. They have told me that they have to use the wording 'Partial Settlement' to show on my credit record that I did not pay in full but I will have paid the partial amount we have agreed upon.

I told them of my concern that they might sell on the rest of the debt and they said they couldn't and wouldn't and were happy to add to the letter the wording "we confirm no further action from either ourselves or other collection agencies will be taken to recover the remaining balance" at my request so that I had that assurance in writing.I am not 100% convinced though that the balance of this debt won't come back to haunt me at some point in the future so thought I would ask here if there was a change to the wording I could ask for that would give me total reassurance that this cannot happen. Another member here advised me I should request the wording 'in full and final settlement' - as I am not paying the full amount but only the full agreed amount, might the cc co do this if asked or legally will they have to word it as partial in order for other cc companies to see what happened here?

YorkshireBoy

AndreaE wrote: »

...will they have to word it as partial in order for other cc companies to see what happened here?

Yes, under the 'principles of reciprocity', ie if they want to know (from CRA searches) if new customers have only partially settled their debts with other lenders they must inform the CRAs about their own existing/old customers.

In short, with the CRAs they can only get out what they put in!

AndreaE

Sorry - 2 new posts whilst I was typing.

Chattychappy - thank you for that comment re subscriptions. I hadn't thought of that. There is nothing that I am aware of but as I had online billing with mbna I can no longer log in to check past statements as my account has of course been disabled so I will have to ask them to check at their end.

Thank you YorkshireBoy - it seems that 'Partial Settlement' is the accepted cover-all phrase for a debt that is done and dusted but not at full value.

YorkshireBoy

AndreaE wrote: »

...I will have to ask them to check at their end.

They won't be able to tell you which of the many transactions posted to your account are CPAs. Only the companies (you have the CPAs with) themselves will know that. You'll have to rack your brains, sorry!

chattychappy

[FONT=&quot]Foakes v Beer[/FONT]

YorkshireBoy wrote: »

Well you're the lawyer (;)), but Experian say...I've highlighted what I think is the key word.

I think you got it right. Some would say MBNA are above the law anyway.. but it's this case that all law students are taught: http://en.wikipedia.org/wiki/Foakes_v_Beer

Wish this stuff was on Wikipedia when I was a law student! Think it gets remembered because of the funny name. Anyway, I don't suppose there would be a legal problem in such a highly regulated sector. But I was wondering if anybody had practical experience of these settlements - ie whether debt collectors nevertheless try it on, or there are other issues. Since nobody has chirped up, it seems the OP will be OK.

(Obviously this and my other posts shouldn't be taken as legal advice.)

view

Well I'm only going by personal experience - I had a company accept a F&F payment and the wording said 'partial' and they would not chase the debt nor would not sell / send it on .... a month later I receive a letter from a DCA for the above payment... had to copy all documents, send recorded, they agreed it should not have been sold to them - and then I receive another letter from above DCA's "legal" department (uh-huh) saying if I don't pay they'll take me to court - or send on !! So had to send all documents copied, recorded yet again....

mufc689908

AndreaE wrote: »

I have made an offer to MBNA in settlement of my outstanding balance. They have accepted the offer and at my request have written to confirm the details.

They say:

"We confirm your offer of £XXXX will be accepted in Partial Settlement of your account. Our agreement is conditional upon payment being received before 30th July 2010. Upon receipt and clearance of the payment, we confirm no further action from either ourselves or other collection agencies will be taken to recover the remaining balance.

Your account would be registered as a Partial Settlement with the Credit Reference Bureau for six years. Please be aware that a statement will be sent to you confirming receipt of your Partial Settlement payment, which is for your information only as your account will subsequently be closed. Further use of your card will void this agreement, therefore, if you have not done so, please return your card and any unused credit card cheques."

If I now pay them the agreed amount, can I be sure that this is the end of the matter and the unpaid amount will be history and neither they nor anyone else can come after me for it?

I accept that this will stay on my credit history for 6 years but as I have other debts anyway, that is not important.

Many thanks,

Andrea

Its kosher

I got 8k written off my MBNA C/C doing exactly this.

34% APR? I dont bl**dy think so :-)

stebiz

jonesMUFCforever wrote: »

I thought so daddy pays off my bills and I get to start again.

The OP came for help. If you can't (Or won't) give it, why not give MSE a rest, and keep your post count down;)