Full and Final settlements help needed

denzil13

Hi all,

Since Nov 2008 we,ve been on a DMP through CCCS with 9 creditors between the 2 of us. In total we pay £600 pm to CCCS which they distribute between all the creditors which equates to just under 50% of the contractual payments to each creditor. The creditors have all accepted these reduced payments and seem quite happy with the arrangements. We have already paid over £11000 since the start of our DMP which when we started we had £33000 debt but the interest and charges have accumulated as well.WeI asked them all to freeze the charges, some lowered it some froze for a short period.

Now my question is come November I'm about to be retired on medical grounds and recieve a £30000 payout. Now our total joint debt to these 9 creditors is £28000 What we want is to clear the debts with offers of full and final settlements. I'm worried that due to the regular payments the creditors are getting they will either not accept an offer of a f&f payment or would only accept a high settlement figure. We would obviously like to pay as little as possible to achieve this and not lose all my medical payout to creditors as we need a newer car soon as our 10yr old vectra is starting to cost a lot on repairs and my wife needs a reliable car for her job. With the rest of the money we would like a bath fitted as we dont have one and our shower is getting on.

I was thinking of doing a budget review with CCCS with a view to reducing the monthly payments to our creditors thus becoming more of a problem client in the hope they will accept a reduced f&f settlement.

Is this wise or are we playing a dangerous game. All we want is to be debt free.

Thanks for reading

DarkConvict

On your current payments how long will it take to clear the debts, if its still along time they are more likely to accept. I do not think reducing payments short term will help with offers.

Always state the money is coming from a 3rd party/family member
Add a 14 day reply deadline to all settlements offers
Use the national debtline F&F template as the basis of the offer letter.
State if they do not accept the money will be made available to other creditors in F&F offers.
Never off more money than you have available.

If on a DMP, i would go in with offers between 20-50%. See what replys you get back.

GeorgeUK

If they are aware that your financial situation is going to change and you are retiring on medical grounds, there is a better chance of them accepting a F&F. If they try to put pressure on you though, you could always request copies of the CCA's (if the agreement was made before 6th April 2007). If the agreements are not properly executed, then they should be jumping at the chance to get anything.

I agree with what DC said and also think your process for tackling this is correct. Once your situation changes, reduce your payments with the assistance of CCCS and make them an offer. Keep it low and hopefully they will either accept or try to negotiate. I would keep the CCA requests as a backup for now though.

denzil13

DarkConvict wrote: »

On your current payments how long will it take to clear the debts, if its still along time they are more likely to accept. I do not think reducing payments short term will help with offers.

Always state the money is coming from a 3rd party/family member
Add a 14 day reply deadline to all settlements offers
Use the national debtline F&F template as the basis of the offer letter.
State if they do not accept the money will be made available to other creditors in F&F offers.
Never off more money than you have available.

If on a DMP, i would go in with offers between 20-50%. See what replys you get back.

Thanks for your swift reply.

Not counting interest and/or charges it would take about 4 years to repay through the DMP if this remained at £600pm but as my income will be dropping soon I know we will not be able to keep this up. thats why I'm so keen to be debt free.

denzil13

GeorgeUK wrote: »

If they are aware that your financial situation is going to change and you are retiring on medical grounds, there is a better chance of them accepting a F&F. If they try to put pressure on you though, you could always request copies of the CCA's (if the agreement was made before 6th April 2007). If the agreements are not properly executed, then they should be jumping at the chance to get anything.

I agree with what DC said and also think your process for tackling this is correct. Once your situation changes, reduce your payments with the assistance of CCCS and make them an offer. Keep it low and hopefully they will either accept or try to negotiate. I would keep the CCA requests as a backup for now though.

Thanks for getting back to us so quick

I was thinking if they knew I was being medically retired they would be after all my payout but then I see the sense in what you saying as well.

We're not sure about the CCA thing is What does CCA mean. Sorry for sounding stupid but I googled it and it came up with "Consumer Credit Act" The agreements were mostly before the 6th April 2007
but 2 of them are overdrafts which started off at £100 each and built up over the years to £3500. Another one what do you mean about the agreements not being properly executed. How would we know if they were or weren't and what does this mean. Is there perhaps a good idiots guide on the website to explain all these terms and proceedures.

Thanks for all the advice. Its certainly helping.

Deep_In_Debt

I wouldn't tell them how much of a payout you've got otherwise they will expect the full amounts.

GeorgeUK

Hi denzil, sorry about all the jargon - just get so used to it sometimes on here.

CCA = Consumer Credit Agreement
CCA74 = The Consumer Credit Act 1974 which regulates CCA's.

For a CCA to be properly executed (completed in a way to make it legally binding), the legislation requires that it contain the prescribed terms and be in the prescribed form. This means that if any of the required terms are missing from the CCA or that the CCA did not take the required form (eg. not showing the APR or the document being on 2 seperate sheets so that one sheet could be from any document), then the CCA is not enforcable.

If the CCA is not enforcable, section 127 part 3 of the CCA74 states that a court must not enforce the agreement. The debt would still exist, but would be unenforcable - meaning that they could request payment but could not do anything to make you pay. No legal threats etc the same as if the debt was statute barred.

There are some threads with good details. I'll look out the one i did for the legislation (so you can see where the arguments are coming from) and Niddy's thread (although he has now left the site he posted a very useful guide).

Edit:
Niddy's guide - https://forums.moneysavingexpert.com/discussion/2532927
Legsilation - https://forums.moneysavingexpert.com/discussion/1496721
Basic details - https://forums.moneysavingexpert.com/discussion/578486