Full and Final Settlement Advice

j2140b_2

My partner and I went into a debt management plan recently to help us sort out three credit card debts that we have (totalling just over £9k). This company we are using also offer a full and final settlement negotiation service for a fee. We have been offered some cash from my father in law in order to pay off these debts and we would like to go down the F&F route.

Has anyone got any advice about this i.e. what sort of figures should we offer as settlement ? Are they likely to accept ? Should we use the Debt Management Company or should we approach the creditors outselves. Any advice would be much appreciated. I did speak to the National Debtline and they adviced that F & F settlement negotiations should start at 40% of the debt. Seems alot to me and I can't see why the creditors should go for it but any views would be much appreciated.

DarkConvict

If they charge a fee, your using the wrong DMP provider. See pay Vs. Free Providers - http://forums.moneysavingexpert.com/showpost.html?p=31705157&postcount=10

I strongly urge you move to a free charity provider in order ot pay of debts sooner! - https://forums.moneysavingexpert.com/discussion/2077631
They are all good, but CCCS is most commonly used here.

As to settlement offer, this is probably what you looking for.

gonzo127 wrote: »

well here is a ROUGH guide on what companies have been known to accept,

please remember some people get lower amounts other have to pay much more than this,

these things depend on so many variables including what side of the bed the person in the company got out off

anyways rough guide is below

Debt still with original creditor NO default = 90% or more
Debt with original creditor but with a default = 75% or more
Debt with 'in house' debt collectors of the original creditor = 60% or more
Debt with external debt collector however still property of original credit = 40% or more
Debt owned(purchased) by external debt collectors = 25% or more

We have seen MBNA accept offers of just 15% but that is rare. Debt collectors do buy in debt as low as 2% however a more reasonable figure is 10-50%. So depending on what they paid and how much you have paid, and chance of repaying the debt soon etc, will depend on their acceptable figure. Basically they want a profit!

But also consider

For F&F offers it is recommended to
1) Use the national debtline full and final settlement template as the basic letter
2) Add in a 14 day reply deadline before offer is withdrawn (limited time offer)
3) Mention funds are from a family member/3rd party so they do not just ask you to pay more per month and think you are personally holding out on them.
4) If they fail to reply you assume they are declining and the money will be offered to other creditors in a similar offer.

Given the length and payment history they will likely be accepting in the range of 20-50% for settlement of the debts, but what they do accept is down to so many factors you cannot really guess, just offer and see what is made. Remember if they do bite but want a higher figure, do a counter offer.

bottleofred

Hi,

As darkconvict has said, it varies from creditor to creditor. You do need to say the money is from a family member and I would start with an offer 0f 20% and try to negotiate from there. However, don't send any money until you have received written notification from them that the money you pay is as a "full and final settlement" for that debt. And remember NEGOTIATE with them.

Good luck