Help!!

drizzlydays

Couldn't think of a more appropriate title!

I am in debt to the tune of 15000 with credit cards and I barely earn enough to make my minimum payments.

I asked all my creditors last year if i could make reduced payments but haven't kept up to date with these so some of my cards have just been unpaid for a few months now.

I am the first to admit I am lazy and idol when it comes to money.

I have recently found out that I am to inherit £4000

Before I mess this up and waste the money I am hoping for some advice as to the best way to use it. My friend suggested offering a reduced settlement figure to all my creditors - is this a good way to go?

Also - say they accept, will the accounts remain on my credit file forever unpaid then?

Hope this all makes sense I really want to put this £4000 to good use and sort my finances out

bottleofred

Hi drizzlydays and welcome to the forum,

An offer of full and final settlement could be the way to go for some of the debts, but I'd be very surprised if the £4000 will be enough to clear the total debts of £15000. Regarding the wording of a full and final settlement offer, there is a template letter on the national debtline website which you can adjust as necessary. How much each creditor will accept will vary greatly, but as your debts have only been ongoing since last year it can be a difficult thing to judge. You could try offering as low as 20% and hope that some accept, but the likelihood they'll possibly make a counteroffer of say 75%, after which time you would make another counteroffer and so on. However, if you are lucky enough to agree on settlement figures, be sure to get the offer in writing and ensure the letter says as a full and final settlement of the debt. Regarding your credit file, I wouldn't be surprised if you already have defaults due to reduced payments, but only you'll know that for sure. Partial settlements are marked on your credit file as partially settled.

Hannah_10

Could you do a statement of affairs please, you have just crossed the line from "problem debt" to "debt crisis" and so you may be salvagable. Putting a SOA up will give us the opportunity to find out.

Click>> https://forums.moneysavingexpert.com/discussion/107280

drizzlydays

I'm really sorry I hope I don't come across as rude I just wanted some quick advice on reduced settlement offers. thank you for your time I do appreciate it

Jimby509

Drizzle.... as said already I don't think £4000 would be enough to settle your debt of £15,000 totaly. But this £4000 can be put to excellent use in reducing the £15,000 by making full and final offers on some on the debts that make up the £15,000.

If you follow Hanna's advice and fill in the SOA we will be able to see how many creditors make up the £15,000 and what amounts. This will help you get advice on how much to offer as full and final and to which debts. For example, if a debt has been sold to a debt collection agency and you have missed payments, we know they have the potential to accept a lower Full and Final settlement than a debt that is still owned by the original company that you have been paying faithfully.

Also - say they accept, will the accounts remain on my credit file forever unpaid then?

No, it will say 'partial settlement' and stay on your credit file for 6 years.