Full and Final Settlement Offers - Mainly All to Lloyds

TheLostSheep

Due to a change in circumstances, I will shortly be taking a redundancy package at work. This will see me leave with around £26,000. As you will see this is close to what I actually owe. I have another job agreed and confirmed.

I'm contemplating making F&F settlement offers to my debtors of 30% to start with. You see at the bottom of the message and from my other posts, that these are mainly with Lloyds.

https://forums.moneysavingexpert.com/discussion/2574567

I have had phone conversations with Lloyds and some letters previously where they have suggested they may negotiate on full and final offers. I'd like to to this properly though and write to Lloyds with regards:

My Credit Card
My Loans x 2
My Current account

I'd also write to Barclaycard who I owe £2500 to.

I have the National Debtline letters and was thinking of starting my negotiating at 30% of what I owe. How long does this process normally take and what's the chances of success? Naturally I'll make sure I use the appropriate terminology in my letters.

Although I've never defaulted as such, there has been some late payments and for the major debt - I am currently in a reduced interest payment plan with Lloyds for the Credit Card.

https://forums.moneysavingexpert.com/discussion/2574567

Arfhurdaly

I think you will have little chance of getting them to accept 30%, especially as you havent defaulted.

You best bet is to default, let it get passed to a number of DCA's, then negotiate.

If you want to protect your credit rating and do a F&F with loads, I doubt you'd get lower than 75%.

TheLostSheep

It's worth me starting at 30-40% from what I've read through and spoke to National Debt Line about on phone. I know you won't have read through the many threads I linked to, but the main CC account has been servicing interest for quite some time and is now in an agreed plan. They have verbally suggested I do F&F before without reference to any other debt, but I presumed I am better to go down the formal route.

TheLostSheep

Does this seem ok...

WITHOUT PREJUDICE

Dear Sir/Madam,

Account Number: XXXXXXXXXXX

I write with reference to the money which you are claiming on the above account.

I can confirm that I am unable to offer to pay the money which I owe in full. However I can raise £7800 and I wish to offer this as an ex-gratia payment in full and final settlement of the account.

I will never be able to pay the money which I owe in full due to my high level of personal debt and the current interest rates being applied where I am only making minimum payments.

This offer is made without prejudice, on the clear understanding that, if accepted, neither you nor any other associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability.

I also request that, if the offer is accepted you will make an entry on any credit reference agency file relating to the above account marked as 'satisfied in full’ with a zero balance and the account closed.

This offer is time bound and payment can be made within one month of receiving your written agreement to this offer and the method of payment.

I have included a copy of a table setting out how I have worked the offers out to each creditor. I trust you will find it helpful to see you are receiving a fair offer of pro-rata settlement.

I look forward to receiving your reply.

Yours sincerely



Mr X

TheLostSheep

Creditor Total Debt Full and final settlement offer
Lloyds TSB Credit Card £ 13,780 £ 4,187
Lloyds TSB Bank Account £ 2,350 £ 714
Lloyds TSB Loan 1 £ 6,557 £ 1,992
Lloyds TSB Loan 2 £ 434 £ 132
Barclaycard £ 2,550 £ 775
Total £ 25,671 £ 7,800

TheLostSheep

Do these seem OK?

Pott5y

Hi I think you will be incredibly lucky to get LLoyds to accept £30% settlement offers in your situation.

To give you and idea I was in a DMP with Payplan for 6 years and it would have taken me over 20 years to pay off my debts with interest and charges frozen. I had a credit card, loan and overdraft with lloyds all which had defaults against them and I still could only get them to settle at 70%. :mad:

Good luck with it. The letter looks fine and your calcs seem to add up.

Pottsy

TheLostSheep

Thanks Pottsy.

I guess I've been making payments and so on, but still would rather they accepted the F&Fs

Nothing to lose by starting at 30%. I know it's likely to be rejected ut a good starting point I’d think? Would be hopeful of meeting them at 50%

dougyd

cg81 wrote: »

Thanks Pottsy.

I guess I've been making payments and so on, but still would rather they accepted the F&Fs

Nothing to lose by starting at 30%. I know it's likely to be rejected ut a good starting point I’d think? Would be hopeful of meeting them at 50%

Good on you CG81.

I can understand why others don't think a 30% offer will be accepted but I also think they are forgetting the purpose of negotiating.

If Lloyds decline your 30% offer but accept 50% then that's still a lot better than if you went in at 50% and they negotiated you up to 75%.

As you say, you have nothing to lose!

TheLostSheep

2 points to add ahead of sending these:

Should i say that I am making these offers as part of redundancy?

Should I say how long I think it will take me to pay off these debts if not?

Wondering if I add to the bit of:

I will never be able to pay the money which I owe in full due to my high level of personal debt and the current interest rates being applied where I am only making minimum payments.

Pott5y

cg81 wrote: »

2 points to add ahead of sending these:

Should i say that I am making these offers as part of redundancy?
Yes! As this could add weight as the creditor may worry about you not being able to pay due to lack of work in the future

Should I say how long I think it will take me to pay off these debts if not?
Yes. reminding them that it may take ** years to pay this off on your DMP may just help... certainly won't hurt

Wondering if I add to the bit of:

I will never be able to pay the money which I owe in full due to my high level of personal debt and the current interest rates being applied where I am only making minimum payments.

Certainly will not hurt to include this.


Good luck.

Pottsy