Full and Final Settlement Figure?

BaldEagle

First post so be gentle with me

I have c.£50k of unsecured debt (credit cards, loans and overdrafts). Been struggling to pay these off for 6+ years. All have passed off, several times, to debt management companies.

Currently have agreements in place which would take 260 years to pay off...

Both CCCS and CAB have advised me that bankruptcy is my best option however a combination of stubborn pride and a genuine wish to repay my creditors at least some of my debt is making me shy away from that option.

I have no assets to speak of (no savings, rented accommodation, no car, etc.) so, by my reckoning, if I could get the money together to declare myself bankrupt, my creditors would get <1p in the pound.

A family member has offered to lend me a couple of grand on an interest free basis but only provided that I get full and final settlement agreements from all of my creditors.

1) Is 5p in the pound likely to be accepted?
2) Is full & final really full and final?
3) What is the likely effect on my credit score?

Any help or advice would be gratefully received.

Cheers,

Mike

fatbelly

BaldEagle wrote: »

First post so be gentle with me

1) Is 5p in the pound likely to be accepted? No
2) Is full & final really full and final? Yes
3) What is the likely effect on my credit score? messed up for six years anyway

Mike, from what you've said, you're the clearest case for bankruptcy that there could be.

Thank your friend for his offer and take £600 from him for the bankruptcy fees.

I'm with CCCS/CAB on this one

GeorgeUK

Hi Mike

Both CCCS and CAB have advised me that bankruptcy is my best option however a combination of stubborn pride and a genuine wish to repay my creditors at least some of my debt is making me shy away from that option.

There's no need to worry about repaying to creditors - they have sold the debt and will not be getting any more money. It's Debt Collection Agencies that now own the debt and they will have bought it for a few pence in the pound. The original creditor will not be getting any more money no matter how much you pay.

A family member has offered to lend me a couple of grand on an interest free basis but only provided that I get full and final settlement agreements from all of my creditors.

How long would it take to pay back this friend?

1) Is 5p in the pound likely to be accepted?

Rather than getting nothing when you go bankrupt? They may not believe you will go bankrupt so there's no way to really know until you ask.

2) Is full & final really full and final?

Yes. As long as you get written confirmation that the payment is in full and final settlement of the debt or saying that you will not be liable for the remainder.

3) What is the likely effect on my credit score?

Depends on what you credit score looks like right now. Have all the accounts been defaulted? Do you have any CCJ's? If you only have defaults, these will drop off your file 6 years after the default date. CCJ's could remain until the debt is settled.

Why are you concerned about your credit score? Just wondering incase you were looking to get more credit for some reason.

I know nothing of bankruptcy and would definately bow out to the knowledge of CCCS/CAB/Fatbelly. I can uderstand that you may be reluctant to go down that path - i would be, but only because i don't really know what it entails.

If it were me, i may look at checking whether the credit agreements were properly executed (containing all the required terms) - if they weren't then they may not be able to enforce the debt. This however would not apply to overdrafts, you may need to go to court to defend why you think the debt was unenforcable and it would take 6 years before you felt comfortable that all this was properly finished with (when debts became statute barred).

There is a bankruptcy section on the forum - it may answer a few of your concerns and see how others have coped through it.

BaldEagle

Thanks to both of you for your feedback. I think, having gone through my options, I'll ask them for just the court fees and go down the bankruptcy route.

sickasachip13

I've no expertise to offer other than saying that bankruptcy would seem to be the best option and that once it's sorted at least you'll be free of this. Good luck.

GeorgeUK

Have you requested copies of credit agreements for the loan and creditcard accounts (not overdrafts) to see if the agreement was properly executed? If it wasn't, then the debt may not be enforcable.

Have a search on the board for CCA requests. Section 127(3) of the Consumer Credit Act states that if an agreement is not properly executed, then a court must not enforce the agreement. This means if there are terms missing from the agreement or they cannot provide a copy of the original signed agreement (for agreements made before 6th April 2007) to the court, then the court should not enforce the debt with a CCJ etc. This would mean that the company could request payment, but nothing more. After 6 years of no payments, the debt would also be statute barred.