full and final payments

loobyloo1980

I was really interested by something on a previous post about offering full and final settlements to debt companies rather than trying to pay off the whole debt over a period of years. The poster said most debt companies are given a % they can accept around 20% - 50% of the original debt.

Has anyone successfully done this? Does it only apply to credit debts? I have a housing benefit overpayment and an income support overpayment. Presumably I would not be able to offer full and finals to them.... would I?

I am very tempted to contact the creditors and ask about full and finals. I will not pay back every penny unless I have to :-)

moggins

I'm waiting with bated breath too, I wish I'd known about this when I got divorced and stuck with all the bills

jason.lawrie

Hi, its only credit debts I'm aware of. Having worked for a debt collection company on every new client we got we were given guidelines how much could knock off if paid off debt in one go - normally 20% but could go as high as 50% - depends how much company needs the cash!! Range from store catalogues to major high st banks. Also depends on person on other end of phone line - collectors are targetted on money collected so always make offer at end of month - they might swing for low settlement if it boosts their collection figures rather than if you made offer at start of month. If the company involved phones you and you are already on a payment plan say that you may be getting a little help from parents and ask how much settlement figure will be. I know of instances were credit card companies will accept 50%. Good luck

loobyloo1980

moggins wrote:

I'm waiting with bated breath too, I wish I'd known about this when I got divorced and stuck with all the bills

I know, it sounds like a really good payment avoidance strategy to me :-)

Well to be fair, it's not that I want to avoid paying back my debts. But I have a cousin who owes a few grand and got an admin order. Her payment terms mean it will take her 20 years+ to repay, so the courts are considering a composition order to stop it dragging on so long. Effectively she will have the vast majority of her debt written off in court, so if I can do it with this strategy then why not. :-)

loobyloo1980

jason.lawrie wrote:

Hi, its only credit debts I'm aware of. Having worked for a debt collection company on every new client we got we were given guidelines how much could knock off if paid off debt in one go - normally 20% but could go as high as 50% - depends how much company needs the cash!! Range from store catalogues to major high st banks. Also depends on person on other end of phone line - collectors are targetted on money collected so always make offer at end of month - they might swing for low settlement if it boosts their collection figures rather than if you made offer at start of month. If the company involved phones you and you are already on a payment plan say that you may be getting a little help from parents and ask how much settlement figure will be. I know of instances were credit card companies will accept 50%. Good luck

That sounds so fabulous, thanks so much for your post and your reply. I kind of thought the non credit debts wouldn't be affected, but may try them anyway :-)

As for credit debts, I will try my hardest to get them all to do it. My payments were worked out on pro rata by CAB and will take 6-7 years to pay at current rate. Some of the payments are only £5 per month so an offer of lump sum may seem attractive to some of them.

jason.lawrie

Go for it, I was on a CCCS plan but tested the water out for myself by explaining my situation, enclosed copy financial statement and explained I got myself into trouble and no quick fix but could offer £x as full and final. Money Shop wrote back thanking me for honesty and offered 50% settlement, Abbey were going to take 50%, Barclaycard were looking at 20-30%. These payments through CCCS were £5-10 month. They may try and barter higher but stand firm - for eg £5 mth for 5 years or £100 lump sum, this is were business sense should prevail.

moggins

I'm amazed at how much I have learned since coming here, thanks to all the people here I am saving a fortune in day to day living.

I still have one large question to ask but am waiting until I can figure out what board it belongs on before I post

Jonni2bad

A few years back at the beginning on financial difficulty, we managed to settle our credit cards at approx 55%, but I think if we had waited a while could have got this quite a bit lower.

I can only advise on a bit of bartering - they tend to ask for quite a high payment and you just have to offer much, much lower, until you eventually reach a 'compromise'.

Work out what the percentage you'd like to reach equates to in real terms, i.e. £xxx.xx, and perhaps base your discussions with these companies on the basis that you only have £x with which to pay them all off. Their share is thus £y, and you can't go over it for one company, otherwise you won't have enough to pay the rest off.

You've nothing to lose giving it a try, and potentially lots to gain.

Debt_Free_Chick

There's full details including a sample letter to send to your creditors here

http://www.nationaldebtline.co.uk/england_factsheets/factsheet_24.php3

loobyloo1980

Right I have looked at my lowest debt currently on pro rata payments and worked out it is actually now £376. I spoke to my Nan who said that she would stump up something towards it IF they agree to settle. I have decided to ask them to consider settling for a third (£125). I know it is a long shot, but at my current payment rate that would take 18months to repay so they may opt for it. If not, I would then up it to half. She was very reluctant as I already owe her about £700, but said if it would clear a debt off cheaper that way she would lend it.

winkle1

Hiya, I did a FAFS a few years back - I had an overdraft with Barclays that went to a debt collection agency. i owed over £2,000 but they let me pay back £1300.

Do ask, it really is worth it.