Full & Final Settlement - Advice please?

SkintnScared

Good morning all

Its been a while since I logged onto here and Ive been chipping away at my debt over the last four year. Had a few blips but all creditors generally happy with my contributions.

My partner and I are currently expecting our first baby and with this in mind he has also just come into some money and has offered to settle my debt in full to improve our future and hopefully allow us to buy a house together in the future. How do I ever thank him enough?

Anyway, I have a few questions please?

1. How do I best approach this? Do I offer full and final settlements (if so, how much) or ask them for full and final settlement figures?
2. Do I do all of this in writing or over the phone?
3. How do I ensure they wont pursue me in the future? How do I get them to confirm for definate that it is paid off?
4. Also, how do I get them to update my credit report to settled?
5. I also have a few defaults and CCJs on my account? How long would it take for these to clear?

As always, thank you for youre help all :rotfl::A

SnS

SkintnScared

Also...........would it be best to settle them in full? Just been reading and obv if I want to clear my credit file as soon as poss would it be best to pay in full? Dont want to be seen to be sherking my debts but obv the less I can take off my partner the better?

Thanks

SnS

Tixy

Hi

5. I also have a few defaults and CCJs on my account? How long would it take for these to clear?
Defaults stay on for 6years from the date of the original default, CCJs from the date of the CCJ.

1. How do I best approach this? Do I offer full and final settlements (if so, how much) or ask them for full and final settlement figures?
I would offer F&F figures rather than ask for them. Are these accounts defaulted? are they with the original creditors still, with in-house DCAs or third party DCAs? are you currently paying more or less than the minimum payment? Depending on those you could start with anything from 20% to 60% as a starting offer.

2. Do I do all of this in writing or over the phone?
Always in writing. You need written confirmation from them that the payment would be F&F and they would not chase your further for the debt before you pay (see national debtline factsheet on F&Fs for wording etc)

3. How do I ensure they wont pursue me in the future? How do I get them to confirm for definate that it is paid off?
In writing - see factsheet as above - keep copies of these letters to & from creditors (you need to keep them for years - at least 6)

4. Also, how do I get them to update my credit report to settled?
Again you put it in your letter and then check afterwards. Keep on at them to do so.

Tixy

SkintnScared wrote: »

Also...........would it be best to settle them in full? Just been reading and obv if I want to clear my credit file as soon as poss would it be best to pay in full? Dont want to be seen to be sherking my debts but obv the less I can take off my partner the better?

Thanks

SnS

Depends really on how key your credit file is in the short term. If your partially settle then it will show as partially settled on your credit file (usually - its rare to get them to agree to show fully satisfied if you F&F).
But if you have defaults for these debts then the debt and therefore the partial settlement will only show on your file for 6years from the date of the original default.
Eg -if you defaulted 3years ago you'll only have 3years where it shows as a partial settlement.

Many people would say that with defaults on file you are going to struggle to get any mainstream credit anyway for the remainder of the 6year period so having partial settlements won't make things much worse.

SkintnScared

Brilliant thanks Tixy, really appreciate your advice

Ive had a quick look on national debtline and Ill put my letters together this afternoon.

Most of the debts are with DCA, but a few with the original creditors i.e. barclays, halifax and HSBC...many of the others have been passed on.

many thanks again

SnS

Tixy

You might want to change your letter slightly to say that the money is being offered to you by a relative (or friend - I probably wouldn't say partner) only on the condition that is pays off your debts in full. This means they cannot turn round and reject your offer but say that they want the money towards the debt anyway.

People also sometimes add in something like this offer is only available until (2weeks time), otherwise the money will be offered to a different creditor. This sometimes helps speed things up and doesn't leave you in limbo not knowing whether they will accept it or not.

As always with F&Fs start your offers low but be prepared to go up a little if you need to (and can afford to).

SkintnScared

Many thanks Tixy

I have put together my first letter and was just wondering your thoughts please? I will then copy and paste to all creditors:


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 £82.22 and I want to offer this as an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you nor any 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.

The money is being offered to me by a relative, only on the condition that is pays off my debts in full and not as a contribution to the balance. Therefore, the offer is only available until 18th March 2011, whereby, if I have not heard from you, it will be offered to a different creditor.

I also request that, if accepted, you will make an entry on a credit reference agency file relating to the above account as having been paid and the account closed.

Payment can be made within 3 weeks of receiving your written agreement of this offer and method of payment.

Many thanks as always

SnS