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Full & Final Settlement - HELP!

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
9 replies 1.3K views
lvmlvm Forumite
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edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hello,

I'm currently managing some outstanding debts, 1 of which is for a Halifax Credit Card.

Wescot are pursuing the debt on Halifax's behalf and I have a formal arrangement to pay £20 per month with a current outstanding balance of £2477.63.

I wrote offering £500 as full and final settlement.

They have declined but said Halifax are willing to accept £1, 238.82 (50%) as a partial settlement.

This debt defaulted about 3 years ago now so I'm wondering:

Does the "partial" settlement mean they won't pursue me for the debt?

And...considering this debt has not even been sold to a debt collector, is a 50% partial settlement a good deal? Or would it be better just continuing to pay at £20 a month?

I have the money to pay it off (obviously I've said my parents have offered the cash).

Should I pay this off now or try negiotiating to maybe £1000?

I actually bank with Haifax and want to start using my ISA for next tax year so the sooner I get rid of this one, the better!
Mortgage Free Journey!
Total Purchase Prices - £1,031,000
Current Values - £1,150,000
Mortgage(s) March 2019 - £708,102
Aim for March 2020 - £695,000
Aim for March 2021 - £680,000

Replies

  • bottleofredbottleofred Forumite
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    Hi lvm,

    Full and final settlement details should always be made in writing and correspondence received in writing. The agreed amount from the debt collector should have the words as a full and final settlement of the debt somewhere in the letter and you should also keep the letter for 6 years in case another dca comes after you for the remaining balance. Partial settlements for debts go on your credit file as a partial settlement. Just because they have said you can pay 50% doesn't mean you have to and you could make a counter offer of say 35-40% if you like.

    Good luck and don't do anything until you have written confirmation

    Red
    If you've nothing decent to say, perhaps you shouldn't say anything.

    £2 savings jar £300:D
    Total credit card debts £1250:mad::mad::mad::mad::mad: - Will I ever learn!!
  • fatbellyfatbelly Forumite
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    A 50% deal is actually quite good for Halifax but you need a clear letter from them confirming the deal before you part with any money.

    A 'Partial Settlement' is OK as a mark on your credit file but the covering letter needs to state 'full & final settlement' or words that add up to that.

    Do you want to post the text of the letter (omitting references) and people will let you know what they think about it?
  • lvmlvm Forumite
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    Thanks Red and fatbelly.

    I sent a letter with the following paragraph in it:

    "As an alternative to this repayment plan, my parents have offered a total of £500 if this was to be accepted as full and final settlement of the account, my credit file amended to reflect this with the balance reduced to zero and no further creditors able to pursue me for any further debt in respect of this account."

    They have replied with:

    "Following your recent communication enclosing an offer of £500, in full and final settlement of the outstanding balance. Your offer has not been accepted. The minimum our client is willing to accept as a partial settlement is £1238.82. We look forward to your reply within the next 14 days."

    I'm fairly happy with the fact I know I won't get any credit for the next 3-3 1/2 years but just wouldn't want to pay this lump sum just for them to say it wasn't in settlement of the account.

    Do you think it's worth me writing back to them confirming that I would pay £1238.82 if they can confirm in writing that this is in final settlement of the account with no-one able to pursue the remaining amount? Or is what they've written good enough to accept?

    Thanks!
    Mortgage Free Journey!
    Total Purchase Prices - £1,031,000
    Current Values - £1,150,000
    Mortgage(s) March 2019 - £708,102
    Aim for March 2020 - £695,000
    Aim for March 2021 - £680,000
  • fatbellyfatbelly Forumite
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    lvm wrote: »
    Do you think it's worth me writing back to them confirming that I would pay £1238.82 if they can confirm in writing that this is in final settlement of the account with no-one able to pursue the remaining amount? Or is what they've written good enough to accept?

    I don't think it's good enough. The phrase from the National Debtline letter is ' neither you nor any associate company will take any action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability.'

    I don't think Halifax's current letter is clear on this.
  • bottleofredbottleofred Forumite
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    Hi lvm,

    Totally agree with fatbelly. They are being particularly vague and I wouldn't entertain it until it has the words "as a full and final settlement" etc.

    Good luck
    If you've nothing decent to say, perhaps you shouldn't say anything.

    £2 savings jar £300:D
    Total credit card debts £1250:mad::mad::mad::mad::mad: - Will I ever learn!!
  • lvmlvm Forumite
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    Do you think this letter in reply would be appropriate?


    I write further to your letter of 22nd February 2011, declining my offer of £500.00 in full and final settlement of the above account and informing me your client would accept £1,238.82 as a partial settlement.

    Unfortunately I do not have such funds available, nor do my parents who will be paying any debt on my behalf.

    I will, however, be in a position to raise a further £500.00 and would therefore be able to increase my offer of settlement to £1000.00.

    Please note that I can only consider any offer of settlement upon written confirmation from you of the following:

    1. You accept the offer of payment as full and final settlement of the account.
    2. The “Current Balance” of the account will be reduced to £0.00.
    3. I will be released from any further liability and you nor any other company will be able pursue me for any further debt in respect of this account.

    Upon written confirmation of the above, I will be in a position to make a payment of £1000.00 in settlement of this debt.
    Mortgage Free Journey!
    Total Purchase Prices - £1,031,000
    Current Values - £1,150,000
    Mortgage(s) March 2019 - £708,102
    Aim for March 2020 - £695,000
    Aim for March 2021 - £680,000
  • fatbellyfatbelly Forumite
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    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
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    lvm wrote: »
    Do you think this letter in reply would be appropriate?

    I think it's a good letter...
  • bottleofredbottleofred Forumite
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    Definitely the way to go with the letter lvm.
    If you've nothing decent to say, perhaps you shouldn't say anything.

    £2 savings jar £300:D
    Total credit card debts £1250:mad::mad::mad::mad::mad: - Will I ever learn!!
  • lvmlvm Forumite
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    Thanks both of you! Shall let you know how it goes! x
    Mortgage Free Journey!
    Total Purchase Prices - £1,031,000
    Current Values - £1,150,000
    Mortgage(s) March 2019 - £708,102
    Aim for March 2020 - £695,000
    Aim for March 2021 - £680,000
This discussion has been closed.