Full and final advice

tjg04

hi guys,

in a bit of a quandry and could use some advice!

I sent a letter off the credit security offering a full and final of about 30% of what I owe them as a full and final.

They called me today and said that they'd take 1100 for a debt of 1500. They've told me there's no room to negotiate in this.

Is this true? Or if I send another letter offering to meet them halfway are they likely to take it?

Thanks in advance for all the awesome advice I know I'll receive from you learned owls!:)

Emmajb

I don't think theres any strict rules saying you cannot make a counter offer, but someone else will have to confirm that, after all the you owe the company X amount and if they are willing to settle for lower only they can say.

However, realistically most creditors will only agree to about 60-70% of the outstanding debt, in this case its about %73, therefore, I doubt they will.

At the end of the day it all falls into A, how much they bought the debt for, and B, if accepting a lower amount now rather than reduce payments will make them more money.

Hope that helps.

Emma

sickasachip13

From what I've read some of these negotiations can be quite protracted with offers and counter offers going back and forth.

I've just been declined for a F&F offer and the creditor said they would only consider it for people in acute financial difficulties (not sure how much more acute it can be than having absolutely no income and a huge debt)!

GeorgeUK

A very general rule of thumb is - if the debt is with:
original creditor, 50%-75%
DCA, 25%-50%

There have been some people that have gone lower, but it will also depend on the amount of time your account has been in default and the amount you are paying monthly compared to the outstanding balance.

Bototm line is if you don't have the money, they can't have it. There's no harm in making a counter offer though if their offer is too high. Just make sure that their written response states either that they agree this is a full and final settlement (not partial or short settlement) or that you are absolved from any further liability. If they don't put that in writing, then don't send payment.

Also be aware that if it is a joint account, then the letter should be from all parties liable and not just the person writing the letter.