Negotiating reduced payment in full and final settlement?

in Loans
20 replies 15.7K views
I took out a loan in 2004 for £5000 with the Halifax. After falling behind on payments, the loan was referred to Blair Oliver and Scott who it seems, from reading other posts, are part of the Halifax.

After making a payment of £1000 in 2008, I've been making payments of £70 per month. They have contacted me since to revise the payments upwards but I haven't been able to pay more as I have been a student I was made redundant at the end of '08.
I recently saw my credit report, which showed that payments over the last 36 months have been late (status code 6) even though I have made all the payments agreed with BOS on time since 2008.

I want to settle the debt fully - But I can't afford to pay the full sum. I will still be a student for another year too.:eek: How much is realistic to offer BOS? 30 - 50%? Has anyone successfully reduced their settlement with them? Would an reduced settlement affect my credit rating? Please help!
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Replies

  • Your credit rating is already smashed to bits if you are making reduced payments.

    You aren't making the payments you agreed to in the original agreement so it is right that they record these payments as late.

    You are best advised to request a settlement figure from them, then make them an offer based on that settlement figure.

    I wouldn't expect them to roll over and accept 30-50% but at you can use that as a starting point for negotiations.
    Make sure everything is done in writing though so there is an audit trail.

    Lots of people pay the settlement figure as given over the phone only to be pestered for the remainder afterwards. It's funny how records of the calls go missing so again, make sure it is all in writing.
  • Thanks for the swift reply!

    What I really wanted to get the bottom of was whether a final agreement to settle a reduced debt would hurt my credit rating or simply show up as 'fully satisfied'?

    I must point out that an agreement to pay a reduced amount in the first instance does not necessarily mean that a person's credit rating is "smashed to bits". I have been able to get credit during the past 5 years or so and was also successfully credit checked when I started work at two major banking institutions in 2007 and 2009.

    I will contact BOS in writing to request a settlement sum and then make them an offer on that. I'd be interested to hear other people's experiences of BOS on negotiation figures - thanks!
  • How much is realistic to offer BOS? 30 - 50%?
    If you can afford 50%, why would you offer 30%?
  • chalkie99chalkie99 Forumite
    1.6K Posts
    simona30 wrote: »
    I haven't been able to pay more as I have been a student I was made redundant at the end of '08.

    simona30 wrote: »
    I started work at two major banking institutions in 2007 and 2009.

    Doesn't seem very consistent - Why couldn't you pay in 2009?
  • I got hired in 2007 (credit checked), fired at the end of 2008 and worked for free in 2009 to get work experience (but needed to be credit checked even to get that).

    The truth is I can't afford to pay any of it and will have to borrow off friends/family to clear it. I want to know ranges as there would be no point offering 30% if they wouldn't even sniff at it and I wanna borrow as little as possible to pay off the debt. That's why I'm looking for advice from people who've dealt with BOS to get a better idea of what's possible.
    Got this debt when I was young and I haven't had to deal with any debt collectors in the past. so any insight on dealings with BOS much appreciated....
  • TixyTixy Forumite
    31.5K Posts
    You might be better off posting on the DFW board where its more likely that people will have experience of F&Fs with BOS.

    I would say as the debt hasn't yet been sold on then 30% is likely to be too low. But with any negotiation you need to start by offering low so you can increase a little if they won't accept your first offer.

    Usually they will only agree to mark your file as partially satisfied although you could try negotiating for fully satisfied. However when was the default registered on your credit file? The debt will only show for 6years from that date anyway, so even if they will only mark it as partial then it will only be on there for the remainder of that 6years, however long that may be.

    Have you read the national debtline factsheet on F&Fs - if not thats worth a read.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • If you want to pay less than the full amount owed it is not full and final settlement, it is called a short settlement. As a point of information for you, it is very very unlikely that they would accept an offer anywhere near to 30 to 40 %. As a guide if you have been in difficulty and are now in a position to make a short settlement a guide which is normally acceptable to a loan company, bank etc is 80% of the total owed.
    It will go on your credit file as " paid agreed short settlement " this will effect your credit rating. But if you have been having difficulty in paying anyway and making either reduced or missed payments, your credit file is already shot to pieces anyway so dont worry. It will clear in 6 years.
    How do i know this, In january i made settlemets with all my creditors after being on a dmp for 5 years. For your info Egg refused anything but the whole 100%, Barclays accepted 60%, Lloyds group accepted 80%.
    Hope this helps, probably not what you wanted to hear but as a starting point try 60%, a debt management charity would not offer below this figure as a starting point as it would not be accepted.
  • geoffkygeoffky Forumite
    6.8K Posts
    If you want to pay less than the full amount owed it is not full and final settlement, it is called a short settlement. As a point of information for you, it is very very unlikely that they would accept an offer anywhere near to 30 to 40 %. As a guide if you have been in difficulty and are now in a position to make a short settlement a guide which is normally acceptable to a loan company, bank etc is 80% of the total owed.
    It will go on your credit file as " paid agreed short settlement " this will effect your credit rating. But if you have been having difficulty in paying anyway and making either reduced or missed payments, your credit file is already shot to pieces anyway so dont worry. It will clear in 6 years.
    How do i know this, In january i made settlemets with all my creditors after being on a dmp for 5 years. For your info Egg refused anything but the whole 100%, Barclays accepted 60%, Lloyds group accepted 80%.
    Hope this helps, probably not what you wanted to hear but as a starting point try 60%, a debt management charity would not offer below this figure as a starting point as it would not be accepted.

    WRONG IS SO MANY WAYS.....i settled once at 10% for a lot more than 20k,,,do a search and be educated
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
  • If you want to pay less than the full amount owed it is not full and final settlement, it is called a short settlement. As a point of information for you, it is very very unlikely that they would accept an offer anywhere near to 30 to 40 %. As a guide if you have been in difficulty and are now in a position to make a short settlement a guide which is normally acceptable to a loan company, bank etc is 80% of the total owed.
    It will go on your credit file as " paid agreed short settlement " this will effect your credit rating. But if you have been having difficulty in paying anyway and making either reduced or missed payments, your credit file is already shot to pieces anyway so dont worry. It will clear in 6 years.
    How do i know this, In january i made settlemets with all my creditors after being on a dmp for 5 years. For your info Egg refused anything but the whole 100%, Barclays accepted 60%, Lloyds group accepted 80%.
    Hope this helps, probably not what you wanted to hear but as a starting point try 60%, a debt management charity would not offer below this figure as a starting point as it would not be accepted.

    Completely misleading.... never even heard of short settlement as you call it. Banks will and do settle for anything from as low as 20-30% upwards.

    As with any negotiation, start low and meet around the 40-50%mark. Keep everything in writing and say the offer of F&F is timebound.
    £29,500+ of debt cleared Jul 2010 >> Dec 2011.....
    Now facing same again with £65,000 :mad:
  • simona30 wrote: »
    I took out a loan in 2004 for £5000 with the Halifax. After falling behind on payments, the loan was referred to Blair Oliver and Scott who it seems, from reading other posts, are part of the Halifax.

    After making a payment of £1000 in 2008, I've been making payments of £70 per month. They have contacted me since to revise the payments upwards but I haven't been able to pay more as I have been a student I was made redundant at the end of '08.
    I recently saw my credit report, which showed that payments over the last 36 months have been late (status code 6) even though I have made all the payments agreed with BOS on time since 2008.

    I want to settle the debt fully - But I can't afford to pay the full sum. I will still be a student for another year too.:eek: How much is realistic to offer BOS? 30 - 50%? Has anyone successfully reduced their settlement with them? Would an reduced settlement affect my credit rating? Please help!


    Geoffkky,

    Is completely right go in with a very low offer and explain to them that your financial situation is going to mean this debt will carry on for a long time I would go in in at approx 15-20% and keep negotiating with them the first offer you make they will more than likely come back to you and ask for approx 80% or more of whats owed in total but whatever they get back in one lump sum is better than waiting a course of a few years for and the difference is put in as a tax right off so they are not losing anything !
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