Paying of Debts

cmpwat · 21 March 2011 at 6:08PM

Hi guys.

Just wanted some advice about paying off my debts. I will have enough money to pay off my debts at the end of the week and what I wanted to know is this:

Do I pay off the outstanding amounts or do I negotiate a settlement figure that we are both happy with (providing they accept this is full and final and says so on my credit file)?

I am not going to get into the ins and outs of what I owe and how I can afford to pay it but I have significant debt and they will all be gone.

Any advice would be grateful.

Tixy · 21 March 2011 at 6:16PM

Are you behind with your repayments at all? or have you been behind and been issued with defaults in the past?

If you are not behind with repayments then its very unliley they will agree a reduced settlement figure (though you could always try). If you are or have been behind they may be willing to accept a lower amount.

If you do negotiate reduced settlements make sure you have it in writing from them that the payment is in F&F and neither they nor anyone else will chase you further in relation to this debt before you make the payment to them. You probably also want them to specify in writing whether they agree to mark your credit file as settled or partially settled.

cmpwat · 21 March 2011 at 6:29PM

Thanks Tixy

Sorry, should have stated that most of the debts are with Debt Collection Agencies as I fell behind on payments.

My feelings are that I should be able to 'barter' with them but I also wany my credit file cleared.

Tixy · 21 March 2011 at 6:36PM

If your debts are with DCAs then I guess you'll already have defaults on your credit file? Even once settled these defaults will make it hard for you to get mainstream credit for the remainder of the 6years they show for.

If you do F&Fs and they will only agree to mark as partially settled then these partial settlements will only stay on for the remainder of the 6years since you defaulted. So if your defaults were quite a few years ago the impact of partial settlements won't be on your file for long.
(if that makes sense).

There is a quite a useful factsheet on national debtline website regarding full & final settlements. Might be worth a look.