Credit Card Settlement Negotiation

AJHOP

Hi,
Having successfully wiped out my debt i am now assisting my cousin. I have trawled the internet and the forums on here but cannot find any advice on negotiating a settlement figure with credit card companies which is less than the amount owed.

My concerns are: What would it be possible to negotiate the debt to, for example would they accept 50 pence in the pound and also would this form of settlement have any detrimental effect on the credit file?

Thanks in advance.

Tixy

Search for full & final settlement and you should find lots of information.

Usually a lender will only agree to a reduced F&F settlement if the debtor is already behind with repayments and had defaulted on the account and a default is already registered with the credit reference agencies. Even then a 50% discount might be too steep. Usually those levels of discounts are only obtained once a debt has been sold on to a third party debt collector.

If you pay a reduced settlement then usually this will be marked on the credit file as a partial settlement and so will tell other lenders/other potential lenders that the debt was not settled in full - and so yes this is likely to give a negative impression.

If you are doing/ offering any reduced settlements to creditors make sure its done in writing and you have it in writing from them that the money will be accepted in full & final settlement of the debt and neither they nor anyone else will chase further for the debt. Get this before any payment is made.

Doubtful_Guest

I've been offered a settlement figure of £850 for a debt of £1150 by Westcot acting for RBS, currently on a reduced payment agreement of £15 per month.
Do you know whether there's any chance of negotiating to have the default notice removed on this if I were to pay the debt in full immediately rather than the reduced amount they've offered to accept ? Is 'punishing' me by leaving the default worth £300 to them ?

I've asked about this on DebtfreeWannabe but without much response.

Doubtful_Guest

What do you think of my proposed letter to send to RBS and Westcot to try and get this sorted out and my default removed ? It's cannabalised from one I found somewhere online, adjusted to fit our circumstances.

[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Dear Sirs,

Account No: XXXXXXXX

I write with reference to previous communication regarding an outstanding balance on the above mentioned account and wish to make an offer to resolve that will suitably please both parties. My only income at present is income support and housing benefit as I am currently a full-time carer for my disabled wife. There is no prospect of my income increasing in the foreseeable future. I have been making regular payments of £15 per month for nearly two years via Westcot credit. However, a family member has kindly offered to assist me in paying off this debt to relieve us of this payment burden. This offer is conditional on the removal of all default notices etc from my credit reference report as outlined below.

I do have an outstanding balance on the account, as you are fully aware much of this is made up of charges. However, my credit reference report indicates a default has been lodged against this account. I was unaware of this and do not believe I have ever received a formal notice of this. Minimal payments will not achieve much and so I therefore write to try and resolve matters amicably, that will suit both of us long term. I propose to offer a full and final payment to settle and close this account to the value of 90% of the original amount, which will take into account and absorb, a lot of the charges that have been added to the account throughout time.

The alternative is for me to place the account formally into dispute and demand s.10 CCA (1974) is brought into play (cease & desist) whilst I reclaim all unlawful charges combined with all costs. I shall then look at the legality of the assignment of debt; the issuance of a default notice and the agreement (prescribed terms) and between them, I may very well be able to counter sue and litigate over unenforceability.

To summarise, I am more than happy to settle as much as 90% of the total amount owing so long as you can agree to, and ensure that, the following actions will be carried out;[/FONT]
[FONT=&quot]a)[/FONT][FONT=&quot] The Default Notice will be removed
b) The Status of the account will change from “Defaulted” to “Settled”
c) The Current Balance will appear as £0.00
d) The Default / Delinquent Balance will be set to £0.00
e) There will be no date in the “Defaulted Date” field (as it will be removed)
f) There will be no date in the “Date Last Delinquent” field on the report
g) This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax & Call Credit[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]If you are happy with my proposal, please respond confirming each of the above points on official letter headed paper, confirming the exact amount owing and I will send a cheque from my relative. Failure to agree will result in more formal papers being sent, by return.

I look forward to your response.

Yours faithfully

[/FONT]

chanz4

Doubtful_Guest wrote: »

What do you think of my proposed letter to send to RBS and Westcot to try and get this sorted out and my default removed ? It's cannabalised from one I found somewhere online, adjusted to fit our circumstances.




[FONT=&quot]Dear Sirs, [/FONT]

[FONT=&quot]Account No: XXXXXXXX [/FONT]

[FONT=&quot]I write with reference to previous communication regarding an outstanding balance on the above mentioned account and wish to make an offer to resolve that will suitably please both parties. My only income at present is income support and housing benefit as I am currently a full-time carer for my disabled wife. There is no prospect of my income increasing in the foreseeable future. I have been making regular payments of £15 per month for nearly two years via Westcot credit. However, a family member has kindly offered to assist me in paying off this debt to relieve us of this payment burden. This offer is conditional on the removal of all default notices etc from my credit reference report as outlined below. [/FONT]

[FONT=&quot]I do have an outstanding balance on the account, as you are fully aware much of this is made up of charges. However, my credit reference report indicates a default has been lodged against this account. I was unaware of this and do not believe I have ever received a formal notice of this. Minimal payments will not achieve much and so I therefore write to try and resolve matters amicably, that will suit both of us long term. I propose to offer a full and final payment to settle and close this account to the value of 90% of the original amount, which will take into account and absorb, a lot of the charges that have been added to the account throughout time. [/FONT]

[FONT=&quot]The alternative is for me to place the account formally into dispute and demand s.10 CCA (1974) is brought into play (cease & desist) whilst I reclaim all unlawful charges combined with all costs. I shall then look at the legality of the assignment of debt; the issuance of a default notice and the agreement (prescribed terms) and between them, I may very well be able to counter sue and litigate over unenforceability. [/FONT]

[FONT=&quot]To summarise, I am more than happy to settle as much as 90% of the total amount owing so long as you can agree to, and ensure that, the following actions will be carried out;[/FONT]
[FONT=&quot]a)[/FONT][FONT=&quot] The Default Notice will be removed [/FONT]
[FONT=&quot]b) The Status of the account will change from “Defaulted” to “Settled” [/FONT]
[FONT=&quot]c) The Current Balance will appear as £0.00 [/FONT]
[FONT=&quot]d) The Default / Delinquent Balance will be set to £0.00 [/FONT]
[FONT=&quot]e) There will be no date in the “Defaulted Date” field (as it will be removed) [/FONT]
[FONT=&quot]f) There will be no date in the “Date Last Delinquent” field on the report [/FONT]
[FONT=&quot]g) This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax & Call Credit[/FONT]


[FONT=&quot]If you are happy with my proposal, please respond confirming each of the above points on official letter headed paper, confirming the exact amount owing and I will send a cheque from my relative. Failure to agree will result in more formal papers being sent, by return.[/FONT]

[FONT=&quot]I look forward to your response.[/FONT]

[FONT=&quot]Yours faithfully[/FONT]

If you sent me that letter, I would tell you to take a jump.

Doubtful_Guest

Any particular reason why you would say that ?

I mean, could you make some constructive criticism about it rather than just being curt and abrupt ?

sharpy2010

chanz4 wrote: »

If you sent me that letter, I would tell you to take a jump.

A very unhelpful comment. I see a lot of letters which look like they are written by a three year old, but the one that you are slating looks pretty professional to me.

Maybe the requests to completely obliterate any bad data from the credit reference agencies are a bit ambitious, but hey its worth a go, and there is NO need to be so rude and/or unhelpful.

coolesticeking

I doubt you will never get them to remove the "Default" marker from your account, it will simply drop off after 6 years.

It's done for a reason to tell other lenders that you have had credit problems - if everyone asked for this to be removed and they did, would be no point in a credit reporting service.

chattychappy

What do you mean by "[FONT=&quot]Failure to agree will result in more formal papers being sent, by return."?

I would either be more specific, or drop this. Don't take it the wrong way, but it has the hallmarks of someone who is try to look legal when they're not.
[/FONT]

Doubtful_Guest

Well, creditors can remove defaults which are disputed. There is a big difference between

a) a default for someone who has tried to avoid paying their debts altogether and not contacted their creditor or paid for years and has no intention of paying.

and

b) someone like me whose debt is largely due to charges after a drop in income and financial hardship, who may or may not have received a default notice, who has contacted their creditor and kept up regular reduced repayment for nearly two years and is offering to repay in full, or nearly so.

I recognise that it may not be granted and I agree that credit reference agencies serve a purpose which would not be met if all defaults were erased for everybody. However, that is not what I'm suggesting. I'm suggesting that actually that default does not reflect the situation accurately and gives an unfair impression of my relationship with my creditor.

Doubtful_Guest

By formal papers, I meant a SAR to identify all the various charges which I could then try to have removed.