full and final help

Jack1984

Hi have read various posts on here and was wondering if anyone could please offer me some advice.

I am currently enrolled in a DMP with the CCCS. I am paying £390 a month towards a total debt of £18200. This has now been running since November ( 7months )and i have been making my reduced payments to all my creditors so far.

Just this month i have had various unexpected expenses and have been unable to meet my normal payment to the CCCS, i have informed all my creditors and the CCCS and most have allowed me a months holiday aslong as i continue with my agreed reduced payments next month. however im also scared i may not be able to afford next months payment too.

My brother has just recently agreed to lend me around £10000 and i am going to look to offer full and final settlements to all my creditors on a pro rata basis.

my questions are what percentage should i start at? Should i phone or send letters? and if i am unable to make next months payments will this help or hinder my offers chance of success. i.e should i make the offer before or after next months payment due date.

Please any help or advice would be hugely welcome as the situation is v stressful.

creditors:

Natwest £10233
barclaycard £3066
American Express £1108
Hitachi Capital £959
Egg £1653
Rbs Credit Card £1177

Jack

FireWyrm

I'm suprised no one has offered any advice. My experience, for what it is worth is that you should initially telephone and get some sort of agreement and then, put that in writing with the header "Full and Final Settlement" - sent via Special Delivery/Signed For. I would put in the letter the terms of the agreement, who you spoke to and what time as well as the figure agreed. The words 'Full and Final' are legal speak and dont forget this as it is important.

In terms of an offer, it's always hard to guess. Never tell them how much lump sum you have because they'll all want it for themselves. Approach this as a negotiation, so, something along the lines of "I've come into some money and I want to make a final settlement and I'm proposing 40%". Know your figures first, so you know your bargaining position. The idea is to get as much for as little as possible and if you can kill all 6 of them in one go, so much the better. Which has the highest interest? Make sure you pay them off no matter what, even if you end up having to continue with the lowest rate. They cant get blood out of a stone, so be polite but firm, this is what you have, this is what you are offering and this is how it will be as there is no more money after this. They want to get shot of you because you're not paying them any interest and so they're not making very much from you. The idea is to give them to believe that they are getting the lions share, but try to be fair and equitable in reality so there are no accusations later.

Being unable to make payments (if it will genuinely cause hardship) can work in your favour. You genuinely cannot cope any longer, you are at your wits end and you just want to deal with this before it gets worse ya da ya da ya. They will be alert for signs of excessive stress and if you appear to be at the end of your rope (without over doing it), they dont want to be accused of pushing you any further. Debts are debts, but we dont hang people for them anymore and they are aware that although you owe them, they dont own you. Point out that you can continue like this, but it is likely to cause significant hardship (and be able to prove it), but, if they take your settlement figure, everyone will be happy because half a loaf is better than no loaf at all. They'll twist, squirm and bleat, but at the end of the day, you're offering a better deal than the one they have. Remember, the CSO you will talk to deals with this kind of enquiry day in day out. They have a jaundiced view (not fair I know) of 'debtors' and so you need to get them onside first. Dont rant and rave, never swear and for gods sake, keep calm. The CSO will be more prepared to help you and negotiate if you dont annoy them.

Once the negotiations are over, write it down, get a written acknowledgement of any money paid and this letter also should have the words 'full and final settlement'. Keep the letters for future reference (I still have mine 10 years on) and what ever you do, never do this again.

Good luck...let us know how you get on

lvm

FireWyrm wrote: »

... so, something along the lines of "I've come into some money and I want to make a final settlement and I'm proposing 40%". ...

NEVER say this to them - if they know you have money, they will demand it. The whole point of being on a DMP is that you don't have the money to meet minimum payments with.

If offering settlements say your parents or friend will settle your debt if a full & final settlement is agreed upon - and even get the payment paid by them rather than transferred to you first.

It looks like all your debts are with the original creditors which will mean a bit more of a struggle to get a decent settlement figure (I've had some debts for 3 years and they won't budge on a 20% discount...some on the other hand came straight in at 50%).

FireWyrm

lvm wrote: »

NEVER say this to them - if they know you have money, they will demand it. The whole point of being on a DMP is that you don't have the money to meet minimum payments with.

Yes, but now you do. People come into money all the time. You dont have to tell them where it came from or how much it really is. Just that you have some to give them and that's all there is.

lvm wrote: »

If offering settlements say your parents or friend will settle your debt if a full & final settlement is agreed upon - and even get the payment paid by them rather than transferred to you first.

I never had any family who could do this and any way, I always found people were willing to help if you were (relatively) honest. If they even suspect a lie, you will cause more trouble for yourself. If you can, go down the friend route, but it's not a deal breaker either way. Never tell them how much you have though. It depends how much brass neck you have and what you think you can get away with. I told my creditors that there was a finite pot of money and that I was offering them a share of it. They all agreed to take my settlement on the basis that I was up front.

lvm wrote: »

It looks like all your debts are with the original creditors which will mean a bit more of a struggle to get a decent settlement figure (I've had some debts for 3 years and they won't budge on a 20% discount...some on the other hand came straight in at 50%).

Exactly my point, you never can tell. I got the Tax office to accept 50% once, much to my utter astonishment, but PayDay loans will demand it all. Most banks are pretty decent and you could start with 30 or 40 as an initial punt. Plead poverty, you really are at the end of your tether, you cant cope anymore, it's too hard, you just want to do what is right, but there is only so much money to do it with....if you were a millionaire, you'd pay them all in a heartbeat, but life isnt like that. The problem here is that we cant do the phone calls for you, we cant hear the inflection in the CSO's voice and we cant judge the tone of the conversation. All of this is very much as it happens right there and right then. My initial advice stands, be polite but firm, be genuine but not gushing. Dont cry, dont swear and dont upset the CSO by bad or embarrasing behaviour. You're an adult, in charge of your life and you're trying to do the right thing which no-one can fault you for.