Full and Final settlement offers

AngryDog

I have the opportunity to pay some of my debts off.
I am currently paying all of my creditors £5 per month, and if I am honest, I never see me paying this off in my life time, but nor do I want to be paying it forever either.

My debts currently lie with a mixture of the original lender and DCA's.

I cannot afford to pay my debts in full, so I am looking at making offers to pay my debts.

What should I offer as a starting percentage please? I expect them not to accept it, but obviously I do not want to keep going up and up with my offers, so what should I offer as an upper limit please?

I've heard that I should request the CCA first but not sure why?

Thank you!

bottleofred

Hi angrydog,

I think people request the cca to see if the debt is enforceable, but wouldn't be sure, as it isn't something I've ever done. The amount you offer as a full and final settlement depends greatly on how old the debts are. Although no exact science, as a general rule of thumb if the debt is less than 1 year old and with an in house collections department then I'd expect you to have to pay around 75-80% to settle. 2 year old debts with a dca could be 60-70%%, 3 years 40-50% 4 years 25-35% etc. I'd make all offers in writing though and start really low (around 20%) as they can make counteroffers of say 50% and you could then make another counter offer of 25% etc. Keep all correspondence though and don't settle until you have the words "as full and final settlement" in the letters and keep them for a minimum of 6 years in case another dca comes after you. What the dca will accept depends on how they are feeling etc and while they may try to get as much as possible, may be prepared to settle if you have a lump sum. This is just my experience of settling debts, but hopefully you will get better settlement figures.

Good luck

AngryDog

Hi Bottleofred,

Thanks for your reply! all of my debts are just over 1 year old in terms of my not making full payments.
4 are still with the lender, 3 are with their internal dca and 1 with an external dca.

I dont think I'd be able to go to the higher figures, so I would have to start low and stay low.

Thank you for the advice re keeping the letters etc. I hadnt considered that!

bottleofred

Hi Angrydog,

I'd be surprised if they wanted to settle at less than 50%, but if you don't ask, you don't get. Just make sure you have the cash available to settle in the event they agree.

Good luck

Red