Final Offer's On Debts

MRB1980

Hi,

5 years ago I owed circa £30k to various parties and entered into a payment plan with a well known scheme.

I currently owe circa £15k; £10K of this is still through the payment plan and £5k over two credit cards and one store card which we have kept all payments up for a long period and payed a large sum of interest.

I am hopefully in a position where I might be able to pay the balance on my debts and be debt free within the next month!!

However I am after advice on making offers to my creditors i.e. what sort of offers do they except? if any? and would this futher affetct my credit rating in the future?

If people could please give me their advice on this it would be much appreciated!!

Cheers

Dave.

DarnIt_3

How much do you owe and what was the start balance you owed on each account? From this you many be able to make reasonable offers

Tixy

The £5k that you have kept up payments on are very unlikely to agree to any reduction.

The debts making up the £10k in the DMP - depends on which are with original creditors, with inhouse collection agencies or have been sold to third party collectors.
Also to consider is how long it will take for them to recover the money if you carry on in your DMP. The longer that will take based on current payments the more likely they are to settle at a lower figure.

For any debt that has been defaulted, sold to a third party DCA who isn't charging interest - suggest you start first offer at 20-25% and they may settle around the 30%-40% mark.

Debt with inhouse collectors rarely settle for much less than around 40% (although if your DMP was predicted to last say another 10years or so then they might).

Best advice with any offer is to start low and accept that you may need to go a little higher to get them to agree (or to just carry on with the plan). Make all your offers in writing and set out what you expect in return (this is a useful factsheet - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers ). If you are using a 3rd party company to run your DMP make your offers yourself not through the company.

A lot of creditors will only agree to mark your file as having been paritally satisfied. So other lenders will be able to see this. But if the accounts have defaults on from years ago then this partial satisfied will only stay on for the remainder of the 6years before the default and account drop off your file.