Full and final settlement- I dont know what to do!

moneygunny

Hello all,
Like Paulo1paulo, I am a newbie (so please be gentle with me!). I am also in a similar position. I have £8500 to put towards F&F settlements for debts of £14,125. This has come from the sale of my flat. I have 6 creditors, and I have sent out letters (I used the template from the nationaldebtline website) including a table detailing what each creditor will be receiving on a pro rata basis. Cabot have come back to me (over the phone) and have asked that I up my offer by £400. I explained that this would have a knock on effect on my other creditors, but they weren't interested. Instead they said that I would have to send them proof that £8500 was all I got from the sale of my property, if I didn't pay the extra. Can they make me do this?! I could maybe scrabble around to find this extra £400. Is it worth just doing this, just so I can get them out of my life sooner rather than later? I have yet to hear back from any other creditors, and made the mistake of telling Cabot this. Can anyone help?

FireWyrm

paulo1paulo wrote: »

Hi guys, please excuse me as this is my first post...

No problem. It's what most of us are here for.

paulo1paulo wrote: »

Should i attempt the negotiations myself in writting with template letters???

You are in charge of the debt and it's your right to approach your creditors yourself. However, as with most things, there be dragons around, so have your wits about you at all times. Be very careful what you say and to whom.

paulo1paulo wrote: »

Do i inform them of where i have got the funds to settle (is this nessassary) or just request a settlement without explanation???

Dont tell them how much you have, but you could use words like 'come into a small inheritence' etc. Tell them that you are sick/disabled and unlikely to return to work in the forseeable future, that this is causing you difficulty and that you are becomming distressed by the whole thing. You basically want a clean slate. Be clear about your request and what you are prepared to offer. Personally, I'd offer the money to them and they are free to accept or reject it. All your correspondance (you do this all in writing) should have 'Re : Full and Final Settlement of <Debt>' etc prominently on the first line. If they give reference numbers, quote them. Staff read literally hundreds of these every day so you want to get your message across with as little waffle as possible, but still, state your case.

paulo1paulo wrote: »

Has anybody any experience with the creditors below in regards to the percentage they generally settle for???

No, it's down to them and they are free to reject your offer outright. It's a negotiation, treat it like that.

paulo1paulo wrote: »

Also how much would each creditor settle for in my current situation (Percentage/££££)???

No idea. Some settle for as little as 30%, some get nasty and demand the whole pot. You have to be firm and you have to stand your ground. You are making the offer, it's in their interests to accept it since half a loaf is better than none. In short, if they dont accept your offer, they'll never get their money....

paulo1paulo wrote: »

I have read throughout this forum that in some cases people have managed to settle their debts between 30-45%, I really hope that this will be the case for myself and i can put my Uncle's inheritance towards a greater cause... I have stated the nature of the debt and it's origin incase this has any baring on the negotiations????

Every situation is entirely different. My guess is that MBNA will get nasty, but some of the others might be more logical and settle for less than none at all.

paulo1paulo wrote: »

1)Wescot Credit Services/Arrow Global-£4500.00 (Loan), who are acting on behalf of MBNA banking, of whom placed a default on my credit score in Feb 2011, when the debt was forwarded on to the new creditors...

Ok, they are a new debt so havnt had to spend time on the token payment wheel yet. My guess is that they wont settle for less than 100% but you can give it a try.

paulo1paulo wrote: »

2)Moorcroft Debt Recovery Ltd-£250 (Overdraft)0, who are acting on behalf of LLoyds TSB , the debt was forwarded in Dec 2010...

I'd be inclined to pay this lot off completely for £250

paulo1paulo wrote: »

3)BLS Collections-£3000 (Credit Card), who are acting on behalf of Lloyds TSB, the debt was forwarded in Dec 2010...

Lloyds are a bank, so there is possible negotiation potential here. Start with £1000 and see where you get to with it. You may be lucky.

paulo1paulo wrote: »

4)Mercers Debt Collections Ltd-£1250 (Credit Card), who are acting on behalf of Barclaycard, the debt was forwarded in Nov 2010...

I'd be inclined to pay this lot if you can, but you can probably try for between 30 and 50% if you wanted to bargain.

paulo1paulo wrote: »

5)Mercers Debt Collections Ltd-£2750 (Overdraft), who are acting on behalf of Barclaycard, the debt was forwarded in Nov 2010...

Careful here. You have two Barclaycard debts....careful thought, but you might be able to roll both into one....

paulo1paulo wrote: »

6)Opus-£750 (Credit Card), who are acting on behalf of Citi Bank, the debt was forwarded in Dec 2010...

Pay them outright. That's two you can get rid of almost instantly.

paulo1paulo wrote: »

Any advice/help given will be very much appreciated and in return I will recycle all advice given and practised through my own experience, for other's support and help calls... Thank you all sooooo much for your time and effort reading through my situation and for the support i have recieved within this forum, my grattitude is infinate!!!

No problem

FireWyrm

moneygunny wrote: »

I have 6 creditors, and I have sent out letters (I used the template from the nationaldebtline website) including a table detailing what each creditor will be receiving on a pro rata basis. Cabot have come back to me (over the phone) and have asked that I up my offer by £400.

Tell them NO. What you have is what you have. They can wait for the next 20 years or they can have what you are offering. They cant get blood out of a stone.

moneygunny wrote: »

I explained that this would have a knock on effect on my other creditors, but they weren't interested. Instead they said that I would have to send them proof that £8500 was all I got from the sale of my property, if I didn't pay the extra.

Pft. Tell the CSO that you'll send proof if she sends you an itemised printout of her personal finances. Of course not.

moneygunny wrote: »

Can they make me do this?!

Make you...no. Lean on you...yes. Ignore them. Your offer stands.

moneygunny wrote: »

I could maybe scrabble around to find this extra £400. Is it worth just doing this, just so I can get them out of my life sooner rather than later?

Your call. Personally, I'd borrow the extra £400 from family and friends if it meant that the entire plan could be implemented and all creditors paid once and for all, but you dont have to do anything you dont want to.

moneygunny wrote: »

I have yet to hear back from any other creditors, and made the mistake of telling Cabot this. Can anyone help?

No. Like I said above, be very very careful what you say and to whom. It's much safer to do everything in writing.

MrsTinks

NEVER ever tell the creditor exactly how much you have... it leaves you no room for negotiating... If you have £5000 in total tell them you have 3 or 4000 - rarely will they accept the first offer and it gives you wriggle room to negotiate... If necessary tell them the money is a gift/loan from a family member and is a time limited offer on the condition that the loan is marked as settled once and for all (ie Full and Final).

Magi74

Exactly what MrsTine said - the spare cash you've got is your ace in the hole.

I'd also look to see what gives you the best bang for your buck. If creditor x will take £2000 to settle £8000 then it's a better deal that £2k to settle £4k. Bit over simplified I know but hopefully that makes sense!

Find out what it will take to settle them then decide on the best course of action for you - it may even be that you choose to settle the company that constantly write/phone you just to get some piece of mind. Bottom line is it's your money - do the best for you!

Good luck!

paulo1paulo

Thank you guys sooo much for your advice... I've manage to arrange the money to go into an independent private bank, where none of my creditors can trace it!!! I have also set up internet banking, where i will be transfering the funds to a friend... In reciept they have agreed to assumably pay off my creditors by third party... This way it enables me pay off my creditors at a lower rate, global figure of £3500(25-27%)... They can't trace my inheritance account as it's no links to any umberella companies and also the payee is in a 3rd parties name, which applies more pressure on them to accept the first offer as they have no idea how much the 3rd party is willing to loan me.... I do expect negotiations to come back at me (even though i have incorporated a statement in my !!!!!! letter that there isn;t any room), i'm forcasting about an additonal £1000, which would be 28-30% of my original offer & the total sum outstanding... Thanks again for al your support and i will post my conclusions for other to see and use as help...
I just have a couple more question please...
When posting out my !!!!!! settlement, do I send them one at a time to the highest creditor first and then once settled, post the second !!!!!! out, etc or post them all off at the same time in the light that they all might be sorted quicker???
Is it adviceable to state in your letter that \s this payment is from a 3rd party, the offer is only open for a 14 day window and that a reply is required on their decision (accepted or rejected) so that i can take my offer/s to other creditors???
Thanks again guys, you really have give me sooo much help and i truely appreciate all your efforts with replying...
paulo1paulo

FireWyrm

paulo1paulo wrote: »

I do expect negotiations to come back at me (even though i have incorporated a statement in my !!!!!! letter that there isn;t any room)

They will whine and bleat. They will threaten and they may well slap you with defaults left and right, but stick to your guns. Use you disability (you're not lying) and tell them straight that you dont see any increase in your income for the forseeable future. They can wait 20 years to forever for their money, or they can take your offer now.

paulo1paulo wrote: »

I just have a couple more question please...
When posting out my !!!!!! settlement, do I send them one at a time to the highest creditor first and then once settled, post the second !!!!!! out, etc or post them all off at the same time in the light that they all might be sorted quicker???

It's as long as it's broad. As I said, you have two Barclays debts, so I would handle those together myself since they are for the same company, but the rest are seperate. They are all going to kick off as soon as you do this, so be prepared. I'd personally change your mobile number too since you'll be getting harrassed left and right as soon as the letters land.

paulo1paulo wrote: »

Is it adviceable to state in your letter that \s this payment is from a 3rd party, the offer is only open for a 14 day window and that a reply is required on their decision (accepted or rejected) so that i can take my offer/s to other creditors???

Dont back them into a corner. A time window sounds like a threat and they wont take kindly to that. You are likely to get what you want if you are honest, straight and firm. This is what I have, I'd like to give some of it to you, here's my offer. Dont tell them how much the prize pot is exactly, but a ballpark figure is acceptable. From a personal point of view, I did threaten mine slightly since I told them they could take my offer, or I'd give the balance to another creditor instead. It worked for me (I did it for a particularly difficult creditor), but it's a dangerous gamble and entirely at your own risk. Generally, threats get you nowhere but the fear that they might be getting nothing at all is one you can play on slightly. The bottom line is they can slap you with defaults, they can threaten, but after that, short of a court order, there isnt much else they can do about it. If this goes to court, you'd better have your paperwork in order and be able to prove that you were trying, to the best of your ability to meet your obligations and that it is they who are being unreasonable by demanding money you simply dont have and never will have again.

paulo1paulo

Thanks again Firewyrm, i can't stress enough my gratitude for your help... I have compiled a !!!!!! letter to send to my creditors, i have stated that i am our of work and the only income i am in reciept of is goverment benefits.... I also stated that i have no indication of when i will be able to return to work, but have not mentioned my medical status... I haven't incorporated any income & expenditure though!!! Also i haven't mentioned that they will continue to recieve £1 per month for the duration of time that i am out of work... ~I haven't mentioned about any inheritance or amount, just simply how much i am able to get from a third party to settle my debt with them... I have given a timeline of 14days becuase this will help speed up the proccess, but if you belive and advice not to do this then i will amend the letter accordingly... What are the deffinate points to include within a !!!!!! and what should i try to avoid????
paulo1paulo

FireWyrm

Re : Full and Final Settlement Offer : Account <number here>, Amount outstanding : <amount here>

Dear <scum sucking money thieves>

Further to your recent correspondance I am writing you inform you that I have unfortunately been incapacitated recently and as a result of this, I am unable to maintain employment. To this date, I have no clear indication from my doctor as to when I will be fit to work if ever. Following this unfortunate set of circumstances, a close friend has offered to assist me in clearing my affairs prior to prolonged incapacity and to this end, I would like to request your assistance in this matter. I currently have with you an outstanding balance of <insert amount here> which I understand is quite considerable. I am no longer able to service this outstanding debt and thus I wish to offer the amount of <insert here> as a full and final settlement. I understand that this is much less than you would like but it is all I can manage at this time. The alternative to this course of action is that I maintain the current status quo and continue to offer token payments of <amount> per month into the future as long as I am receiving state benefits which at this time appears to be a permanent state of affairs. This token payment will be allotted from my state incompacity payment and I am sure you can understand that this represents a real drop in my standard of living. I deeply regret being forced into this situation but see no other way to satisfy my creditors in any meaningful manner.


I trust that this letter meets with your approval and look forward to an swift and amicable outcome in the near future.

Yours Sincerely
<you>

(Check my spelling)

paulo1paulo

You'rer a diamond, thank you sooo much for your time... I'll get my head down and amend my !!!!!! accordingly... I will let you know their response on reciept... Thanks again Firewyrm!!!
paulo1paulo