Full and finals question

InDeepDebt

Morning all.

We’ve (the wife and I) been on a self administered DMP for almost two years now. We’re not doing too badly with it – the balances are going down, albeit slowly.

Anyhow, when we started our DMP, we didn’t stop paying into our sharesave with work (naughty, I know). The reason being was that the deal that we got was such a good one that the £9k that we pay in will hopefully be worth £18k when it matures next year. It was up to about £20k for a while but has fallen back to about £15k with all the market turmoil.

So, onto our position. We have about £69k of debt with various creditors. Come next year, we’ll be able to offer some of our creditors full and final settlements. I don’t think that we’ll be able to cover the full £69k – that would mean settlements across the board of around 25%. This brings us onto my question – how much should I offer? This is our position at present.

Barclaycard – with Mercers. No evidence of signed CCA (despite asking). Cards (2) taken out about 1987 – balance about £5.5k. Paying £32 over the two cards. No record of cards on any credit reference agency.

HSBC – about to go to debt collection agency (assume Metropolitan). Been offered a F&F of balance less 35% (can’t afford just now). Balance over two cards of about £10k. For various reasons that I don’t want to disclose – paying £140 per month. No default (yet).

MBNA – with third party DCA (EX & CR). Balance about £9k. Keep getting offered a “you pay £100+ and we’ll match it” offers. Payment £41 per month. Default.

Tesco – with Tesco. No default. Balance about £2k. Paying £20 a month.

Citi – with OPUS. £900 – paying £24. No default

Egg – with Egg. I think there’s a default. Balance about £1200 – paying £5.50

Lloyds – balance £15k. Card taken out about 1988. Not enquired about CCA. Has about £3k of PPI that we may claim back – Lloyds put PPI on after card cloned in 2007 – I don’t think that it is legal. Paying a mere £15 a month.

Halifax – about £15k balance. Paying £110 a month. Halifax keep advising that they will take a reduced settlement – the percentage changes though – it started at 75%
about a year back but last time I spoke they said that it would be 85% (a 15% discount).

Natwest – about £3k – paying £27. No default.

Couple of overdrafts totalling £3k


So, the above makes about £67k – must have paid a couple of thousand off.

Anyhow, based on the above, how much would you suggest wading in with as offers? I was thinking of going in quite low with Lloyds and Barclays. Barclays because I know they haven’t got a CCA. Lloyds I will explain that I intend to reclaim the PPI and will they supply me with a copy of the CCA. I was going to offer both around 30% and see what happens.

Everyone else I was hoping to get about 50% with the exception of MBNA. I was hoping for nearer to 40% for them.

When it comes to offering my full and finals, do I start low and how low is low? Do I start with one creditor and offer really low (say 20%) and advise that if they don’t accept I will go onto the next creditor or do I go in a bit higher and then go back to them if they refuse my initial offer?

Sorry for the long post. I just want to start planning now for next year so that I have an idea of what to expect.

Thanks in advance

Jim

fatbelly

Hi

It's too early now to start negotiations if the money is not available till next year.

You really need to focus their minds by saying 'you can have £x now (well, within 14 days) or continue with a dmp that will take y years to complete'

Settlements at 30% are fairly common (sounds like HSBC are already making noises around that figure) so a starting point of 25% would be ok.

MBNA used to make regular offers at 33% before they sold the debt on. Haven't seen one for a bit now but they seem to be quite open to that route.

But for now I'd concentrate on reclaiming ppi.

InDeepDebt

^^

Yeah, not making the offers yet - will wait until the money is in my little hands first. I'm just trying to get an idea so that I can say that we will likely be debt free by x years. Currently - assuming 100% payback it will take 4 years to be debt free. If I can get some at 40%, say, then I should be able to get the debt free day much closer.

Cheers

Jim

gargrave50

InDeepDebt wrote: »

^^

Yeah, not making the offers yet - will wait until the money is in my little hands first. I'm just trying to get an idea so that I can say that we will likely be debt free by x years. Currently - assuming 100% payback it will take 4 years to be debt free. If I can get some at 40%, say, then I should be able to get the debt free day much closer.

Cheers

Jim

Hey Jim its only advice from another DFW, but I would calculate your debt-free date based on repaying 100%. If nothing else it would be good for the soul, because then all that can happen is it becomes closer if any F&Fs are successful rather than further away.

Your circumstances may have changed by the time your sharesave is withdrawn, and you may have defaults that you don't have now. Personally if the Barclays one isn't on your credit report I would leave them til last. The longer your self-managed DMP goes on the more likely creditors are to accept a low F&F, as they look at short-term gain rather than accepting buttons for 142 years:D.

gargrave50

PS Make sure when you make the offers, the wording of your letter is watertight