Final Settlements Quandrie -Advice needed ASAP xx

Littlemee

Hi, i have had a debt management plan with Payplan since 2004, in the first year or so I was paying high amounts off a debt of around £30k each month but in 2007 my circumstances changed and i now only pay £100 off and have £20k remaining. My largest debt was with MBNA and now its with equidebt, I still owe £6k to them, they have just offered me a reduction of 85% leaving only £900 to pay them in 30 days, spoke with my parents and they said if that is the case they will use some pension money and give me 85% of my outstanding debts to pay them all in full and final settlement. I worked this out to be just over £3k, rang payplan to explain they basically told me the creditors would not be interested unless I could pay them 70-80% of my debts so only a 20% reduction. But said i could pay off equidebt and use the rest to pay off some of the other debt.. I told her I couldnt do that as the conditions on the money from mum and dad was in full and final of the debts, she was really unhelpful and said shee could try and get m entered into an IVA if i like, Hoeever, this is not an option for me this far down the line... As most of my defaults have already been removed from my credit file as its over 6yrs since defaulting.... I'm thinking of bypassing payplan, does anyone have any advice to offer.... Thanks

Loubylou2

We are with Payplan although our DMP only started July 2010. I can't understand why Payplan are saying that to you. We had 3 creditors and put offers to them ourselves. One settled with us at 55% but the other two said no. However our Payplan advisor was happy to make the same offer and through them a second creditor has now settled at 55%. Unfortunately the third will not budge:(

For you I would guess that your creditors would be happy to accept considerably lower than 55% as shown by the first offer you had! I would make the offers yourself and don't be pushed too high as from what I have read, most of your debts will have been sold on by now and they would have paid very little for them.

Start much lower than you can afford to give you space for negotiation.
Our remaining debt is still with the origianal creditor and they won't negotiate at all:(

I'm not an expert but some have told me that we could have negotiated lower. However we were happy to settle at 55% as our DMP is relatively new and we want to 'move on' asap.

Good luck:)

Tixy

Hi

I think you might struggle to get all to accept quite that low. But would imagine they would settle for a lot less that 70-80%.
15% from equidebt is low, but would imagine you'd get settlements around 25% from quite a lot.

If you do make your own offers I'd suggest that you look at the national debtline factsheet and template letter.
When you send a letter make it clear that the money is being gifted by a relative and only on the condition that is pays off a debt in full. Say that of they don't accept by x date (2-3weeks) that the funds will be offered to another creditor. That should help to focus them a bit as some can have a tendancy to keep you dangling for a few weeks before saying yes, no or nothing.

Bettingmad

Don't use payplan to do your full & finals, arrange them yourselves theres plenty of helpful people around here to give advise. Mind you you seem to have done brilliantly to get an 85% reduction yourself. The offer needs to be watertight to protect yourself from them or you could find yourself pursued for the remainder of the outstanding debt later down the road.
You only need inform Payplan after you have arranged your settlements in order for them to update their records.