Settlement Figure???

bigt777

Hi all,
I have two credit card debts:

1. MBNA £10k
2. Santander £3k

Got into trouble with payments when our 2nd child was born 2 n half year ago!

Have been making token payments of £1/month for last 2 yrs, recieved letter from MBNA on monday saying outstanding balance has been purchased by Idem Capital Securities Ltd.

My father has offered to help me out if I can obtain F&F settlements which although I would have to pay him back would be a huge weight off my shoulders.

Just wondered if anyone had any ideas on how much to offer? Understand it's a negotiation process so should start low but how low? Have spoken to CCCS so know about only talking by letter.

Also what is best way to sort out my credit rating? Will it take 6yr from agreeing settlement to wipe out defaults? Default notice was sent out bout 18month ago so will the 6yr start from then or will I have defaulted every month with my £1 payments? Does the fact the debt has been sold on affect my credit rating?

Know I have asked alot of questions so any you can help with will be most appreciated. Thanks

fermi

Start low. 20-25% perhaps.

The defaulted account stays on your credit files for 6 years from the initial registration of the default. Once an account is defaulted it is that default date that is important, and the date you settle is irrelevant.

The debt being sold on should not make any difference to your credit record/rating. The default record will normally just be changed over to show the name of the new company instead of MBNA. Everything else would not change.

bigt777

Thanx V much for your reply Fermi,

Has anyone had any experience with having offers of 20% accepted? If so what is best tactic/strategy to use?

fermi

A few people here have managed settlement that though.

My major point though was to START low. If you get refusals and the creditors not budging, then going on to 30-40% is going to look like you are stretching yourself and give them pause for thought that you can't go much higher. Star higher, and the creditor is going to push for more from the start. So start low. Even cheekily low. And negotiate from there.

bigt777

fermi wrote: »

A few people here have managed settlement that though.

My major point though was to START low. If you get refusals and the creditors not budging, then going on to 30-40% is going to look like you are stretching yourself and give them pause for thought that you can't go much higher. Star higher, and the creditor is going to push for more from the start. So start low. Even cheekily low. And negotiate from there.

Obviously alot depends on each individual case, my problems started when I had children and my wife was unable to work especially as she was making good money! Things came to a head when our 2nd child was born about 2 n 1/2 years ago, have been paying £1 a month for roughly 2 yrs. Am thinking an offer of 20% would be better than £1 a month for the forseeable future? Would it be worthwhile explaining my circumstances even saying I may be forced to declare myself bankrupt if they won't accept?

bigt777

Another quick question:

Am looking to switch bank account as mine is with Santander(one of the defaulted CC's is with them).
Will I now only be able to have a basic bank account?

fermi

If explaining your situation makes the point as to why they would be wise to accept, then yes.

With more than one defaulted account, yes, likely that wherever you go it would have to be a basic account.

If you have a debt with Santander and a bank account with them, then get a new account with one not connected to any of your debts ASAP!

bigt777

Thanks again for your quick reply Fermi,

Gonna apply for a new account now! Recieved Experian credit report this morning gonna wait for the others then set about sorting this mess out, sooner I can get settlements the better then can pay my father and become debt free!!

InDeepDebt

I have an MBNA debt - sold to another company, can't remember who. When MBNA sold it on, they offered for me to settle at 35% - unfortunately I couldn't afford. That was on a £10k debt paying £41 a month.

I reckon MBNA will have sold mine on for well under 35%, I reckon yours will have been sold on for even less than mine.

The new debt holder for my MBNA debt keeps offereing me to pay £x and they'll match it. When I do finally have a small lump sum, I am hoping to get the debt settled for under 30% and will probably start at about 15% (a bit cheeky).

Let us know how you get on.

bigt777

Thanks InDeepDept never thought of trying 15% but what the hell, worth a try!!

Opened a CO-OP cashminder account last night over the phone, took about 15mins n was accepted!!

Feel like I'm on the right track to getting sorted just take time but will be worth it.