Is APEX telling the truth?

Stevev99

HI,

Phoned APEX up to discuss possibly paying off a sum due to them which usually is possible to do via paying an agreed reduced amount.

The chap on the phone said 'you need to consider that if we agree to let you clear the balance as a reduced amount it looks worse on your credit report/score than if you pay the whole amount'

To me that sounds utterly incorrect since as I stated to him it'd state Settled on the credit file anyway regardless of whether it's the whole amount or an amount they agree to take as full settlement.

Anyone have knowledge in this area?

It sounds like they're simply trying to discourage people making reduced offers quite honestly.

Sparklyfairy

For a start,make sure all conversations are in writing. What DCA's agree to on the phone is usually very unreliable. Also, what he is saying can be in fact correct. He's referring to a partial settlement which DCA's tend to trick people into, when an offer is done & completed the debtee's credit file will usually only say "partially settled" which means the dca can come back & chase for the rest & yes, it doesn't look as good as "fully settled" on a credit file.What you must do is make your offers as a FULL & FINAL offer & make reference in your letter that under no circumstances shall your offer be construed as a "partial settlement" HTH, SF

fermi

If they accept less than the full amount in a settlement, they are entitled to mark your credit files with a "partial settlement" flag rather than just settled.

Which would look somewhat worse on your credit record.

So yes, they are actually telling the truth to some degree.

However, if your credit record is already shot, then it's not really going to make much difference.

Obviously the debt collector will put it in whatever way is most likely to make you pay in full.

bargainbetty

You must obtain a written agreement that the debt will be marked as fully settled, and the payment you send is in full and final settlement. If they agree to that, then they have to mark it fully settled, or you can dispute it and they gt in trouble.

If you do not have that agreement, then they can mark it partially settled and it might come back to haunt you later. It will also affect your report, as he indicated.

Everything must be in writing - stop talking to them on the phone, send them a letter instead.

Good luck x

National_Debtline

Hi folks

We would like to clarify a couple of the issues raised here.

"Settled" means settled, whether this has been done partially or fully. The distinction between the two terms relates not to the recoverability of any outstanding amount (see below) but to how the debtor's credit rating is affected. If a debt is marked as "fully settled", it will have a more positive impact on your credit file than one marked as partially settled.

Any outstanding amount written off as part of the settlement can not and should not be pursued at any later stage - this is why we always insist that you agree such settlements in writing . There is archaic case law relating to cases of "estoppel" which can be dredged up if necessary. Estoppel essentialy refers to the principle that if you act in a certain way based on an undertaking given by the other party, you can rely on that undertaking in the event of any later dispute.

fermi

bargainbetty wrote: »

You must obtain a written agreement that the debt will be marked as fully settled, and the payment you send is in full and final settlement. If they agree to that, then they have to mark it fully settled, or you can dispute it and they gt in trouble.

If you do not have that agreement, then they can mark it partially settled and it might come back to haunt you later. It will also affect your report, as he indicated.

Everything must be in writing - stop talking to them on the phone, send them a letter instead.

Good luck x

Not quite true.

They are allowed under ICO guidelines to use a partial settlement marker on your credit file even if the actual settlement is considered a F&F.

Just beacuase they mark your credit file as a partial setlement, that doesn't mean that they can come back and claim the rest at a later date.

What you agree regards liability for the remainder, and how your credit files are marked are two entirely separate things.

DVardysShadow

fermi wrote: »

Not quite true.

They are allowed under ICO guidelines to use a partial settlement marker on your credit file even if the actual settlement is considered a F&F.

Just beacuase they mark your credit file as a partial setlement, that doesn't mean that they can come back and claim the rest at a later date.

What you agree regards liability for the remainder, and how your credit files are marked are two entirely separate things.

While I agree that what is agreed about the remainder and how the credit files are marked are 2 separate things, I think breadline betty's advice is consistent, provided it is understood that anything may or may not be negotiated and you need to negotiate on both points. And get the agreement recorded in writing.

fermi

I disagree.

It quite clearly implies that marking as a partial settlement means it "could come back to haunt you".

Or that if you do a settlement, then "You must obtain a written agreement that the debt will be marked as fully settled".

Both give entirely the wrong impression, whether intended or not.

fermi

For a settlement you need confirmation in writing before you part with any money.

On liability.

- The payment represents a settlement of the account. "Full and final" is preferable wording, but just settlement or short settlement is acceptable, as long as they agree to the next point.

- The lender agrees to write off your liability for the remainder, and it will not be sold on or otherwise pursued.

Re: Credit reference files.

- The credit reference files must be marked to show that the account has been settled in some way.

(Obviously a plain "settled" would be best for you, but ICO guidance concedes that a partial settlement marker is acceptable and accurate. For anyone checking your report this distinguishes between an account where the creditor accepted less than the full amount in settlement, and one where they were paid in full. A partial settlement marker does not mean you are still liable for the remainder.)

- The outstanding balance should be removed/zeroed to indicate that no more money is expected to be paid on the account.

rising_from_the_ashes

fermi wrote: »

(Obviously a plain "settled" would be best for you, but ICO guidance concedes that a partial settlement marker is acceptable and accurate. For anyone checking your report this distinguishes between an account where the creditor accepted less than the full amount in settlement, and one where they were paid in full. A partial settlement marker does not mean you are still liable for the remainder.)

- The outstanding balance should be removed/zeroed to indicate that no more money is expected to be paid on the account.

I had several defaults settled - there were a couple of "silly" ones for smallish amounts which were "settled in full" and marked as such, but also a couple of larger ones, which weren't and showed as "part settled" but with the £0 outstanding balance.....

DVardysShadow

fermi wrote: »

I disagree.

1. It quite clearly implies that marking as a partial settlement means it "could come back to haunt you".
2. Or that if you do a settlement, then "You must obtain a written agreement that the debt will be marked as fully settled".

Both give entirely the wrong impression, whether intended or not.

on 1, I understand bb not to mean that the creditor will come back for another go, rather to be pointing out that people checking the credit record later eg for a mortgage may take a sterner view against a settlement marked as partial rather than unconditionally settled - hence to include this point in the negotiation.

on 2, again, I think that the point is to get the settlement agreed in writing once it is negotiated.