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Using redundancy payment to pay off credit cards - any room to negotiate?

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I'm being made redundant at the end of next week. :(

I need my redundancy payment to last me as long as it possibly can, because who knows what the future may hold.

It could pay off over 50% of my outstanding credit card debt, and I certainly intend on paying off some of the eye-watering APR accounts.

All of the payments have always been up to date, so there are no warning signals currently with any of the lenders.

Has anyone any experience of negotiating a lower settlement figure with their credit card companies (ideally without affecting their credit score). I'd hope that, if I explain the situation, some companies might be willing to negotiate a lower pay-off knowing the security of the instant payment, rather than the increased risk of me trying to continue payments while out of work.

Anyone any ideas, please?

Comments

  • HalfPint
    HalfPint Posts: 646 Forumite
    Part of the Furniture Combo Breaker
    I don't really know the answer tbh...I did full and final settlements with all my creditors, but I was in arrears and paid each one 80% of the balance due.

    "If you don't ask, you don't get".....contact them and ask for settlement figures, then divvy up the amount of money you have on a pro rata basis, then write to them offering that amount as full and final settlement...what's the worst they can do? say no, that's all.

    HP x

    Edit: I suspect if they do accept your offer, they will insist you have to close the account....not a bad thing imho.
    DEBT FREE DATE: 05/02/2015!

    Those things in life that we find the hardest to do, are the things we are the most thankful we did.
  • In a similar situation myself - To be honest they are playing hardball. There are lots of stories of people getting 50% discounts etc but that seems to be elusive to the person who has kept up payments. It's the old adage that if you do things properly, you're screwed... but if you screw the system you're quids in.

    I have 2 Creditors, the first looks like they will accept 20% although it's not been easy. 2 months of letters and around 6 hours on the phone speaking to over 12 people. I hope to have that one tied up next week.

    The 2nd won't even come to the table - I have an impecable record so why would they think they won't get their dosh. I don't really have many bargaining chips at the moment. Ironically I will probably be better off if I leave it for 2/3 months, don't make any payments and then tell them I would like to settle. It would give me some leeway to negotiate and the blot of the credit record... it will be worth the potential £4k saving as far as I'm concerned.
  • whitewing
    whitewing Posts: 11,852 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    This may be bad advice, but wouldn't you be better to keep your redundancy payment until you have a new job, and then once you have a new contract, then deal with the negotiating? I think some of the free debt charities will be able to advise you on your particular circumstances.
    :heartsmil When you find people who not only tolerate your quirks but celebrate them with glad cries of "Me too!" be sure to cherish them. Because these weirdos are your true family.
  • dwaine
    dwaine Posts: 13 Forumite
    Thanks for the replies all - seems like it's going to be a bit of a challenge, but for the sake of a phone call, there's no harm in giving it a go.

    (I'm on a roll - managed to reduce some insurance by £240 a year, and my TV & Broadband supplier to knock a tenner off a month too - just in two calls this morning).

    Will keep as much of the redundancy free as I can, but know there are limits on how many assets you can have for JSA - so I'll pay enough debt off to bring me below that threshold. :)

    Thanks again.
  • agrinnall
    agrinnall Posts: 23,344 Forumite
    10,000 Posts Combo Breaker
    If you pay off debt more quickly than necessary to reduce your assets below the limit for benefit eligibility you may fall foul of the rules on deprivation of assets and be treated as if you still had the money. There are really two questions here, which would be better asked on other boards: can I offer a lower settlement figure (probably the Debt Free Wannabe board), and should I pay it off at all (Benefits board)?
  • dtaylor84
    dtaylor84 Posts: 648 Forumite
    Part of the Furniture Combo Breaker
    All I can add to the advice above is that any agreement to pay less than you owe will affect your credit score. But it's unlikely anyone will agree to a reduced settlement figure until you're in default anyway - they have no reason to.
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