Early Settlement Loan Offer

anrutpea

Hi everyone

I'm sure this will have been covered elsewher so apolgies if I am duplicating by asking this question.

My partner has a DMP with payplan for a barclaycard and Egg loan debt (Egg has now been taken over by Barclays)

A few days ago my partner received a letter from Barclays advising they would like to offer an early resettlement on his Barclaycard. The letter made no mention of the Egg loan nor did it offer an idea of the settlement figure they are looking for.

The amount outstanding is £2500 approx and the offer was made as he has made regular payments on time for the last 3 years.

My partner rang Barclays customer service who weren't very helpful, he was transferred a few times and came off the phone saying it's not good news. They offered 10% off the balance as a settlement amount but that was off the amount of both the Egg Loan and Barclaycard.

I think the amount for both card and loan is around £4500.

Obviously we would have paid the balance outright if we had that kind of money but after trying so hard to pay as much off as possible and getting the carrot dangled in front of us we are a bit disappointed.

my partner is due about £500 back pay next month, I am due about £200 backpay, it's my birthday in June and my parents give me £300 and a company is buying me out of some shares and has offered £850 settlement. Alltogether that's £1850 we will have by mid July as a windfall.

Is it worth writing to Barclays with an offer? or should we accept that 10% is a no go, keep on with the monthly payements and put the money into an ISA?

Any advice would be great thanks

Tixy

Hi

If a creditor has offered you a settlement once - then you can be fairly certain they will accept a similar (or better) settlement again in the future. So first don't 'panic' and assume this is a one time only offer.

If you get all the money you expect to receive he could certainly try making a full & final settlement offer to them for an amount you can afford . There is always a chance they'll accept and if they say no you can carry on trying to add a bit to your savings and carry on with the DMP a little longer and then try again a bit further on. Your partner might want to make it clear in the letter that this offer is only possible as its money that is being offered to him by a family member on the condition that it clears the debts in full.

Are these 2 the only debts in the DMP? If so the other option is to discuss with Payplan and let them make the offer on his behalf.

anrutpea

Thanks for your response.

Yes these are the only 2 debtors in his payplan account. He must have had over £20K debt when he started paying off and is now down to £4500.

I have read on some of the threads here that some companies do settle around 30-40% of the outstanding debt so maybe I got my hopes up a bit as payplan does eat up about £350 of our wages a month.

anrutpea

Just an update guys. My OH was contacted last week and was offered a 15% f&f settlement figure.

It's so frustrating - why do they ring and dangle a carrot - surely if we had that 15% less of the balance we'd just pay it. I'd rather they didn't ring than offer 10-15% and not negotiate on the settlement figure.

OH must owe £3100 ish now and we'd struggle to scrape together 50% of that in a lump sum to pay off.

I thought the company was payplan but it's not it's a debt recovery company that Barclaycard sold his debts onto beginning with 'A' but can't remember the name.

Do you think by December time when his debt is down to about £2k they might be more open to a 40-50% f&f settlement?

I have just started to work from home fore Lionbridge and have got a promotion in my job starting next week so if I save money between now and December I may be able to scrape enough together to offer a final settlement as a lump sum.

Any other suggestions? His debt has been an albatross around my neck for 4 years, everything has been on hold while we pay this off

SusieT

Some places will take 30% of the balance as a settlement or if you really push even less as a settlement, but you need to be in a pretty dire place for that to happen. I have had offers of paying 60% but like you I dont have that sort of money although I did get a very low offer on one and a friend payed it and I am nearly paid them back. I would say put the money away but tell them that if they get to the point where they will accept x% or £x as a settlement then please let you know. If you make x a little bit lower than you are able to pay there is room to negotiate and its also good because they know that you want to pay it back but just cannot afford to. Good luck with it.