Offer of Settlement Declined?

Stereo

Hi Guys,

Hopefully I've put this in the right section - if not, apologies.

Basically, I had a loan and a credit card with HSBC, which was then passed to DCA and after a time of having it being dealt with by a free Debt Advice Service I decided to do it myself. I set up an offer of payment each month (which was below the payment amount originally set up) and all was well. However, I have since found out that each month those payments are being classed as defaults on my credit file, because they don't meet the original payment amount - even though they have been agreed by the collection agencies.

After finding this out I decided to get them cleared ASAP, take the hit on my credit file and in a few years time hopefully be back in the clear.

I've recently been on the phone to them to see if they will accept a partial settlement of 25% of the total debt (they are Metropolitan Collection Service and DG Solicitors, both owned by HSBC) but after a call back I was told that they would take a payment of 50% to clear one, and then look at another settlement figure on the second...

1) Will these debts remain on my credit file for 6 years from the date of settlement, or from the date of the first default?

2) I only have a set amount of money that can be used to clear these debts at the moment, and this means if I pay the 50% asked for one of them, it still leaves the full amount of the second. Was it unfair for them to refuse my settlement offer?

3) Do you think it would be better in future to make settlement offers like this in writing?

Thanks in advance for any advice offered.

MrsTinks

ALWAYS do offers of settlement in writing! Otherwise you could pay and they would deny all and still chase for the remainder. Any letter from them MUST state that they accept the amount as FULL AND FINAL payment.

Was it unfair of them to state 50%? No... they don't have to accept ANY settlement you offer them... are they likely to accept less than 50%? yes... but only if you stick to your guns and tell them you have £x amount - that's it, no more or they get your reduced payments as that is all you have...

Stereo

Thanks for the info MrsTine.

With regards to the defualts currently listed on my credit file, do I need to wait 6 years for them all to drop off? Is it possible to apply (and be accepted) for a high percentage APR credit card? I only really want to know to be able to pay the balance in full every month, to start re-building my credit.

lilydoodle

You can only be defaulted once for any one debt. The default stays on your CRF for 6 years and then drops off.

Different banks have different lending criteria, so being declined for a card by one, doesn't mean you'll be declined by another. However, common sense dictates if you've got debt, clear it before taking on more.

Stereo

lilydoodle wrote: »

You can only be defaulted once for any one debt. The default stays on your CRF for 6 years and then drops off.

Hi lilydoodle,

Thanks for the advice. I checked my credit file a few months ago and was shocked to find each month's payment to my debts was being shown as a default on my file. From what you're saying, I guess it means that I've defaulted once and that would have been 3-4 years ago.

What happens if it takes longer than 6 years to clear the debt though? Surely the default can't drop off your file if you're still paying at a reduced amount...?

happy_bunny_2

It will drop off your file after 6 years, even if the balance is not paid. You still owe the money though after this time.

MrsTinks

As HappyBunny says Yes default will drop off 6 years after the default happened (always worth checking they have their dates wrong...)
Taking out any additional debt until you have cleared your DMP will be in breach of the agreement and will be frowned on by your creditors... a lot...

awayinchina

Hi, I have had offers declined then I stop all payments to the collectors. Within 4 weeks you get full and final offers for around 50% and you can then negotiate them down from there! Some will move some wont.
the bottomline is if a DCA has purchased the debt its usually for 10-15% of the original value and they can and do take between 20-50% of the debt as final payment. It is just playing the waiting game.
the constant calling and letters is just them trying to pressure you with the threat of court action and by increasing the pressure most people pay the full outstanding balance.
Stay strong and in time you will get a offer. But, also be aware they can apply for a CCJ.

good luck....

Stereo

MrsTine wrote: »

Taking out any additional debt until you have cleared your DMP will be in breach of the agreement and will be frowned on by your creditors... a lot...

MrsTine - I don't have a Debt Management Plan (if thats what you mean by a DMP) - it's just re-negotiated payments with them. I was on a DMP but decided shortly after to end that and deal with it on my own.

awayinchina - thanks for the info, but I don't want to risk the threat of a CCJ. I'm just going to write to them and offer a full and final payment for 30-40% of the debt.