early settlement figures

corinne28

does any one know anything about early settlement figure. Due to some compansation we are going to recieve i am going to pay off most of my debts (credit cards) but heard on the tv that you should ask for this and you should recieve a reduced figure. Many thanks to all who reply.:rotfl:

CLAPTON

in general you can get reduced full and final settlements (F&F) in the following circumstances

a. you have stopped paying the minimum monthly payments and so broken your contract with the creditor

b. they have closed and defaulted your a/cs and so trashed your credit record for 6 years

c. you have probably agreed reduced payments and been paying these for a year or so

d. the debts have been sold off to a DCA

..then the DCA will often agree a F&F, but it will depend upon the specific circumstances (like whether you own property etc.)

Moonbeam

We've paid ours off in full early and didn't receive any special discounts other than refunds on interest and any PPI we had. However, we had also made sure that we never missed any payments on any of them - even when it meant eating beans on toast for a week

DawnW

Might it affect someone's credit record if they paid off less than was actually owed on a card? Even if the cc company would go along with this? I guess that under the sort of circumstances listed above, this would not matter/make any difference. Is the OP getting confused with the case of loans though, where you probably would ask for an early settlement figure if you were going to pay them off early?

jamalfatty

DawnW wrote: »

Might it affect someone's credit record if they paid off less than was actually owed on a card? Even if the cc company would go along with this? I guess that under the sort of circumstances listed above, this would not matter/make any difference. Is the OP getting confused with the case of loans though, where you probably would ask for an early settlement figure if you were going to pay them off early?

Loans are different - the interest is added onto the capital from the outset so if you settle early and get a reduced figure, you are still paying back the full amount the company is entitled to.

If you short settle on a credit card, they will settle the debt, but you have not paid back all you have borrowed so effectively you have defaulted and will trash your credit worthiness for next 6 years. You should only ever short settle a debt as last resort.

exel1966

Pay your debts in FULL. That way it won't affect your future credit, whereas trying to obtain a settlement may well be advantageous in the short term, but foolish in the long term as you will find out when trying to get further finance.
You spent it, you pay it !!