Help please..info on full and final settlement etc ?

Joeletaxi

Hope someone can help and offer some info on this please ?

Im currently in the process of sorting out my finances which include claiming back some tax and bank charges....but it also includes paying some debts

I have a few debts with debt collection agencies after defaulting with the original lender !

I am wanting to pay various debts back but am interested in the affect on me (if any) if i offer a partial payment as full and final settlement to settle/satisy and clear the debt ?

What differenece does it make to me except the obvious one of me paying less if I only get the debt settled with a partial payment than for the full amount ?

How does this affect my records ? Credit file ? Etc etc ?

What are the pros and cons for paying every penny that i owe or just a partial amount to settle ?

any help and info is greatly appreciated

Thanks

Joeletaxi

Anybody able to help with this ?

DawnW

I am sure someone more knowledgeable will come along in a minute, but my understanding is that if you pay an amount under the total amount owed in 'full and final settlement' it still counts as a default and affects your credit rating accordingly. As I say, someone with more experience may think differently, and it depends also I guess how important to you it is to rebuild your credit rating.

sallyjo_2

I do not know how doing a full and final might affect your credit rating. You can request in your letter that your credit file is updated that the debt has been settled. Even if your credit file remains affected, it will clear in six years. The main thing is that you get the debt paid, and settled as quickly as you can. If the debt has been passed on, the chances are good that they will settle for a considerable discount (eg 75%). It can't hurt to try for as low as you can, then bargain.

I did a f & f with John Lewis Partnership. They still send me statements with zero balances on them, even though I returned my cut up card and asked them to close the account. I am about to do a second with a debt collection agency that bought from MBNA (vultures!) at a vast discount.

My formula,
1. Always pay by cheque and preferably the cheque should come from a third party.
2. DO NOT pay them over the phone by debit card or credit card.
3. Get everything in writing including their written agreement that they will accept the sum as a full and final settlement, and that they or any other agent will not pursue the debt. Do not accept a letter from them that says Without Prejudice on the top.
4. Send all letters recorded delivery, including the third party cheque.
5. Don't be surprised if they try it on and try to claim that its a partial payment and keep going after the remainder of the debt. John Lewis did this to me, I had to complain to their customer services TWICE! to get them to stop.
Good luck. National Debtline has good advice about full and finals including a letter template.