Should I part settle debts?

Deep_In_Debt

owen_money wrote: »

Is it worthless? I did a partial settlement with MBNA, and it was marked as so because that is what is was. I have it in writing that they will not pursue the outstanding amount and that the account is now closed. My credit file shows that it is closed as well, how can they chase a debt on a closed account? Has anyone ever been chased for the so called outstanding amount from a DCA a year or so later? I asked this questions on here a few months ago and no one said that they had been. I've heard a lot of talk about that you would get chased, but it seems no one actually has experianced it, although a lot of people have done partial settlements. In general I think its just conjecture and not fact.

If I am wrong I will come back and say so, but I bet a pound to a pinch I'm not wrong

I have done the same. I had a debt with Sainsbury's on which I made a F&F (40% - good deal and still with Sainsbury's) and they marked my credit file as partially settled and confirmed in writing that the remainder would not be sold on and they wouldn't chase me for the remainder and that they had closed their files. This was in 2008.

I checked my credit file last month for the first time in years and it was :eek: but Sainsburys have updated it to say settled in full - maybe I just got lucky or they made a mistake...

Lensman_2

My comment was that it was worthless unless you have it in writing.

I stand by that.

owen_money

Ohhh, sorry, I read it as it was written,
You mention 'Full and Final settlement process'

Then say

It it completely worthless unless you have it in writing that it is a full settlement though.

Again you mention they have to say its a full settlement, maybe' final settlement' is a better term

I just pointed out in my opinion/experiance you can have a 'partial settlement' and have a satisfactory result.

One thing we all agree about, get it in writing before handing over any cash

Lensman_2

See what you mean...

I didn't think precision was necessary given the OP's stage in the process.

I agree - "final settlement" would have been a better choice of words. A full settlement record on a credit file seems to be unacceptable at the moment.

Thank you for that.

Now - BTT - hopefully the OP is now better informed about the F&F process and what to look out for in terms of pitfalls.

Where do the experts suggest negotiations begin? 20%?

And does anyone have a better letter than the National Debtline at the link Tixy suggested above?

Tixy

In my opinion National detbline letter is a good starting point. Good to also include a one line about the offer being vaild until x date (2-3weeks from when you write), otherwise people find themselves in limbo not knowing whether the creditors might yet respond.

As to an offer- my thoughts is its very difficult to advise without knowing more about the status of the debts, how long they have been in the DMP, if the debts are with original creditors, internal debt collectors, 3rd party debt collectors etc.

Katymillward

Thank you once again everyone, I will keep you posted.

Katymillward

Will part settling accounts affect my credit rating, or will it not make any difference because of the defaults?

Katymillward

Just to also reply to better off 1983, my fees with the debt management company are just over £1,000 for a three year plan, including insurance so if I lose my job my debts are all paid. I took the decision to use a paid company as I didn't know what else to do, I went to CAB for advice but didn't really feel any better off and I just wanted the creditors off my back at the time.

jaycube

It is best for you as soon as the depth will be paid because later interest will added into the amount in the end you have to pay more.

Tixy

Have you only just started your DMP Katy?
(because you mention it will take you 3 years to pay off as it stands, and then mention paying the DMP company a fee for 3years)

If you have only just started your DMP and up until recently were paying your debts just about on time, then the chance of getting reduced full & final settlements accepted at the moment is very slim.

Also do reconsider contacting CCCS or Payplan and switching to a free DMP with them. £1000 is equal to 4months of your payments - meaning you could be debt free a whole 4months earlier if you used a free provider.
Even if you think having some insurance is a good idea for you then you could get that cover for far far less than £1k.