Typical settlement % for Credit Card debt

cj84

Hi guys,

Just wandered if those who have been through the process of offers of settlement etc might be able to share there experience in terms of percentages offered/written off?

I've spent 7 months on benefits after a bad car crash and now in a position where i could potentially clear my debts if i can negotiate a little discount that is! Just wandered what the precedent is in terms of offers etc? is 50% laughable?

In particular i am referring to MBNA & Lloyds

Any help appreciated . . .

YorkshireBoy

Have you so far been meeting the minimum payments, or are there late/missed payments on the account?

stephane_2

If you have not defaulted on those accounts....then you have no chance of a settlement figure....

jonesMUFCforever

Will you be getting any compensation for your injuries?

cj84

I should have been more clear, I have been paying these through a Debt Management Plan for nearly 5 years now and was all set to make offers just as my accident happened, so I'm 7 months on and looking to effect clearing these long standing debts

Tixy

There is no typical %, even after default, even when on a DMP. Sometimes some people manage to get a creditor to agree to 20%, sometimes people cannot get an 80% offer accepted.

Are the debts with original creditor? in house debtor collector? or third party debt collector?

How much they will accept will depend on how much you are paying currently/how long it will take to pay off the debt at current rates. Whether they think you have any other assets so stand a chance of recovering the full amount (eg for a homeowner they may consider trying to obtain a charging ordder). It can also vary depending in whether the case worker has any target they are hoping to meet - to earn bonuses.

Best thing is to make your offer in writing, and start with a lowish offer, so that if they come back with a counter-offer you can negotiate.

somethingcorporate

I am helping my BIL settle his DMP with 2 years left on it.

Speaking to Payplan (who administer his DMP) suggest a 30% reduction is not unrealistic and having a google it shows that up to 50% may be possible depending on the values, the creditor and how long there is to go.

They are currently negotiating with the creditors and will let us know whether £3k will settle his £4.3k DMP.

forgotmyname

Depends on your financial situation.

Are you still paying the original credit company? Or have they been sold on?

If your paying them a small amount then they may live with that. If your paying so little your costing them money they may sell it on or accept a figure to get rid of you.

If there is a hope of them getting the money back eventually then they may just hold out.

The debt management companies pay very little for the debts. 10p in the £ i have read.
So even a 20% offer makes them money.

cj84

Cheers guys just by calling and laying it on thick i have got two Barclays & Virgin (MBNA now with Link Financial) to accept 50% offers and Lloyds CC and loan debts to accept 65%

My only grief now is with 1st Credit for a loan i had through Money Shop but they have only offered my 75% of a figure which is double the original debt! as posted separately in the Loans section

Ultimatley i started the day £7400 under and now provided i can meet the settlements im sat at £4200!

Cheers for your help and advice

izools

DO NOT SEND THEM A PENNY UNTIL THEY HAVE CONFIRMED ACCEPTANCE IN WRITING!!!

So often we have posts here from people who have been told a full and final settlement offer has been accepted, but the agent on the phone made no record of this on the account and there was nothing written down to say the debt was settled, so the borrower was chased for the remaining debt and couldn't do anything about it.

Don't listen to any codswallop about "this is a one time offer you must pay now", don't part with anything until you have a signed letter from them confirming the amount they are prepared to F&FS for.