Partial settlements after DMP

nothernmonkey_2

Hi guys,

Newbie here, I've been an observer for a long time and thought it was about time I participated and shared the love lol.

Right, here's our story and our quandary:

After running up £45k in personal loans, credit cards, equity release loans, etc - my partner and I decided to give those very people at CCCS a call to set up a DMP. This is something we've stuck to for 18 months and generally speaking, most of the creditors have complied with us (apart from MBNA who we're just plain nasty throughout the period).

Wanting to get ourselves out of this situation in the quickest way possible, we decided to sell our house and live with my parents on a temp basis (very fortunately I might add), and are now in the process of settling our debts with the equity we've gained from the sale.

Of the 11 accounts we have in total, 4 have replied - 2 of which have accepted our offer (around 50% of the amount due), and the other 2 will accept a 70% payment which we're prepared to pay over to be honest. The one thing that they have in common however is that these will be accepted as 'partial settlements' rather than 'full and final'. Furthermore, this will be referenced with the credit reference agencies for 6 years.

What is the difference between 'partial' and 'full'? Should I simply cut my losses and pay up with the amount to save headaches but suffer the possible consequences of being listed as 'partially settled'?

We have no intentions of ever getting unsecured debt again, we've well and truly learned our lesson lol, however we would like to become homeowners again at some point and don't want to go with 'partial' if this is going to have a dramatic effect on our lending capabilities.

I called CCCS and they didn't seem to have a clue what 'partial' actually meant. Experian said it just means other lenders can see that you've settled debt but you didn't settle it 100%... Is this good? Any thoughts people?

Many thanks in advance!

Paul

Crown

Hi and welcome,

Sounds like you are well under way to debt freeness.

My understanding partial/full is that it sits on your credit reference and would affect any type of credit that you applied for within 6 years. If you do not intend on using credit again within this time then it shouldnt be a problem to you.

Having partial settlement listed would not stop you getting a new mortgage but you could expect to pay much more interest.

Be aware that you credit reference is not really for your own use but for lenders to check your wothiness. I do feel that some people think for too much about there credit files especially if you are truelly not going to use it again. The only exception to this is if you work in any job in finance as this could affect your career.

I personally would not accept this offer and would try and negiote it as a FULL & FINAL. I veery much doubt it means anything to the creditor.

These are just my views so dont take it as gospel.

Crown

Here is a template letter I recently posted for someone else. you could try editing it and see if its any help in your circumstances.

---

Dear Sir/Madam

Re: Account No/Reference No:

I write with reference to a our recent correspondence regarding Full and Final Settlement of my account. Your previous letter has still not clarified that you accept this as Full and Final Settlement on this account so please can you signand send a copy of to this letter to confirm.

I confirm that I am that I will be willing to accept your offer to pay £142.50. I want to offer this as an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you or any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability.

I also request that, if accepted, you will mark any entry on a credit reference agency file relating to the above account as "satisfied" in full.

Payment can be made within (put the number of days or weeks within which you will pay) of receiving your written agreement of this offer and method of payment.

I look forward to receiving your reply.

Yours faithfully

(Your signature)

---

We Agree the above Terms and Conditions and confirm that no further action will be taken on receipt of payment of £142.50.

Signed:
Print Name:
Position:

Wescot Credit Services LTD

Flossie

Hi
I am in a similar situation in that I have been offered a settlement figure of 50% by Barclays/ Central Debt Collections, but they won't mark the files as settled in full. I can't see that it makes a difference to them.
Any advice about getting them to agree to 'settled in Full'?
Thank you

Crown

Hi Flossie,

I vey much doubt they they would put settled in full as the entire amount would not have been repaid. you could try for "satisfied in full" what is sort of the same difference in my eyes.

Flossie

Crown
Thank you!! I had never thought about that.
What a difference a word makes. I will try that.
Flossie

nothernmonkey_2

Thanks for the wise words... I contacted both Experian and the CCCS to hear their definition of 'partially settled' and basically it's one step below 'settled in full'. It tells future lenders that you settled your account although you didn't settle 100%, and that's about it.

Some lenders may frown at that, and some may think that it's a responsible way of dealing with debt, but that pretty much sums it up.

As it happens guys, MBNA were extremely helpful (accepted 50% - no questions asked), and Capital One eventually decided to accept my original offer of about 50% of the outstanding balance.

The remaining accounts I've yet to deal with, however there were a couple more I decided to actually call after not receiving and response... Nationwide Loans took 50% over the phone!

Will keep you posted guys! Thanks for all your comments!!

Paul