Offer to pay off my debt

BlackAdder_2

Hi all, sorry I know there must be a thread about this but I can't find it. Any advice or links would be appreciated, thanks all

I've been in debt for a while now but had been left alone because of severe depression and a few years ago a suicide attempt. I've got myself together again, back in work, but have now received a a letter regarding a £3000 debt, stating that they would offer me a 'substantial discount' on my debt if I could pay it off in a lump sum.

What sort of discount would I expect to receive? Or would I be better off making a monthly payment even if it takes a few years to pay off?

Paully232000

i would put this in the 'debt free wannabe' board and you may get more response.

planteria

all i would advise is: negotiate hard. there is no harm in making offers that are dismissed. creditors can decide that 'a bird in the hand' is better than waiting for you to chip away at the debt for a long time, and potentially never fully repay.

rageagainstessays

I've never been in debt, but I'd start by offering to pay back the lump sum of value of the debt (without interest) + 3% compounded to the number of years.
So say if it was £5000 and you'd had the debt 5 years,
Try £5000x1.03^5= £5796 as this accounts for upper bound of the average inflation figure so they won't have lost money proportionately- infact they'll see it as a slight gain.

This is probably a stupid idea but I'd try anyway.

brendon

If a debt collection agency have bought your £3,000 debt, they will have probably paid about £300 for it. Bear that in mind -- you are in a position to negotiate very hard.

forgotmyname

Does sam work for a debt company?

Is it the original creditor or passed on or sold onto debt collectors?

The debt collection companies will have paid pennies in the £ for the debt. So an offer of 25% maybe accepted.

Start off at less than that. Settle on about 30%. So your £3000 debt will be sorted for £1000.

Never agree to anything unless you get it in writing. Play on the fact you had mental health issues and must ask mummy before you agree to anything.

Do not promise them anything, Same again say you need to ask mummy to lend you the money.

jamesa007

Don't commit to an offer first time round even if it's the best deal on the table. Make sure you can pay the debt back and don't put yourself under any stress or unnecessary pressure because you got a letter. Also make sure you get this all in writing before handing over card details to pay over the phone. Positive thoughts and good luck to you in resolving this one. Keep us posted on the developments.

27col

Ask them what the "substantial discount" might be and then work down from there with a counter offer.
Alternatively make them a low offer first and work up from there.

rageagainstessays

forgotmyname wrote: »

Does sam work for a debt company?

Haha no, it's just logical. its the same way one works out the interest that they will gain from savings. The bank make money in 'nominal' terms, whereas we work in real terms. So they look as if they've made money in nominal terms on their balance sheets when infact its you thats made money, because if one assumes that the average inflation rate throughout the time of the debt was 3% then you have only paid in 'real' terms what you borrowed.
Then just change the value after 1.0x to like 1.05 (then thats a 5% profit for them).

planteria

"I've never been in debt, but I'd start by offering to pay back the lump sum of value of the debt (without interest) + 3% compounded to the number of years."

i am no expert either. but i know for sure that much better deals than that can be done. some creditors can be persuaded accept significantly less than the original debt.

good luck.

planteria

"If a debt collection agency have bought your £3,000 debt, they will have probably paid about £300 for it. Bear that in mind -- you are in a position to negotiate very hard."

great advice.