Credit File Query

steveweb

I am currently on a DMP due to defaults on a loan and credit cards. My total debt is approx £16K. This is due to circumstances a couple of years ago, however, I am paying the debts back via the Debt Management Plan. I may be due to approx £12K from my late grandmother's estate and would like to use this to pay off my creditors and get out of this mess. If I offer them a pro rata payment for each debt but they state that my credit file will state partial settlement but they won't pursue the debt further or pass it on, does this show on a credit file that the debts are cleared in full or will it say partial settlement (even though it is paid and they won't pursue it) and not be worth the paper its written on. Thank you for any help on this.

Tixy

It depends on what you can get them to agree.

Sometimes a lender will agree to accept a reduced full & final settlement and mark it as satisfied on your credit file (as though you had paid in full).
More often a lender will only agree to mark your file as partially satisfied. But providing you have a written letter from them to say the payment will be in full & final settlement of the debt and keep that letter then your debt will be paid off.

Whether you mind about the partial settlements showing on your file probably depends on your circumstances and future plans.

For an account with a default the whole record of the account (including any partial settlement indicator) will drop off your file 6 years after the default date, so you would only be affected by the partial settlements for the period between when you settle and 6 years after the default.
Given that even if you settle in full the default remains on file for the whole 6 years anyway you might not find the partial settlement marker makes much difference to you.

rizla_king

As long as you have it in writing that you are not liable for what is left over and it wont be sold on then it would be worth the paper it's written on.