Card payment offers?

debtfreeby50

Apologies if this has been explored to death already.
Myself and my wife are in a DMP with Stepchange and have been since March 2009. We have the following outstanding debts:

Egg = 4,950
Egg = 4,050
Lloyds = 11,233
RSB Mint = 4,755
HSBC = 2,230
Amex = 3,625
Barclaycard = 5,045

Total approx £36k
At the rate we are going we'll be debt free by 2044!
We know where we went wrong and have been trying to chip away as best we can and have cleared over £8k since we started.

We are currently looking at the option of making offers to companies. I have heard of people settling with Egg/Cabot at 30%, RBS/Mint @ 40% and Lloyds(ggrr) at 70%.

Are these realistic settlement figures, and does anyone have experience of the other companies accepting offers?

Thanks

FireWyrm

It really depends on the creditor. I once obtained a settlement from HMRC for 10% of the outstanding figure. Usually, you would expect HMRC to be less than helpful and understanding, but in my case, they suprised the hell out of me. Barclays on the other hand have been known to not only reject any type of settlement and demand 100% total satisfaction, but to continue to pile on default charges and interest in the meantime.

Personally, I'd treat it like a normal negotiation. Start with your lowest possible figure (cheeky though that may be) and slowly raise it to nearer what they want. You'll probably arrive at a mutually agreed figure with some perseverance. Be sure to point out to them that basically, they wont get their money until you are well into old age and that a F&F is probably their best and only chance of getting even something out of you, otherwise, you'll just continue with the status quo forever.

debtfreeby50

Thanks FireWyrm,

i'm self employed and just last week had my self assessment debt transferred to a 3rd party - so useful to know they may accept such a low offer.

FireWyrm

debtfreeby50 wrote: »

Thanks FireWyrm,

i'm self employed and just last week had my self assessment debt transferred to a 3rd party - so useful to know they may accept such a low offer.

Unfortunately, like I said, the surprised me. In my case, I was acting on behalf of an invalid who could not (literally) speak for themselves. There was no realistic prospect of HMRC ever getting their money and I think they knew that which was reflected in the F&F. Essentially, I took out a loan to cover it just to get them off our backs, but your circumstances may be entirely different or you get a collector who has had a bad day...no one knows for sure. Sorry. The operative words here are 'may' and 'might'.

National_Debtline

Hi there

In theory, you should determine the size of your settlement "pot" (and start at the low end of this as per FW's advice) and then make your offers on a pro-rata basis across all creditors. In practice, you'll find some holding out for more than others. These various debts will be at different stages of the respective lenders' collection processes, and so their thresholds for accepting settlement offers will change over time.

You should always stress the value of a bird in the hand over two in the bush. E.g. say you owe Bank X £5K, and normally repay @£30 per month, but can now offer a lump sum of £1,800 with some help from friends and family. You could point out that it would take you 5 more years at your current rate of repayments to give them what they are being offered right now. That will bend their ear - after all, they can't be 100% sure that you will be able to maintain your repayments over the longer term.

I would recommend reading our Full & Final offers fact sheet:

https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx

Regards

Dennis @NDL

debtfreeby50

FireWyrm wrote: »

The operative words here are 'may' and 'might'.

I understand that

And thanks National Debtline - having spent the past week in the doldrums worrying about debt and losing sleep i'm feeling a good bit better about things having spent time on here reading the forums and sharing other people's stories.