My F&F demands

mattymoo2014

Hello to all –!newbie here

I and my wife have £32,000 debt and a further £17,000 owed to friends.

I am thinking about F&F settlements and have drafted a letter to the companies in question.

Based on a template here I am asking the company to guarantee some demands. Please could someone let me know if they're realistic? Or if I've forgotten anything?

1) The default notice will be removed;
2) The status of the account will be changed from “Defaulted” to “Settled”;
3) The Current Balance will appear as £0.00;
4) The Default / Delinquent Balance will be set to £0.00;
5) There will be no date in the “Defaulted Date” field (as it will be removed);
6) There will be no date in the “Date Last Delinquent” field on the report; and
7) This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax and Call Credit.

Many thanks

FireWyrm

mattymoo2014 wrote: »

1) The default notice will be removed;

Unlikely. The credit file is a true representation of your behaviour over the last 6 years. If you have defaulted, they wont remove it.

mattymoo2014 wrote: »

2) The status of the account will be changed from “Defaulted” to “Settled”;

Make sure it isnt a 'partial' settlement either. They have been known to do that and then sell it on again...rinse and repeat.

mattymoo2014 wrote: »

3) The Current Balance will appear as £0.00;

As above

mattymoo2014 wrote: »

4) The Default / Delinquent Balance will be set to £0.00;

Not sure.

mattymoo2014 wrote: »

5) There will be no date in the “Defaulted Date” field (as it will be removed);

Wont happen for the above reason.

mattymoo2014 wrote: »

7) This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax and Call Credit.

Likely wont happen either.

Tixy

Be careful with asking for a default to be removed.

In a few instances people have been successful with this and wish they hadn't. The creditor has removed say a 4year old default and instead entered late payment markers and the debt/entry has then stayed on the credit file for an extra 4years.

It is quite common for creditors to only agree to mark a file as partially satisfied on your credit file, but to confirm in writing that they payment has been accepted in full & final settlement. As long as you have the paperwork to show F&F then you won't end up having to pay any more towards the debt.

That said it is very unlikely they would agree to anyway.

As a side note I wouldn't use the word demands in your offer letters either, although I don't expect you were planning to.

Lensman_2

I think you are over complicating this and I doubt your outcome will be very good.

I would keep it simple and use the National Debtline's template letter, which can be found here:
https://www.nationaldebtline.org/EW/sampleletters/sole-letters/Pages/Full-and-final-settlement-offers-%28sole-name%29.aspx

fatbelly

I presume you're not trying F&F on your friends. How much spare cash do you have to deal with the other 32k?

mattymoo2014

Thanks to everyone.

In no particular order:

I'd like not to part with more than 20k to deal with the 32k –!is that realistic? I could probably muster some more, but we are only just breaking even in our budget and need some fallback.

Wasn't planning on using the word "demands" – called them that because I got them from somewhere else and they sound a bit bossy to me!

The real question is what are the minimum ideal outcomes when making a F&F settlement, for me as well as the debt company.

Also, could someone please tell me whether it is worth mustering full repayment if you possibly can? Does that leave your credit file in a better state? i.e. how dreadful is the P flag?

mattymoo2014

Just as a bit of background, we have been making token payments of £1 for a year now. My mum was terminally ill and I had to give up nearly all my work and therefore could not service the debts. For a year before that we were cutting into credit cards / loans to cope with petrol, increased costs etc. Citizens Advice have been helping us.

Tixy

mattymoo2014 wrote: »

The real question is what are the minimum ideal outcomes when making a F&F settlement, for me as well as the debt company.

The key things for you are that they put in writing that the payment will be in full & final settlement and that your credit file shows that the debt is no longer owed.

mattymoo2014 wrote: »

Also, could someone please tell me whether it is worth mustering full repayment if you possibly can? Does that leave your credit file in a better state? i.e. how dreadful is the P flag?

It varies according to people's situation. In most cases I don't think a debt being partially satisfied makes a file look any worse than the default is already doing.
And once the default/credit account fall off then obviously it will no longer affect your ability to get credit at all.

One exception to this could be for people intending to apply for a mortgage before the defaults drop off. I've read that sometimes a mortgage lender may in some circumstances consider someone with old settled defaults still on file but less likely with old partially settled defaults still showing.
That said it is difficult to get a mortgage in either situation.

mattymoo2014

Many thanks.

So are we saying I'll have to wait 6 years before getting a mortgage?

Are there any lenders that would look kindly on the circumstances of the default?

Is there a way for a note to be attached that can be readily viewed, or do I need to try to go into that with a mortgage lender / broker?

Tixy

You can add a notice of correction to your credit file which would be seen by anyone searching your credit file.

However putting the reason you were unable to service your debts on a notice of correction is unlikely to make much difference to a lending decision.

It can be possible to get a mortgage with a settled default or 2 on your credit file.
The older they get, the smaller they were then the more chance of getting a mortgage.
But unlikely to get a mortgage with the main high street lenders, probably be smaller subprime firms who have higher rates and who offer a lower LTV so you'd likely need a bigger deposit.

So yes best to speak to a mortgage broker to understand the likely chance of being accepted for a mortgage.

mattymoo2014

That's extremely helpful.

I thought about trying to pay off my CC in full and leaving it open and trying to service the debt in full each month. That way my credit score / rating might improve and generally I'd look better?