Full & Final Settlement Opportunity

I_Know_I'm_Not_Alone

Morning all, I haven't posted in a long time but I hope you are all well.

After having the 'light-bulb moment', with £76K worth of personal debt, I started on a DMP with CCCS back in December 2006 and have been paying into that monthly ever since. On my current payment schedule, it's due to finish in April 2019. It's been tough, epsecially with two young children, but I'm pleased to say that I haven't missed a single payment and now have my debt down to circa £16K.

However, after 17 yrs service with my employer, I have been selected for redundancy and have immediately reduced payments to a nominal £5p/m each. I will shortly be in a position to clear all my outstanding debts though, potentially the best thing that would come out of this situation.

Because I am uncertain about when I will next find work, I want to make them a full and final settlement. Because of the length of time I have been on a DMP (over 7 years), because there is 5+ years to go, and because I am unsure when I could start making realistic regular payments again, would it be realistic me going in with an offer of around 25-30%? Debts are with Barclays (2 loans totalling £6000), Bank of Scotland, now Robinson Way (loan circa £8000) and credit cards (Capital One £600 and Cooperative £1400).

Comments would be greatly apprieciated.

One other comment - for those people who either work for StepChange, or indeed use them, they have been absolutely fantastic.

Tixy

Definitely worth trying at that sort of % as a starting point, there is a chance they may accept or if not you'll still have room to up your offer a little.

Perhaps wait until you have paid 2-3 months of token payments before making the offers.

Are you going to make the offers yourself or ask stepchange to make them? if you are doing them yourself then have you seen national debtline's factsheet and template letter?

moohound

Are there some rules about claiming job seekers and deprivation of capital if you pay off all your debts with redundancy money?

Good luck with the full and final payments, because the debts are old I think they might be willing to take a low %, mine took between 30 and 90% and my defaults were less that a year old.

Agree with Tixy about making a few months of token payments until your position becomes clearer.

National_Debtline

moohound wrote: »

Are there some rules about claiming job seekers and deprivation of capital if you pay off all your debts with redundancy money?

Hello there,

There are indeed rules - and they can be complicated. Generally speaking, and as far as Job Seeker's Allowance is concerned, if you use the money to pay back a debt which is due for payment immediately it wouldn't be normally classed as a deprivation of capital. In cases where the debt isn't immediately due for repayment, as far as I understand it the decision maker would need to prove that the payment was made with the sole purpose of being able to claim the JSA. I know that the rules are going to be simplified with the role out of universal credit - and that the repayment of debts will be allowed.

As far as full & final settlements are concerned, the general approach is to start low and work your way up. If a debt collection agency has purchased the debt, they would normally do so for a small amount compared to the debt's 'value'. You may get an agency accept a low settlement quickly as it could still turn them a profit.

We've a useful fact sheet covering full & final settlements, you can find it by clicking through this link.

Best wishes,

David @ National Debtine.