Full and final, and money laundering

sourcrates

OP you are free to do what you wish with this money.
You do not need to go through your DMP provider, you can make the offers to your creditors yourself.
I suggest you CCA all your remaining consumer credit accounts first to see if they all hold the correct paperwork that allows them to collect on these debts, no CCA agreement, still means they cant legally make you pay.
Also if there are any paperwork issues, you will find creditors settle for a lot less than they normally would, this should be your first port of call, then, dependant on what information you get back, you can make an offer to each creditor respectively.
Your situation is by no means uncommon.

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Puddylove wrote: »

It's not all THEIR money, is it - as £19.5k is creditors' cash.

The main question you need to ask is how much of that sum remaining is actual capital of the loan and how much is the interest that's been lumped on top. It's understandable that lenders add interest to a loan, it's how they make their money, but when they continually add interest to something so that the overall amount becomes 20 or 30% over and above the realistic capital + interest rate, that's when it becomes ridiculous.

Would you like it if you took out a loan and the lender kept adding interest at such a rate you would start questioning whether or not the 'debt' would ever be repaid at what they would suggest as 'the full amount', even when you've repaid the capital plus base rate of interest?

Thinwhiteduke_2

Thanks again to all the posters.


And thanks for you comments Puddylove, I appreciate you have strongly held feelings, but things are never black and white. I don't want to discuss what 'a run of bad luck' means here, its long winded, and the context is quite personal.


I suppose my question is then (which some have answered as yes), can I legitimately make an offer for a reduced amount as a F&F settlement and retain some of the money for future use?


Morally it might be wrong (which I accept), but is it better for my family - yes it is, apologies if that sounds selfish.

National_Debtline

Hello all,

As already mentioned, there isn't a legal obligation to use the proceeds to reduce indebtedness although many people choose to use any lump-sum they may find themselves with (proceeds from house sales, redundancy payments, compensation payouts, PPI refunds etc.) to reduce their debts. There isn't anything wrong about making an offer in full & final settlement as ultimately the creditor is free to either choose of accept the offer.

Full & Final settlements can be complex beasts, the law surrounding them can be traced back to 1602(!). It is important to be honest with your dealings. So long as both parties agree the settlement with 'clean hands' it means that the creditor cannot go back on their promise to accept the settlement once you've made the payment.

A partial settlement should still show a zero balance on your credit file.

Really hope this helps.

Best wishes,

David @ National Debtline.

National_Debtline

I suppose my question is then (which some have answered as yes), can I legitimately make an offer for a reduced amount as a F&F settlement and retain some of the money for future use?

If you have to ringfence some of the money for other things and then offer the remainder on a pro-rata basis to all your creditors I can see no issue with it.

Hope this helps,

David.

Puddylove

Thinwhiteduke - Morally we agree that you should repay your debts, but only you know your reasons and your circumstances.

As I said, I do have sympathy for those whose circumstances turn against them, and wish we (as a society) did more to help.

I wish you well - and some good luck for the future.

sourcrates

This forum is for advice on all matters financial, not on matters of morality.
I have yet to see a financial organisation that operates on the latter.

Puddylove

sourcrates wrote: »

This forum is for advice on all matters financial, not on matters of morality.
I have yet to see a financial organisation that operates on the latter.

Not all of us can separate morality from life so easily.

-taff

Try separating it from money...it's really easy.

We don't live in a society that cares abot people, we live in one that careas about money. If you are in any doubt about that, take a look at the sentences handed out for killing someone, then look at the ones handed out for stealing money.

cynicalgit_2

Puddylove wrote: »

Seriously?
People are advising the OP to not repay their debts so they can buy themselves a nice house in the future?

I'd have every sympathy if, due to a change in circumstance, they were unable to repay - and not sure what 'a run of bad luck' means - but if you borrow money, you should repay it.

And if you think lenders/creditors are evil agents of Satan then don't take their cash so readily.

Another Daily Mail reader.