Satisfying debt

abc123456

I have 2 loans of about £3,000 each at the moment, which I have had for the last 4 years and, due to circumstances, have only been able to pay minimum payments. In the last 4 years, I have paid about £100 monthly to each of them, and all in all I have only repaid about £1,000 of the original debts (maxed out credit limits, I know!)

Due to further circumstances, I can see my financial situation getting a lot worse in about 4 months time, when I would virtually be unable to repay these debts.

If a family member was to give/long term lend me, say £4,000, to repay these debts, is it all possible to ask the finance companies to whom I am indebted, to consider reducing the totals if full and final payment is made?...on the basis that there is a possibility that I may not be in a position in the near future to pay anything at all?

I do suppose I have probably paid each of them the same amount I am owing, in interest payments over these past 4 years, so dont feel bad at least asking.

I do recall pre 2008, finance companies being a bit more lenient to this proposition, but is this still a likely scenario?

sourcrates

If the debts are still with the original creditor, and you have not defaulted on them, then it is unlikely they will accept your offer.
In order for a "full and final settlement", paying a lesser amount than was originally stated in the agreement you signed, you would have to have :


(A) Defaulted, and


(B) The debt would have to have been sold on to an external DCA.


Only at this stage would an offer of the kind you have in mind even be considered.

moohound

A couple of mine were still with original lenders when I paid the reduced Full and finals, Barclaycard(was egg), Virgin, and Sainsburys loan. They had all defaulted though.

longtermplanner

If you have been making the minimumpayments, no they will not accept reduced full & finals.

The fact you have paid a lot of interest is irrelevant, what matters to them is whether you can afford to keep paying.

Wait until you can't make the payments, then write to them and offer what you can afford. After 6-12 months of that they will probably settle for 66p in the £ (ie £4000 to repay two loans of £3000).

abc123456

Thanks everyone, it was just a thought.