full and final settlement question

helloray

Hi. I have been negotiating with moorcroft for a full and final settlement payment for an overdraft with hsbc. They finally csme back to me the other day saying that they and theirclient were happy to accept my partial settlement offer. I have written several times and made it painfully clear that the only thing on the table is some cash from a relative and only on the basis of a full and final. At first they refused my initial offer so I wrote back asking what they would accept as a full and final and then got this reply about partial. I wrote again reiterating the above and now they say they will accept it as a full and final but that it will show on my credit file as only partially cleared. Isnt that the same as a partial settlement? They say they will no longer persue me for the debt but I dont trust it. What should I do now? Grateful for any insights!

fermi

Marking your credit file as a partial settlement in a F&F is a technical thing on credit files, not that the debt isn't legally settled as long as you have it in writing that it is.

On your credit report a partial settlement flag simply distinguishes that account from one where all the money was paid in settlement. i.e. someone checking your file would be able to distinguish between that account and one that was settled with the whole amount paid.

ICO guidelines to creditors and CRAs say this is the fair way to record these, so it is OK.

Just make sure you get it in writing that your liability to pay anything else is being written off and the remainder will not be chased or sold on.

helloray

Thanks v much fermi. I have read that in some cases you can negotiate the debt to be shown as settled on your credit file. How likely is it that I will be able to get yhem to agree to this and is it worth it? I want to get my credit rating to start improving by settling this debt. Will that happen with my file showing a partial settlement?

Rigglet

Going through the same thing myself.
Today I wrote to all my creditors and rang them also.
I've used the template letters widely available and have offered them all 20 p in the pound,explaining if they don't except it then they won't get anything as I will go bankrupt,i obviously was a bit more tactful than that in the letters and conversations on phone.
I have had some results already, just from phone calls, please bear in mind I won't part with a penny until I recieve it in writing they will be accepted as settlements and can't come chasing me in future, I like to think I'm not that naive to trust a financial institution.
So if anyone cares I can post my results as they get back to me in letter form officially.
Here's my first offer that is derived from a Halifax account that has been sold on to Apex.

Halifax/Apex. £6500 owed
I offered £1300(20% of overall debt)on phone to them
They immediately reduced it to £4681(reducing it by 25%)
I told them its £1300 or nothing.
They then came back with £3120(reducing it by 50%)
I told them £1300 or nothing(get the picture?)
So in the space of 10 mins on phone(plus some bartering and a couple of other tricks) I have already halved debt and saved £3120.

I appreciate everybody's situations are different but don't listen to all the doom and gloom merchants that say you got no chance paying 20% back.If you offer them 50% from the start your not doing yourself any favours are you?

The above figures are all facts, not exaggeration and not lies.

Out of the £25,000 I owe I will get it down to £5000(maybe pay ever so slightly more if it stops me going bankrupt, no point cutting your nose of to spite your face).

Let's be honest, it's all a bit of a game and if you know the rules you can bend them to your favour.Obviously I shan't be putting on here how to play them at their game as they will get cute to it if everyone starts doing it and I want to get everything signed, sealed and delivered first.

Another thing, if you can read this then the financial bodies sure as hell do too.

I will help out where I can though once the dust has settled as it were.
Watch this space :shhh::shhh:

helloray

Well good luck with it all! Do you think an agreement in writing that the debt is settled and wont be persued by the agency or client plus the debt listed as partially settled on my credit file a good outcome then? Im still not 100 percent sold on the partially settled status on my credit file...

Rigglet

Found this Helloray.Will find some more tonight and with it all up.
Full and final settlements are partial settlements
F&F settlements do not pay the full amount owing so creditors are will not usually mark the debt as ‘settled’, instead it is almost always marked as partially settled. As part of the negotiation in agreeing a F&F, you can ask for the debt to be shown as settled, but it is rare for a creditor to agree to this.

If the debt has previously defaulted, the term ‘settled’ is not used and the term ‘satisfied’ is used instead. A F&F settlement on a defaulted debt is therefore usually marked as ‘partially satisfied’.

Whether this ‘partially settled/satisfied’ matters to you probably depends on the importance of having a ‘clean’ credit record and the amount the creditor will take for a F&F. So if the creditor will accept say 25p in the £, then the alternative of paying the full amount to get that nice ‘settled’ marker would be very expensive. But if the creditor will not accept less than 90% then you might consider it is worth paying the full amount, especially if you are likely to need a mortgage in the near future.

fatbelly

How F&F settlements affect credit ratings

strawberryblonde

Rigglet wrote: »

Going through the same thing myself.
Today I wrote to all my creditors and rang them also.
I've used the template letters widely available and have offered them all 20 p in the pound,explaining if they don't except it then they won't get anything as I will go bankrupt,i obviously was a bit more tactful than that in the letters and conversations on phone.
I have had some results already, just from phone calls, please bear in mind I won't part with a penny until I recieve it in writing they will be accepted as settlements and can't come chasing me in future, I like to think I'm not that naive to trust a financial institution.
So if anyone cares I can post my results as they get back to me in letter form officially.
Here's my first offer that is derived from a Halifax account that has been sold on to Apex.

Halifax/Apex. £6500 owed
I offered £1300(20% of overall debt)on phone to them
They immediately reduced it to £4681(reducing it by 25%)
I told them its £1300 or nothing.
They then came back with £3120(reducing it by 50%)
I told them £1300 or nothing(get the picture?)
So in the space of 10 mins on phone(plus some bartering and a couple of other tricks) I have already halved debt and saved £3120.

I appreciate everybody's situations are different but don't listen to all the doom and gloom merchants that say you got no chance paying 20% back.If you offer them 50% from the start your not doing yourself any favours are you?

The above figures are all facts, not exaggeration and not lies.

Out of the £25,000 I owe I will get it down to £5000(maybe pay ever so slightly more if it stops me going bankrupt, no point cutting your nose of to spite your face).

Let's be honest, it's all a bit of a game and if you know the rules you can bend them to your favour.Obviously I shan't be putting on here how to play them at their game as they will get cute to it if everyone starts doing it and I want to get everything signed, sealed and delivered first.

Another thing, if you can read this then the financial bodies sure as hell do too.

I will help out where I can though once the dust has settled as it were.
Watch this space :shhh::shhh:

I will watch this space with interest as I am in a similar position to you. My hubby and I are looking to offer 15% to our creditors. We were just turned down for an IVA but most of the creditors voted to accept the 12% offer on the table. Sadly our biggest creditor didn't and as they have 50% of the debt then our IVA failed but I think if we offer them the equivalent of 4 years payments upfront, we have nothing to lose. If the creditors don't accept full and final settlements, our only real option is bankruptcy as we have £64000 in debt and have no assets.

forgotmyname

Rigglet wrote: »

Going through the same thing myself.
Today I wrote to all my creditors and rang them also.
I've used the template letters widely available and have offered them all 20 p in the pound,explaining if they don't except it then they won't get anything as I will go bankrupt,i obviously was a bit more tactful than that in the letters and conversations on phone.

I wasn't tactful and offered even less than 20p. I was quite blunt. Although i had not had any contact with them for quite a while. Ignored phone calls and refused to speak to them and ignored letters also.

I was also blunt about what they stuck on the credit file. I said stick what you like on there i dont want anymore credit ever.

I didnt think they were going to accept it. I gave them until a wednesday and a couple had accepted but 2 others had not responded so i called them. They accepted.

They knew i was serious and would file for bankruptcy if they all didnt accept.

harveybobbles

Rigglet wrote: »

Halifax/Apex. £6500 owed
I offered £1300(20% of overall debt)on phone to them
They immediately reduced it to £4681(reducing it by 25%)
I told them its £1300 or nothing.
They then came back with £3120(reducing it by 50%)
I told them £1300 or nothing(get the picture?)
So in the space of 10 mins on phone(plus some bartering and a couple of other tricks) I have already halved debt and saved £3120.

Sadly, the only winner here is the Apex call handler who is earned one hell of a Christmas bonus.

Apex would have paid a penny in the pound for the debt, which is why they offer discounts.. You think you're getting a good deal.

I would have offered them £100 F&F to be honest.

How old was the debt? when was payment last made?

strawberryblonde

forgotmyname wrote: »

I wasn't tactful and offered even less than 20p. I was quite blunt. Although i had not had any contact with them for quite a while. Ignored phone calls and refused to speak to them and ignored letters also.

I was also blunt about what they stuck on the credit file. I said stick what you like on there i dont want anymore credit ever.

I didnt think they were going to accept it. I gave them until a wednesday and a couple had accepted but 2 others had not responded so i called them. They accepted.

They knew i was serious and would file for bankruptcy if they all didnt accept.

Can I ask how many creditors you had and what your levels of debt were? We owe £64000 and have just had our IVA application rejected at the creditors meeting. I am looking to see if we can negotiate !!!!!! as many of the creditors were happy to accept our 12% offer and so I am going to see if we can offer this via a lump sum, and state that if not accepted we will have to go bankrupt.