Early Settlement Figure

scoops82

Hi


Just wondering how you go about applying for an Eearly settlement figure and what kind of % people have had to pay back.


My GF is paying back £50 per month on a debt of £4k - its going to take about 7 years to pay so I have been trying to get her to ask for a settlement figure but if the reduction was only about £500 it might not be worth it if it effects your credit rating.


Your thought and advice would be most welcome.


Thanks
S

glentoran99

what I agreed ranged between 25% and 70% depends on the creditor

immoral_angeluk

Depends on the balance, the age of the debt, who the creditor/dca is and also your circumstances and whether your circumstances will ever improve. Remember they don't have to agree to anything, so make sure you explain fully why you can't and won't be able to pay back the full balance. Also if you have no assets it's worth making reference to the fact if you were to go bankrupt they'd get absolutely jack back anyway after OR fees.

Pick a figure you can afford, go about 25% below it with your first offer and be prepared to be persistent.

scoops82

Thanks - its worth a shot!

Tixy

Has she already defaulted on the debt and paying a reduced amount? Have they frozen interest on the account?
If so her credit file will already be affected.
If she has then she can write and offer a full & final settlement figure at a reduced figure.

If she is hasn't defaulted and is up to date with payments then if she asks for an early settlement figure they will simply tell her the amount she needs to pay to clear the balance. She won't get a discount (but would pay less overall assuming they are charging interest).

scoops82

Hi


Im not entirely sure on the history although so im not sure if she has defaulted but I imagine she probably did a while ago.


I know the interest has been stopped and if for example she cant make a payment she can choose not to.


Does that mean has?


She has mentioned that at some point in the past they did offer her a figure but she cant remember what it was or how long ago but that could be because of the company the loan was originally with was in some money trouble.


It easier to approach the subject with her if I know all the possibilities as she gets stressed easy when it comes to money.


Thanks again

sourcrates

What was the debt for ?

If it was a loan, credit card, catalogue account or the like, send a CCA request first off before you offer them anything !!!

Tixy

Ok - so yes they may well be open to a full & final settlement figure - this link is worth a read and has a template letter she could use - https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx

As others have said its worth starting low, and don't necessarily expect the first offer to be accepted.
If she is currently paying a debt collector then she is more likely to get a low offer accepted than if she is still paying the creditor.

scoops82

I will try and find out the current company name and get back to you as im not sure - I know it was previously Welcome Finance.


I don't think the loan was for anything specific but it ended up getting used for a holiday / car - she knows her mistake now but then is when she was a bit younger.


I think the original loan amount was £2k but I know as of Christmas it was £4.3k and she pays back £50 a month.


Id like to think we can get her debt free! I know her credit file is going to be poor but if we can clear the debt first and then start taking steps at getting her a better credit rating.


SO if we maybe write to them using the template and offer £1 that would be a good starting point?

scoops82

Sorry but what is a CCA?

sourcrates

scoops82 wrote: »

Sorry but what is a CCA?

How and when to request a copy of your credit agreement
Introduction

When reading this blog or the Consumer Action Group forums, you may see advice suggesting sending a “CCA request”. This is a letter to a creditor or debt collection agency asking them for a copy of an executed credit agreement, without which a debt may be unenforceable. In simple terms, you are asking the Creditor/Collector to prove that they have the legal right to demand payment from you.

Sending a CCA request effectively puts the account into dispute, during which time the creditor may not take any further collection action. Without a valid agreement, the debt is unenforcable without a court order.

However, it is important to realize that lack of response to a CCA request may render a debt unenforceable, it does not cease to exist. This process can not, and should not, be used to evade debts.

When to send a CCA request


You should send a CCA request when you require more information about your account, or when you genuinely dispute a creditor’s right to collect an alleged debt. The process should not be used for the purpose of debt avoidance.

Please be aware that there are certain types of debt which will not be covered by the advice here, such as utility bills, bank overdrafts, CCJs and court fines.

Suggested template


This template is adapted from “Letter N” on the Consumer Action Group forum. You can amend it as necessary.

Debt Collector,
Their Building,
Their Street,
Their Town,
AB1 2XY

Date

Dear Sir/Madam

Re:- Account/Reference Number 1234567890

I do not acknowledge any debt to your company or its clients. (delete this line if you are not disputing the debt)

With reference to the above agreement, I require you to supply the following documentation before I will correspond with you further on this matter.

1. You must supply me with a true copy of the alleged agreement you refer to. This is my right under your obligation to supply a copy of the agreement, under the legislation contained within s.78 (1) Consumer Credit Act 1974.

2. A full statement of account.

3. A signed true copy of the deed of assignment of the above referenced agreement that you allege exists.

4. A copy of any other documents referred to in the agreement.

I understand that under the Consumer Credit Act 1974 (Sections 77-79), I are entitled to receive a copy of our credit agreement on request. I enclose a payment of £1.00 which represents the fee payable under the Consumer Credit Act. Please note that under no circumstances should this payment be set aside any alleged debt. If you are unable to supply the documentation requested, this fee should be returned.

I understand a copy of our credit agreement should be supplied within 12 working days.

I understand that under the Consumer Credit Act creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under these sections of the Act.

I look forward to hearing from you.

Yours faithfully

Mr A N Other



It is recommended that you do not sign the letter with your usual signature, as there have been rumors of creditors “cutting and pasting” it onto their own paperwork.
You could use a handwriting font in your word processor, or sign over a thick line which would make it obvious if your signature was tampered with.

It is strongly recommended that you send the request by Recorded Delivery, which for a standard size and weight letter costs £1.04. The delivery receipt should be kept with the copy of the letter. Delivery confirmation is available using the ‘Track and Trace’ feature on the Royal Mail website home page. It is best to print this off when it becomes available and also keep it with the copy of the letter.

The £1 fee is best paid with a crossed postal order. The postal order receipt should also be kept with the copy of the letter.