Full and Final Settlements?

FAllenAngel`

Hi all,
I am still in a Debt Management plan, with Stepchange. I have 3 creditors - Barclaycard, BCW and DLC.
I am currently paying them a small amount every month, but after the Budget I am concerned that my Tax Credits will be going down in April, I will be losing an amount equal to approx. 2/3's of what I am currently paying them.
I am unable to get a better job - believe me, I have tried so hard but there is nothing out there for me. (I will keep trying though!)
A relative has offered to lend me some money so I can offer F&F settlements to my creditors. This is what I need advice on!
Stepchange have advised me to write to them explaining circumstances, and offering the maximum amount I can in F&F settlement.
Forums seem to suggest that you should start with a lower offer and negotiate.
Which is correct? And if it's the latter, what percentage should I offer to start with?
I need them to understand that this is a one time offer, and I would really like to have these debts settled by the time my Tax Credits reduce. I don't want to pay them less every month. On my current plan I could be debt free in 9 years, but from April this will take much longer.
Anyone who has successfully negotiated a F&F, do you have any advice for me? Please?

NewcastlePaul

I too am on a Stepchange DMP and am currently going through F&F offers.
They offered to do it on my behalf which would involve sending them the funds which they would then offer pro rata to all creditors.

They said they looked towards settling rather than negotiating so I asked if I could do it myself without having a negative effect on my DMP. They said that was fine providing i treat all creditors equally and fairly.

If you check my posts my PPI and F&F experiences are there.
I went in at 30% and no one accepted. Did get some joy at 40 & 50% but all creditors are different.

Good luck and keep us updated how you get on

runforlife

There is a formula that I have seen (think on National Debtline) which seems to be industry standard and worth consideration for your offer.

Take the available lump sum and multiply that figure by the cost of each debt.
Divide that result by the total amount owed to all the creditors.
That is the amount you then offer.

(Lump sum x Individual Debt) / Total debt = Offer

Example:

You have £10,000 owing to 4 creditors and an available lump sum of £3500

£ 2500 to Mastercard
£ 1200 to Visa
£ 3500 to Loan
£ 2800 to Storecard

Using the formula then:
£3500 (lump sum available) x £2500 (debt to Mastercard)
÷£10,000 (the total amount you owe to ALL creditors)
= £875 (offer to Mastercard)