Full and Final Settlement Letter

strawberryblonde

Hi All

I am in the process of writing out !!!!!! letters to our creditors. I am using the National Debtline template letter but want to know if addng in my own info will help/hinder the offers.

Would welcome any comments

Also, should I include a copy of our income/exp from the outset? All the creditors currently have up to date ones but wondered if I should include them anyway?

Dear Sir/Madam
Without Prejudice
Account No: XXXXX

We write with reference to the money which you are claiming on the above account.
We can confirm that we are unable to pay the money which we owe in full. An application for an IVA was rejected on 15th December 2014. We have debts totalling more than £xxxx which at our current rate of repayment will take us more than 43 years to repay. Added to this, recent changes announced in the budget will mean another significant drop in our income due to the 20% increase in Housing Association Rents. We estimate this increase will significantly reduce the surplus money we have left over each month to pay towards our debts and thereby further extend the time to repay. With this in mind, we now have to take steps to address this situation. We believe that unless we are able to negotiate a full and final settlement with our creditors, we will have no choice but to consider bankruptcy.
A relative has offered us a loan of £xxxx and we wish to offer this as an ex-gratia payment in full and final settlement of the account. We are currently paying you a monthly amount of £xxx and our offer represents approximately 7 1/2 years payments. The offer from our relative will not be available forever and our relative will not make the payment unless the offer is accepted. This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released from any liability.
We also request that, if accepted, you make an entry on our credit reference agency files relating to the above account as having been paid and the account closed.


Payment can be made within 14 days of receiving your written agreement of this offer and method of payment.
We look forward to hearing from you.


What do you think?

Many Thanks

National_Debtline

Hi Strawberry Blonde,

Your letter is good, but it does seem to be giving the creditors a lot of information on the first ‘round’ of negotiations….nothing is wrong with what you have written, but normally it is a good idea to just use our standard letter first, and then gage the responses you get back.

If you get mixed response from the debts then you can start to explain your circumstances in more detail (i.e. the length of time it will take to repay, the fact that the money is a gift and only available for a limited time, the alternative being bankruptcy etc.) to try and help the creditors understand your situation in more detail and hopefully encourage them to accept your offer.

I hope that helps.

Laura
@natdebtline

strawberryblonde

Hi Laura
Thanks for your reply.
OK-I will amend the letter to just read as the standard and then see what happens.
I can see that it will give us perhaps a bit of bargaining power.
Fingers crossed

strawberryblonde

Hi
I am wondering if someone could give advice on the letter we have received from our biggest creditor Enact. They have agreed to settle £4174 on a debt of £28410 which we are extremely happy about. They have said that they will send out a letter confirming they will not chase us for more money AFTER we have paid. We have had a couple of conversations with them about this and they had said this is their standard procedure. The letter we have received says;

We refer to your recent offer for settlement of your liability for the above matter and write to confirm acceptance of the offer in the following terms.
The lump sum payment of £4174 must be received by this office on or before 27/10/2015. Payment can be made by the following methods.

Bank transfer

Debit card

Cheque/Postal Order

It then goes on to say

Our client also reserves the right to pursue and other parties for the remaining balance. (

Apparently if we had a guarantor they woould pursue them for the remainder but as we don't this is irrelevant.)

Should we go ahead and pay on this. It seems they will not issue any other letters until we have paid them.

Any advice greatly appreciated.

sourcrates

strawberryblonde wrote: »

Hi
I am wondering if someone could give advice on the letter we have received from our biggest creditor Enact. They have agreed to settle £4174 on a debt of £28410 which we are extremely happy about. They have said that they will send out a letter confirming they will not chase us for more money AFTER we have paid. We have had a couple of conversations with them about this and they had said this is their standard procedure. The letter we have received says;

Apparently if we had a guarantor they woould pursue them for the remainder but as we don't this is irrelevant.)

Should we go ahead and pay on this. It seems they will not issue any other letters until we have paid them.

Any advice greatly appreciated.

Hi, one question,

Why do you think they have accepted such a low amount of
4k on a 28k debt ?

You need something in writing from them stating that neither they, nor there agents, will chase you for the balance, BEFORE you part with a penny.
Then, and only then, will it be acceptable.

You should call the shots on this, not them.

fatbelly

I don't like the sentence

Our client also reserves the right to pursue and other parties for the remaining balance. (

because it does not make sense. Was it supposed to say

Our client also reserves the right to pursue YOU and other parties for the remaining balance. (

strawberryblonde

Sorry that was my typo should have read:
“
Our client also reserves the right to pursue any other parties for the remaining balance.

xHannahx

sourcrates wrote: »

Hi, one question,

Why do you think they have accepted such a low amount of
4k on a 28k debt ?

You need something in writing from them stating that neither they, nor there agents, will chase you for the balance, BEFORE you part with a penny.
Then, and only then, will it be acceptable.

You should call the shots on this, not them.

They'd make more selling to a debt collection agency. are there two or more of you named on this debt? Some basic sums suggest to me they are accepting it as f&f for one person, rather than both persons liability. I.e. Two people joint debt, £14k each. I'd say question them further Whether this is the case that they are only releasing one person from a joint debt for the amount offered.

Knowing what percentages debt is sold to collection companies for, I've not heard of Many companies accepting f&f for less than they can make from selling to a DCA as they want to get best return. An offer of 14.6% is too low for any company I know of.

strawberryblonde

They have accepted the settlement as we have basically told them we will go bankrupt if they don't. Our levels of debt are such that they will never realistically get the money back at our current level of repayment. The letter is issued to us in joint names and there is no other party to get the money back from. We have no assets or savings and our available income to pay towards our debts is set to reduce to a level where we would only be able to pay token payments due to the changes announced in the budget to housing association rents. Enact are not the only creditor who have accepted this level of offer. M and S bank have agreed to accept £941 on a £5600 debt. We have negotiated a 70% reduction with Cap Quest and are waiting to hear from our 2 other creditors.

strawberryblonde

Also just as a further thought, Enact are not a Debt Collection Agency. They are acting on behalf of Santander. The debt is for a mortgage shortfall following mortgage rescue, hence why it is so large. This may be why they have agreed to settle as the debt hasn't been sold on. From what I know about mortgage resuce, most shortfalls never get repaid as the clients tend to go bankrupt.

strawberryblonde

Is anyone from @National Debtline to give some advice on this please?