Partially settled debts

syvci

Hi guys,

I'm in the process of negotiating full and final settlements with my creditors. The replies I've had have varied but they generally are only offering a settlement that will appear as 'partial'. I've defaulted on all debts and they will fall off my credit file in a couple of years. I've read on here that it's dangerous to accept a partial settlements even though they say they will not pursue me further. I've written letters using the template that my offer is based on the clear understanding.... ( they will not pursue the debt in any way and that I relinquished of all liability) is this legally binding or am I worrying over nothing

Thrugelmir

Partial settlement may well result in you being "black listed" with that particular financial institution. There'll be no 6 year limit. They are under no obligation to deal with you for as long as they wish.

syvci

Apart from being blacklisted have you heard of people being chased for money after they've partially settled? Surely that wouldn't be legal?

HappyMJ

syvci wrote: »

Apart from being blacklisted have you heard of people being chased for money after they've partially settled? Surely that wouldn't be legal?

They don't usually chase but the option is there if they feel you've come into money. This debt will appear on your credit record. If you were to die.....hopefully not...the creditor has a claim on your estate for the remainder.

It's better to negotiate a full and final settlement.

Thrugelmir

Unlikely if there's formal agreement and acceptance of the partial settlement. Debt collection is an expensive and time consuming business. Hence why companies accept then black list. Far more economic way of doing business. They'll always be customers that default for some reason or another.

syvci

HappyMJ wrote: »

They don't usually chase but the option is there if they feel you've come into money. This debt will appear on your credit record. If you were to die.....hopefully not...the creditor has a claim on your estate for the remainder.

It's better to negotiate a full and final settlement.

After 6 years, ( 2 more to go) my default and the account ( therefore including partial payment ) drops off my credit report right?

fermi

syvci wrote: »

After 6 years, ( 2 more to go) my default and the account ( therefore including partial payment ) drops off my credit report right?

Correct. 6 years from the original default date all trace is removed from your credit report. Only the original creditor will know it ever existed.

To protect yourself make sure you have it in writing that the remainder will be written off, and will neither be pursued or sold on.