Final settlement amounts

merrydance

Hi hope someone can help me. We are planning either to sell our house or re-mortgage to pay off our debts. Is it possible to offer full and final settlements on credit card debts before they have gone in to default or do you have to wait for that to happen first.

Thanks

sourcrates

Hi,

Selling your house is a bit extreme to repay unsecured debt, you will not be able to make partial offers on accounts that have not defaulted.
Usually an account must have a history of late, then missing payments, were it has gone into arrears, for at least 6/8 months, and the creditor has washed there hands of the account, and sold on the debt to a collection agency.

Until that point, you are still liable for the full amount under the original agreement, so it's usually only specialst debt purchasers that will entertain settlement offers, as they have paid less than the full amount outstanding for the account.

Having said that, you can always ask, just don't expect a positive responce.

If you would care to elaborate on your situation, there may be other options open to you rather than the one you propose ?

merrydance

Thanks sourcrates. We went through Stepchange and they advised us to go for equity release. We wanted a scheme that let us pay the interest every month so it would not compound. But were advised because of our debts no company would entertain this idea. Option offered meant paying compound interest, there is no way we would go for this. Spoke to a fa he's going to see if we can get an ordinary repayment mortgage, if not will look at other equity releases for us. My husband has not paid his 2 Barclaycard credit cards for 2 months, and has made £30 token payments on both. We are both going to write to our credit card companies as we have had these credit cards for over 10 years, to see if they still have copies of our credit agreements. If we sold our house or got a remortgage we would not get enough to pay off all our credit cards. Hope this makes sense.

Thanks

Sazzie23

Seems a bit off for SC to recommend equity release especially when it's a high risk strategy.

Maybe seek a second opinion in here with your SOA.

I think what you are saying is that if you sold your house it would not pay off the full amount of outstanding mortgage and debts. I was also in that position but equity release was never a suggestion, I am now in the position through my DMP that my debts are now less than the house is worth.

Good luck with whatever you decide to do.

January2015

Definitely get a second opinion. Transferring unsecured debts to secured (remortage) is not a good idea. Believe me you are talking to a seasoned pro who has been there, done that, got the next lot of debt on credit cards and loans to show for it.

Write to your unsecured creditors now and advise you are seeking financial advice from debt support charities and make a token payment of £1 to each of them. This will buy you some time to get further advice.

Don't rush into more secured debt to clear unsecured debts.

Selling your property should be the last resort (unless you have a huge mansion with lots of equity to clear the debts and allow you to buy something smaller with the same, or lower mortgage payments than you have now)

sourcrates

merrydance wrote: »

Thanks sourcrates. We went through Stepchange and they advised us to go for equity release. We wanted a scheme that let us pay the interest every month so it would not compound. But were advised because of our debts no company would entertain this idea. Option offered meant paying compound interest, there is no way we would go for this. Spoke to a fa he's going to see if we can get an ordinary repayment mortgage, if not will look at other equity releases for us. My husband has not paid his 2 Barclaycard credit cards for 2 months, and has made £30 token payments on both. We are both going to write to our credit card companies as we have had these credit cards for over 10 years, to see if they still have copies of our credit agreements. If we sold our house or got a remortgage we would not get enough to pay off all our credit cards. Hope this makes sense.



Thanks

How much do you owe on these credit card accounts ?

If they were taken out prior to April 2007, then a properly formulated CCA request, to each account, would be my first step.

You should do this ASAP.

merrydance

Hi

Thanks for the replies we owe approximately £62,000 on credit cards and £17,000 on our mortgage. We are aged 69 and 59 years perhaps that is why Stepchange advised equity release? Mortgage is coming down quite a lot now as it is nearing it's end. I was surprised Stepchange didn't suggest a DMP could it be due to our age? We could sell our house and maybe buy a small flat with the remains, not too sure about that.

Yes most of the cards are pre 2007 will do the CCA letters - thanks