Debt collection letter offering discount - legally binding?

dealwithmydebt

EDIT: full letter is here. Make sure to delete the space between ht tp:

ht tp://tinypic.com/view.php?pic=125jta8&s=9#.V8CcsjX-jSZ

Hi,

A couple of years ago I got into financial difficulties and ended up defaulting on a number of my accounts. Lowells (the debt collectors) have written to me today, offering a 75% discount if I pay the balance by mid-September.

I am in a position where I can pay the 25%. But I've heard stories on the internet about debt collectors taking the part payment then saying you still owe the rest, selling the debt on etc - so you should always get it in writing that it's a full payment. Would this letter be legally binding, and absolve me of the full balance when I pay the 25% figure? It says 'this means you will pay £126.27 to clear the account' and 'we will take £378.83 off the outstanding balance' (which would clear the account) so I think this letter is probably good and I can just go aherad and pay, but I thought I'd run it by everyone here first.

I unfortunately cannot put an image of the letter in this thread because I'm a new user and cannot link, so I've typed it out below:

----

Dear Mr xxx

75% discount offer - if you contact us by 19/09/2016
Register at [link removed] or contact us by 19/09/2016 to arrange payment and we will take £378.83 off your outstanding balance.

- This means you will pay £126.27 to clear the account

- You can pay the discounted balance through affordable installments.

- Register at [link removed] or call 0333 556 5734 by 19/09/2016

Details on how this will impact your credit file are included on the back of this letter. The discount only applies if you keep to an agreed repayment arrangement which is affordable for you.

What happens if you do not contact us?
If you do not contact us by 19/09/2016 we will assess your account to decide whether to take legal action to recover the full balance.

Yours sincerely

Andrew Bartle
Chief Operations Officer

----

So, is this letter legally binding, and if the amount was paid I defininetely wouldn't owe the remaining 75%?

sourcrates

This is what you need to have in writing, signed by the creditor in order to be legally binding, so you will not be chased for the remainder of the debt :

https://www.nationaldebtline.org/EW/sampleletters/Pages/Full-and-final-settlement-offers-%28sole-name%29.aspx

dealwithmydebt

Here's the letter. Make sure to delete the space between ht tp:

ht tp://tinypic.com/view.php?pic=125jta8&s=9#.V8CcsjX-jSZ

fatbelly

http://oi64.tinypic.com/125jta8.jpg

Seems OK to me.

Though I'm a little suspicious of the 25% offer. You'd normally expect an opening bid to be less generous than this.

This isn't a very old account that you haven't paid for 6 years is it?

Or are Lowell desperate for cash all of a sudden?

dealwithmydebt

It's not an old account - the default was in 2014. The magnitude of the discount is probably simply because I have no job, no assets, and haven't responded to their prior letters (where they offered 50% off).

If this letter is legit, I'm going to request a breakdown of the total figure to determine that no ridiculous 'interest' or 'charges' have been applied to the account, and then if that's to my satisfaction pay them what they're asking, since I can just about scape together the figure that they've offered.

sourcrates

You say you have numerous other accounts as well as this one.


As you are unemployed, have you considered a debt relief order instead ?


No job, no assets, do you own a car ?


If its worth a grand or less, or you don't own a car, and as long as you have £50 or less left after all your household expenses are paid I would defiantly look into it before you pay Lowell or anyone else a penny.