Full and Final Settlement Advice.

Penny_Racer

Hi there!
I'm new to the site so please be gentle!
I'm after some advice on full and final settlement offers.

I'm in a position where I have a lump sum (from selling my flat) and I can offer each of my debtors 25% of the debt.

I have been on an arrangement with all of my debtors for the past three years and have kept in regular contact with them. Apart from a few direct debit errors I have always paid them on time.

I realise that 25% isn't much to offer but as I owe a total of £56,000 I am desperately hoping that this will be an end to it. (perhaps wishful thinking)

Should I wait for them all to agree before handing over the money?
Or if a few accept, can I pay them and continue to negotiate with the others?

I have 11 different debtors so I can see this taking some time. I don't mind this but I don't want to look like I'm favoring anyone in case in gets to court stage.

One of the companies I owe money to Northern Rock. Due to the position they are in at the moment are they likely to grab this offer or will it make them dig their heals in and hold out for the lot?

This website has given me so much hope. I would appreciate any advice. Thank you. xx

climbgirl

I don't think there are any hard and fast rules with full and final settlements - they can choose to accept or decline as they see fit. To be honest, 25% of a final debt is quite low and if you are making the repayments on a regular basis, I doubt any lender is likely to accept 25% as a full and final. Would you take 25% of a debt immediately if the person who owed you was still paying it off, slowly but surely? Full and finals tend to be accepted more readily when the person is unable to pay the debt on a regular basis and it's looking like they're not going to get their money back.

It is of course, worth asking! They can only say no.

I'd be more inclined to use the money to offer slightly higher full and finals to a few of your creditors. I think you'd have more luck with that. Or use it to wipe out a chunk of the debts totally.

Can we have a breakdown of the debt amounts? Might be easier to advise with that info.

Wannabesaver_4

hi! we did something very similar to you about 6 months ago and had 50% of the debt we owed to pay everyone off. Well not good news i am afraid but it was hard going.

Ones that accepted were debt collection agencies and one bank went for partial settlement (not ideal and wont be endorsed on this site but it was a huge debt and we havent heard from them since - they accepted about 35% of the debt.)

The thing i found is that if you are on a DMP or have been making regular payments you will find it hard to get them to accept as your a regular payer. DC's take the money and run so i woudl start with them if you have any debts with them.

We managed to clear about 14K with our final settlements but didnt get rid of them all.

Perhaps something of use would be to choose your higher debts and start with them, or your lower ones. You will feel MUCH better when you start to reduce your creditors.

Good Luck and any questions just shout!

Penny_Racer

Thank you both for your advice.

Heres a breakdown:

HSBC Overdraft: 3,753
HSBC 2nd account overdraft: 800
MBNA Virgin Card: 4,225
MBNA Homebase Card: 1,360
HSBC Card: 8,125
Egg Card: 3,105
Barclaycard: 7,681
AA Loan: 4,345
Egg Loan: 14,241
Northern Rock Loan: 6,707
Barclays Account: 950

I have tested the water and asked all of them at some stage if they would accept a settlement offer. They all said that they would but I realise that 25% is highly unlikely.

What I would like to do is offer f&f to the higher debts and then pay off the rest over the next few years. However, I visited a solicitor last year for some advice and he advised against this saying it would look unfair to the other debtors if it went to court.

To be honest though I've lived with these debts for so many years that I just want to make a start on getting them out of my life. It's been like a part time job keeping in touch with 11 debtors on a regular basis! (I've only got myself to blame though as it was me that got me into this sorry mess):mad:
xx