Partial / Full Settlemt - Which is better?

scoops82

Hi


My GF has just been told that she is due £2.4k off her debt to a Welcome Finance due to PPI refund (thanks to this MSE Forum).


This leaves her with about £1k of debt with them but no interest is being charged on this am ount - the debt started in about 2010 I think.


What's the best approach?


Pay off in Full on 0% interest free Credit Card?
Continue to pay in instalments?
Try and get an early settlement figure and pay off straight away?


How differently are partial and full settlement treated?
When does the debt fall off the record, 6 years from when its settled?


Sorry for the bombardment of questions but I would like to resolve this one way or another.


Thanks
S

PixelPound

Settled is better than partial. If the instalments have no interest, then why get a 0% card out, unless its to get it marked as settled sooner, and could you pay the 0% card off in time?

redux

The debt disappears from credit file records 6 years from default date, irrespective of what happens subsequently in the history.

Don't bother with transferring to a 0% card, as it's already 0% at the moment.

It may well be possible to negotiate a discounted partial settlement, like 40 to 60% of the remaining balance, but they will want it to come from funds that don't involve further borrowing, i.e. not from a credit card.

scoops82

So you would suggest that there is no rush in repaying this?


The debt will be removed from the credit score ( we are taking action to repair this by taking out credit card, having DD and a stable address ) but as were not paying interest and the debt is old there is no plus side to settling early? If at all?


Thanks
S

jellie

If the debt is still with Welcome (ie they haven't sold it on), then it won't be on your gf's credit records now.

Welcome haven't been reporting to the CRAs for some years.

scoops82

Well they sold it to Experto Crefit and have it back again so I can only assume its back with them. SO the fact she has a new credit card and is building up her credit rating again means its improving?


Im assuming that there is no way of avoidfing the debt? Just paying it off monthly seems to be the best approach as there is no interest.

Thrugelmir

If it's being reported. Then won't be doing her credit history any favours. To repair the damage it needs to be cleared in full. Otherwise it may come back to bite when you least won't it too.

jellie

scoops82 wrote: »

Well they sold it to Experto Crefit and have it back again so I can only assume its back with them. SO the fact she has a new credit card and is building up her credit rating again means its improving?

Im assuming that there is no way of avoidfing the debt? Just paying it off monthly seems to be the best approach as there is no interest.

They probably took it back so they could apply the PPI refund. It could well get sold again, you could keep paying until it is sold and then offer a reduced full and final payment to settle.

Anthorn

I went to partial settlement when offered which got the debt collectors off my back and then to full settlement later. So in my own personal experience each works in tandem with the other.

scoops82

They are not really chasing the debt though, or adding interest?


I'm surprised at how laxidaiscal they are being about it all!