Settlement offers refused - need advice

ksagoe

Hi everyone

I have had a DMP with SC for 18 months now since a separation left me with all the debts of the marriage and have paid a chunk off (12k), but still got 4 years and £33k to go. I have been managing on my own but just today come across this forum and so fantastic to find others going through the same. The rest of my family are financially well off and although sympathetic, don't understand and I struggle when I see them all having holidays and things I cant afford. I came into a lump sum from the family home sale (now renting and unlikely to get a mortgage again) and made offers to settle my debts at 48% of the balance, but disappointingly only Nationwide agreed and the other counter offers were over 75% and I didn't have enough to go round. At the moment I have asked for the balance of the money back (£15k against £33k debt) and am going to try again in 6 months time. Does anyone know why my offers might have been refused - were they just too low and my regular payments are a better deal (£585 a month). I think I would have been better going direct to them with the offers too rather than through SC. I am also worried i might chip away at the lump sum because I will be tempted by a holiday. I would really welcome some moral support and advice.
Also - what is all this about defaults? How do I find out if the account is defaulted and is there a template letter for requesting a default if not?
Sorry to bombard with questions, but so great to find people who know! Thank you

sourcrates

Hi,

From your post I am suspecting all your debts are still with original creditors, would that assumption be correct ?

Settlement offers work best when you're debts have been defaulted, and sold on to debt collectors, this is because DCA's buy these accounts very cheap, so can afford big discounts, usually around 50-60% off is the norm.

Checking your credit file will show you which accounts are defaulted, creditors should default you after approx 3 months of missed or less than contracted payments have been made, but it dosent always happen that way.

Best way to get a settlement accepted is to stop paying until the debt gets sold, and wait for the DCA that buys it to send you a discount offer, which they will.

ksagoe

Hi
2 are with Wescot. Barclaycard has just been transferred to a company called Link and the other is with the Cooperative who refused point blank to consider an offer.

Do you mean stop the DMP?

sourcrates

ksagoe wrote: »

Hi
2 are with Wescot. Barclaycard has just been transferred to a company called Link and the other is with the Cooperative who refused point blank to consider an offer.

Do you mean stop the DMP?

Well it depends on your goal.

Wescot and Link will just be managing those accounts (Link buy debts too so that one may of been sold, check your correspondence from them) sometimes you have to manipulate the circumstances to your advantage, if you wish to settle each account for as little as possible, then you have to try to make that happen by doing as suggested above.

If on the other hand you are happy to carry on as you are, then do so.

I would not recomend one approach over another, but as long as you know the facts and what's involved, then you can make your own decision.

fatbelly

Whoever holds the account they are unlikely to accept your first offer. That's just the way it is

The National Debtline factsheet is useful but for the practical 'who accepts what and at what level' this thread is the best source of info

https://forums.moneysavingexpert.com/discussion/115430

I didn't understand 'At the moment I have asked for the balance of the money back (£15k against £33k debt)' - did you just send your creditors lump sums without any deal being arranged?

OK - I understand - you paid it to stepchange.

Better doing it direct yourself IMHO