Full and final settlement help.

Welshie28

Hi all,

Was just looking for some advice from people who may have previously offered a full and final settlement figure and had it accepted or maybe people who know more about it.

So, I have £18,000 debt at the moment.
£13500 to HSBC and £4500 to Hitachi Finance.
I pay £304 per month to Stepchange to deal with this for me however received a letter today from HSBC advising me that they are passing my debt on to their repayments services team.
After looking at different websites, I worked out that by using their logic, I should offer £6000 to HSBC in F&F settlement and £2000 to Hitachi. My dad has offered to lend me money on the basis that this is accepted by the lenders.
From people's experience, are these offers to low? Acceptable?

Any help would be greatly appreciated.

sourcrates

Hi,

Its so difficult to advise on settlement figures, as so many different options come into play.

As a general rule of thumb, you are unlikely to get a very big discount from an original creditor, they have neither the time or the inclination to get into in-depth negotiations with you.

On the other hand if the debts been dormant for a while, and recently picked up by a specialist debt purchaser, then a big discount is quite likely to be on the cards, they will of paid pennies in the pound for your debt, and will be fairly willing to take your offer of payment.

Its all about timing in this game, it really is.

fatbelly

If you think they will settle for 45% then you should start lower, to allow room for negotiation.

You have 5 years to go on your plan.

I doubt those 2 creditors would accept such a hit in those circumstances. You may struggle to get them lower than 60%.

Marktheshark

Have you explored bankruptcy ?
12 months to a clean slate and 6 years for a clean credit rating.

fatbelly

... and a 3-year IPO. Not a huge advantage, particularly if the defaults are a few years old.

But if circumstances change then everything's worth looking at again.

Welshie28

Marktheshark wrote: »

Have you explored bankruptcy ?
12 months to a clean slate and 6 years for a clean credit rating.

I have looked in to bankruptcy but it's to frightening for a start, plus I work in finance so it wouldn't go down well with that.

Welshie28

sourcrates wrote: »

Hi,

Its so difficult to advise on settlement figures, as so many different options come into play.

As a general rule of thumb, you are unlikely to get a very big discount from an original creditor, they have neither the time or the inclination to get into in-depth negotiations with you.

On the other hand if the debts been dormant for a while, and recently picked up by a specialist debt purchaser, then a big discount is quite likely to be on the cards, they will of paid pennies in the pound for your debt, and will be fairly willing to take your offer of payment.

Its all about timing in this game, it really is.

Thank you Sourcrates.
Am I right in thinking that a lender may only accept a F&F if it's been passed on to a debt purchaser as my HSBC account has been?
Do I need to make the offer via letter or phone call?

Thanks.

fatbelly

Welshie28 wrote: »

Thank you Sourcrates.
Am I right in thinking that a lender may only accept a F&F if it's been passed on to a debt purchaser as my HSBC account has been?
Do I need to make the offer via letter or phone call?

Thanks.

No but you stand a better chance of getting a better deal.

If your HSBC account has been bought by a debt purchaser then you no longer owe HSBC anything (you now owe the purchaser)and my earlier advice about not getting a better deal than 60% does not apply. You may well get 45%.

You make your initial offer by letter, finalise the detail by phone if necessary then get them to confirm the deal in writing before you part with your money

Welshie28

fatbelly wrote: »

No but you stand a better chance of getting a better deal.

If your HSBC account has been bought by a debt purchaser then you no longer owe HSBC anything (you now owe the purchaser)and my earlier advice about not getting a better deal than 60% does not apply. You may well get 45%.

You make your initial offer by letter, finalise the detail by phone if necessary then get them to confirm the deal in writing before you part with your money

Hi Fat belly,

Thanks for your response.
As the debt is now being managed by HSBC repayment services, are they classed as a DCA or are they still HSBC?

When writing my letters, do they need to be hand written or can they be typed and then signed with a pen?
Lastly, what percentage would you advise that I offer given the debt I have and the fact that they may want to negotiate?

Thanks for your help.

fatbelly

Welshie28 wrote: »

Thank you Sourcrates.
Am I right in thinking that a lender may only accept a F&F if it's been passed on to a debt purchaser as my HSBC account has been?

Welshie28 wrote: »

As the debt is now being managed by HSBC repayment services, are they classed as a DCA or are they still HSBC?

When writing my letters, do they need to be hand written or can they be typed and then signed with a pen?
Lastly, what percentage would you advise that I offer given the debt I have and the fact that they may want to negotiate?

Thanks for your help.

A debt purchaser is a third party that buys a debt. You would be notified, hopefully by both organisations, that the debt has been assigned (sold) to a new company.

A DCA is a Debt Collection Agency that is appointed by whoever is the owner of the debt, to chase payment.

HSBC haven't got around to either of these things yet from what you say.

It doesn't make any difference how you produce the letter as long as you keep a copy.

If you're aiming to settle at 45%, I'd start at 30% but I can't see HSBC coming down much at this point.