MBNA Credit Card: they'll accept 50% to settle, but not F&F - advice please!

k993802

Hi,

I've just got off the phone to MBNA to discuss the full and final settlement of my credit card account.

I have been on a DMP that covers 13 creditors since Nov06. MBNA said that they would accept the 50% settlement offer on the basis that it IS NOT a FULL AND FINAL SETTLEMENT. It is only a partial settlement. MBNA said that the account would be closed down and they would not persue me for the balance, but a 'partially settled' comment would remain on my credit file for 6 years.

Firstly, I thought that even if a creditor agreed to a 'full and final settlement' it would remain on your credit file for 6 years, so I can't see the problem with 'partially settled' staying on my file for 6 years...

Then, there is the issue with a 'partial settlement'. Previous posters have been referred to other user's posts where nightmare scenarios have occured involving debt collectors further down the line. MBNA today stated that they would express in their acceptance of offer letter (that they will be sending out this week) that the debt would no longer be persued should I settle.

If the letter from MBNA (yet to be recieved) clearly states that I will not be persued for the balance, should I still be anxious about settling under these terms?

And thoughts/advice would be greatly appreciated.

Thanks in advance!

PS Aug07: HSBC settled £7500 credit card for 30% of balance under 'full and final settlement' wording! - v.pleased with that...

PPS: Before anyone asks...my DMP is managed by CCCS equivalent (sort of) company - my work pay an annual lump sum to a company to provide confidential advice to its staff (at no cost to the staff) on all manner of problems.

RAS

Hi

It might be worth sending a PM to dragonlady. She posted recently that she had not seen a CCA for an MBNA account that met the regulations and was enforceable. That would be a lot cheaper than any offer.

And certainly do not accept partial, as they will not pursue, they will sell it on and the DCa will pursue it.

k993802

Thanks for the tip RAS,

But although I agree that disputing a Consumer Credit Agreement (CCA) could well cost less to clear the debt, I am looking to clear it with minimal disruption to my life and having some funds made available to me by family members in order to clear off debts would be a less stressful remedy - I'd rather avoid court cases that could be prolonged and the subjective rulings that could occur depending on the judge.

Does anyone else have any experiance positive/negative in accepting these 'partial settlements'?

If I can get MBNA to agree to write in the letter that they will neither persue me for the balance, nor sell the balance on to a third party to collect from me it would be a far less risky thing to settle without those words 'full and final'...?

Somerset

My O/H did this 4 years ago with Mbna. They called it 'a short settlement'. My understanding is it settles the debt in full ie the balance can never be chased by them or anyone else BUT the 'short settlement' entry appears on your credit report ( it did O/H's anyway ) and basically warns anyone looking that this individual couldn't meet their obligations but did a 'deal' to settle. My O/H ran it past a debt counsellor who said it was ok - it was effectively a F&F but left your credit report damaged .... as if O/H's didn't already look like a diaster zone !!!!!

k993802

Ahh thats great info Somerset, thanks for that. MBNA also referred to my potential payment as a 'Short Settlement' too.

LoL! and I know what you mean about the credit report - with 13 seperate creditors all adding their own default statements, mine isn't going to be much use for the next 6 years anyway!!