Debt Payment

mpf001

Dear all, I have debts totalling almost £20K. I have re-mortgaged my house for an overall better deal and added on the £20K in a bid to pay off the debts.

The debts are with debt recovery companies and would it be advisable to offer to settle the debt at an acceptable percentage say 60%. Will this affect my already poor credit rating adversely as a partial settlement?

Regards,
Michael

DCFC79

mpf001 wrote: »

Dear all, I have debts totalling almost £20K. I have re-mortgaged my house for an overall better deal and added on the £20K in a bid to pay off the debts.

The debts are with debt recovery companies and would it be advisable to offer to settle the debt at an acceptable percentage say 60%. Will this affect my already poor credit rating adversely as a partial settlement?

Regards,
Michael

I see a belated welcome to MSE is needed.

Your credit rating is only seen by you, your history is what lenders can see, it may effect your history.

You looked at your spending to cut back on what you soend ?
What caused the debts of £20k ?

mpf001

The debts are quite old and a result of house renovations undertaken with my partner who then decided to disappear and leave me with mortgage, bills and debts etc. I could pay the debts in full but wondered if the companies would accept less and leave me with a little to take the kids on a holiday this year.

PeacefulWaters

They might accept a low offer. They might not.

Start at 25% and see what you can achieve.

DCFC79

mpf001 wrote: »

The debts are quite old and a result of house renovations undertaken with my partner who then decided to disappear and leave me with mortgage, bills and debts etc. I could pay the debts in full but wondered if the companies would accept less and leave me with a little to take the kids on a holiday this year.

They might do, why not ask them.

jonesMUFCforever

To be honest I am amazed that any mortgage company would lend more money to you if you are in debt management.

poppasmurf_bewdley

mpf001 wrote: »

Dear all, I have debts totalling almost £20K. I have re-mortgaged my house for an overall better deal and added on the £20K in a bid to pay off the debts.

The debts are with debt recovery companies and would it be advisable to offer to settle the debt at an acceptable percentage say 60%. Will this affect my already poor credit rating adversely as a partial settlement?

Regards,
Michael

Once your credit file is trashed, it's trashed. It can't be slightly trashed. So any partial settlement will have no effect on it with the exception it may extend it somewhat depending on when other adverse items come off.

sourcrates

If the collection agency is just managing the debt, they will have to refer back to the original creditor as to what settlement offers will or wont be accepted.

Original creditors never offer much of a deal to be honest, on the other hand, if the debt has been sold to a 3rd party debt purchaser, then your chances of a good deal rise sharply.

Lowell, for example, offer anywhere between 20 and 80% off, dependent on the age, enforcability, of the debt etc, other debt buyers offer similar reductions, they buy the debts very cheap, so can well afford to discount.