Offered discount on debt?

everythingsfantastic

Hi - hoping someone can offer some advice.

I have one last debt to pay off, an old credit card debt that's currently sitting at just over £2500. It's from my old bank, but the debt has been bought by 3 different companies so far. I pay £5 a month towards it (I'm not working at the moment and so it's all I can afford.)

I received a letter today from the debt company offering a discounted settlement - to pay £750 and for the debt to be cleared, but to go on my record as 'partially settled.'

I don't know whether this is a normal thing to happen with a debt, or if I should do it to get it out of the way quicker than if I pay it off monthly. What difference would it have being partially settled over fully settled? I have been offered the money by a family member, and I would then pay them back monthly.

Help would be greatly appreciated

Thanks!

sourcrates

Hi,

Yes it’s very common for debt purchasing companies to offer discounts, anything other than full settlement will be a partial settlement, it’s normally the default that causes the damage so how a debt is settled is a bit irrelevant really.

everythingsfantastic

Thanks for your reply

So, is it worth doing? I'm hoping to get a mortgage in the near future and I want to help my credit rating as much as possible and just want to make the best choice.

macman

How old is the default?
Forget your credit rating, it's fictitious. What lenders see is your credit history, and a default will obviously limit your potential lenders and increase the rates offered.
But how are you intending to get a mortgage if you have no income and minimal capital for a deposit (since you would have to borrow to raise the £750)?

everythingsfantastic

The default is from 4 years ago. I'm just wondering if its better to have a partially settled debt or a fully settled debt, or if it doesn't matter at all.

The mortgage is something my partner and I are doing jointly and I have savings for this, I don't want to affect his ability to get a mortgage.

sourcrates

It’s the actual default that’s the problem, how it’s settled is really immaterial, in 24 months all trace will be gone anyway.

fatbelly

£750 on £2500 debt is a good opening offer at 30%.

There is probably a little room to go lower if you want to make a counter offer.