Partial Settlement or Long Term Payment Plan for defaults?

lemonpeach

Hi everyone,

I’m hoping some people with secure knowledge of all things credit can help me out.

At the end of 2018, I defaulted on a bunch of credit lenders - I’ve accepted the consequences and have managed to pay off about £4K in 2019. However I have so many lenders that I’m making tiny payments to each (in comparison with the amount owed).

As I’ve already defaulted, would it be wise to make settlement offers? Or is it better to just pay off the full amount even if it takes me another 3/4 years?

Obviously my credit rating is a total sh*t storm right now which I’ve accepted, but I’m worried that having a partially settled debt would make it worse? My defaults are 2 years old so I’m then worried that a settlement offer would add a newer hit to my file.

Thanks in advance!

Willing2Learn

Hi lemonpeach and welcome to the forum

You have done well to reduce your total debt by £4,000 last year.

When you say pay off the full amounts in 4 years, does that mean all your accounts repaid in that timescale? If so, then your creditors are unlikely to accept an offer as they know they will get the full balance paid relatively soon.

If you were to reduce your payments then you might find your creditors would be more likely to accept offers next year. How much do you owe in total and to how many different creditors?

sourcrates

Hi,

It makes financial sense to you to settle if you can afford to do so.
However, you describe them as "lenders", original creditors, may, on occasion offer a small discount to settle an account, but the big discounts are normally offered by debt purchasing companies, such as Lowell, Cabot, Arrow Global, and the like, have any of your debts been sold on yet ?

lemonpeach

I could pay off the full total of debt but yes it would take about 3 years or so.

There are a couple of companies with whom I had a repayment plan that failed and have now made settlement offers. I’m just wondering if it’s best to take them or restart a payment plan?

Thank you!

lemonpeach

Yes quite a few although not all have been sold on (Cabot, Lowell)

sourcrates

lemonpeach wrote: »

Yes quite a few although not all have been sold on (Cabot, Lowell)

Its the defaults that negatively effect your credit file, they will show for 6 years regardless of what you do, so wether you choose to settle an account, or to pay it long term, neither option will have any effect on your credit file whatsoever.

lemonpeach

Thank you! That’s what I wasn’t sure of. Cheers for the clarification