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Advice with Full and Final Settlement Offers During Corona Pandemic
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7NX
Posts: 13 Forumite
Hello all,
My partner and I have had a DMP with StepChange for around 1 year. Most (if not, all) of the debts have been sold on to other companies. A few months before the Corona outbreak, one of the debtors had written to us to offer a full and final settlement at approx 75% of the outstanding amount. We couldn't afford this at the time, but it was good to know that they may be open to this kind of negotiation.
Fast forward a few month to where we are now: We've currently got a mortgage holiday due to the uncertainties around my main job, and have also temporarily stopped our StepChange payments (we made them aware of this). As it turns out, I may now be loosing my job, however due to my position and length of service, the redundancy package would be quite favourable (though still no where near enough to cover all existing debts in full).
My thoughts are, that surely with the current financial state of the economy, and likelihood that many hundreds of thousands of people will be loosing their jobs, the 'value' of these debts to the companies who bought them, has gone down even more so? (e.g. I would imagine NO ONE is buying debt at the moment, and would have a hard time selling any on). With this in mind, I am planning to write to the debtors to offer a full and final settlement figure, well below the outstanding balance. My questions are:
1. What might be an appropriate % figure to aim for?
2. What have people had success with in the past?
3. Should I mention the fact that I am being made redundant? Is this likely to convince them that accepting an offer would be the best likelihood of them recovering funds? Given the alternative could be an IVA route if I remain unemployed? (I run a small business that I plan to make my full time job, however any income will of course be uncertain).
4. Is there any other help / advice people can offer?
Many thanks in advance for your responses!
My partner and I have had a DMP with StepChange for around 1 year. Most (if not, all) of the debts have been sold on to other companies. A few months before the Corona outbreak, one of the debtors had written to us to offer a full and final settlement at approx 75% of the outstanding amount. We couldn't afford this at the time, but it was good to know that they may be open to this kind of negotiation.
Fast forward a few month to where we are now: We've currently got a mortgage holiday due to the uncertainties around my main job, and have also temporarily stopped our StepChange payments (we made them aware of this). As it turns out, I may now be loosing my job, however due to my position and length of service, the redundancy package would be quite favourable (though still no where near enough to cover all existing debts in full).
My thoughts are, that surely with the current financial state of the economy, and likelihood that many hundreds of thousands of people will be loosing their jobs, the 'value' of these debts to the companies who bought them, has gone down even more so? (e.g. I would imagine NO ONE is buying debt at the moment, and would have a hard time selling any on). With this in mind, I am planning to write to the debtors to offer a full and final settlement figure, well below the outstanding balance. My questions are:
1. What might be an appropriate % figure to aim for?
2. What have people had success with in the past?
3. Should I mention the fact that I am being made redundant? Is this likely to convince them that accepting an offer would be the best likelihood of them recovering funds? Given the alternative could be an IVA route if I remain unemployed? (I run a small business that I plan to make my full time job, however any income will of course be uncertain).
4. Is there any other help / advice people can offer?
Many thanks in advance for your responses!
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Comments
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The value of debt to the people that buy it will not change, they buy it for pocket change. I doubt the current situation will make them change anything. They are basically gambling when they buy the debts but a bit like a bookie the odds are in their favour.
That does not mean there is nothing stopping you writing to try to cover the debts and get a nice discount. Without knowing what the debts are for, how much, how long you have had them etc all people can do is pick a figure out of thin air.
Why did you take a mortgage holiday could you not afford the repayments?
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This is the major thread on these things
https://forums.moneysavingexpert.com/discussion/115430/full-and-final-settlement-help-thread#latest
At the start of the lockdown, there were some spectacular deals - you'll have to search the board. I'd try really low - maybe 15% -and see what comes back
You can mention the redundancy but don't mention an IVA
and see this
https://forums.moneysavingexpert.com/discussion/comment/77235854#Comment_77235854
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