Lump sum to pay off everything! Woohoo

beks_uk

I have sold my house and with the profit aside from using half for deposit on my next house I also have enough to pay of £20k in credit card and catalogue debt. Shall I just pay off the balances or is it worth calling them to see if I can get a settlement figure? 

Karonher

If you are up to date with payments I doubt they will do anything. If you have defaulted and are paying a lower amount it may be worth it. If you choose to default, it will ruin your credit record. Clearly, this will not be an issue if you have already defaulted.

Suseka97

To be frank, you need to provide a little more background if people are going to be able to offer good advice.  As Karonher has said, if these debts are old and you've been in some sort of payment plan, then offering a settlement figure may well be the way forward.  If these are current debts and up until now you've been paying the contractual minimums, at the least, then they have no motivation to agree to any form of settlement. 

Matt8888

I think you should pay exactly what you owe. I completely sympathise with people struggling with debt and the mechanisms to help them. But you are clearly not in that position. When people don't pay what they owe, we all end up paying one way or another.

cymruchris

I would answer your question as: Pay off the balances.

Credit isn't something you take out, enjoy the products and then pay half back when you're loaded again. There are very specific circumstances when it does happen when people are at their absolute lowest point, with no income, no savings and nothing left to sell, and some of those end up in bankruptcy, but if you've got the money in the bank to settle it all, do so, and move forwards in your debt-free life (and do the best you can not to saddle yourself with any more in the future if you can avoid it!)

Brenster

Matt8888 said:

I think you should pay exactly what you owe. I completely sympathise with people struggling with debt and the mechanisms to help them. But you are clearly not in that position. When people don't pay what they owe, we all end up paying one way or another.

Could not agree more !!!

Ebe_Scrooge

I agree with all of the above comments.

1.  Morally, of course you should pay off what you owe

2.  Unless you've already had several missed payments and are clearly in dire straits, then the lenders are highly unlikely to agree to a reduction anyway.

3.  Probably the most important one - "using half for deposit on my next house".  I (rightly or wrongly) infer from that statement that you'll be wanting a mortgage in the near future?  If you fail to repay what you owe, and do somehow manage to come to an arrangement with the lenders to pay a lesser amount, then you can kiss goodbye to any chance of getting a mortgage for the next 6 years.

sourcrates

Depends on your circumstances, if the accounts are all live and running, then the full balance`s will be required.

If on the other hand the debts are all old, long since defaulted, and been sold on a few times, then you should negotiate for the best deal you can possibly get.

Suseka97

Ebe_Scrooge said:

3.  Probably the most important one - "using half for deposit on my next house".  I (rightly or wrongly) infer from that statement that you'll be wanting a mortgage in the near future?  If you fail to repay what you owe, and do somehow manage to come to an arrangement with the lenders to pay a lesser amount, then you can kiss goodbye to any chance of getting a mortgage for the next 6 years.

I agree with most of what you say - except that, for anyone out there who may be in some sort of arrangement to pay, or have cleared debts through negotiated discounts, it should be noted that it does not mean you will be unable to get a mortgage for 6 years (referring to the length of time a default remains on your file, whereas AP/ARs can sit there for far longer).

It does probably mean you won't get one with a mainstream lender, or get the more favourable rates - but there are brokers who are specialists in helping people with adverse credit histories, who can and do help people get a mortgage.

Just saying this for clarification to others.