Reduced Settlement Offers

lixhul

Hi guys, posted here a lot as worried.

I have £24K in debt, 1 is nearing court, the rest no action yet. With the rest, I have been getting "offers" that drastically reduce the debt if I pay now.

Can I ask, are these worth going for? I cannot afford to pay, but if we arrange a reduced amount with monthly installments, is it worth doing?

Secondly, all of these accounts are defaulted. If I pay one off, will a new mark appear on my credit report, meaning I'll have to wait a further 6 years from that for it to clear, or is the last default mark the furthest a mark can be put? It'll be counterproductive for me to receive a new "partly settled" mark years later from when it defaulted (around 2 years).

Thirdly, why am I getting these offers? Is it best practice to accept them? I have received a sizable pay rise at work and can now start to get things a little in order.

Thank you. Advice is much appreciated!

WYSPECIAL

Check the details of the offers. They will almost certainly want the amount they are asking as a full and final settlement not monthly instalments. 

If you don’t have a lump sum of cash to hand it probably isn’t the solution for you at the moment.

You get them because the company that bought the debt, for less than you owed, would like to get the maximum profit they can as quickly as possible.

Post details and someone will advise.

DjangoUnchained

sometimes they make discounted offers when they know the debt is unenforceable. Have you requested a copy of the CCA? if they cant supply it they cant enforce it, quite common it seems.

fatbelly

What do you mean when you say one debt is nearing court action?

sourcrates

Defaults stay on file for 6 years regardless of any action taken, if you settle or partially settle, within that 6 year period, the defaults status will be updated to show this, if the default has already dropped off your file, then nothing more will show no matter what you do.

There are a number of reasons why debt purchasers make settlement offers, they originally buy the debts for a fraction of their face value, so to avoid having them on their books too long, they can afford to offer you a reduced settlement.

There can be other reasons as well, the debt may be statute barred, or unenforceable in some way, or it`s nearing the end of the tax year and they want to clear the decks.

Some companies such as Lowell, for example, will allow the reduced amount to be paid over time.

Can you elaborate on the one debt that is nearing court action? 

lixhul

DjangoUnchained said:

sometimes they make discounted offers when they know the debt is unenforceable. Have you requested a copy of the CCA? if they cant supply it they cant enforce it, quite common it seems.

Hi what's a CCA sorry? I do get the sense that an offer is a sign of weakness. One of the debts went straight to court threat with a final noticez these others an offer and nothing for over a year.

If I ask them for a CCA and they don't provide them, should I just ignore?

lixhul

sourcrates said:

Defaults stay on file for 6 years regardless of any action taken, if you settle or partially settle, within that 6 year period, the defaults status will be updated to show this, if the default has already dropped off your file, then nothing more will show no matter what you do.

There are a number of reasons why debt purchasers make settlement offers, they originally buy the debts for a fraction of their face value, so to avoid having them on their books too long, they can afford to offer you a reduced settlement.

There can be other reasons as well, the debt may be statute barred, or unenforceable in some way, or it`s nearing the end of the tax year and they want to clear the decks.

Some companies such as Lowell, for example, will allow the reduced amount to be paid over time.

Can you elaborate on the one debt that is nearing court action? 

So my 24K in debt is spread over 5 loans. 1 of the loans (Admiral Finance who passed it onto a company called AJJB for £6635) have been consistently sending letters and they sent a final notice around 2 months ago. No offers or anything, just pay or else. I completed the form and requested a written agreement with which has not yet provided and I haven't heard since. Last email was them informing action is on hold until I get it. It was the letter before court and I went on Camel Finance for that one.

The other 4 (2x Ratesetter and 2x Nationwide) total the other £18K, have produced offers of around 60% of the value. I have not heard from them since.

My last default was June. Thought it was a lot older than that but there we are. All 5 loans are now defaulted. I don't know whether to just hold on and do nothing until I need to.

I did receive a sizable pay rise (60%) and am financially stable now. I'm not sure how to tackle it. I was looking for a new mortgage but obviously that's shot for 6 bloody years! Obviously the defaults are there and that, I'd like to avoid a CCJ of course but at the same time pay if makes sense to pay?

RAS

If you have a mortgage already, you can usually review your current provider's deal and just transfer to the one you want without a credit check.

DjangoUnchained

lixhul said:

DjangoUnchained said:

sometimes they make discounted offers when they know the debt is unenforceable. Have you requested a copy of the CCA? if they cant supply it they cant enforce it, quite common it seems.

Hi what's a CCA sorry? I do get the sense that an offer is a sign of weakness. One of the debts went straight to court threat with a final noticez these others an offer and nothing for over a year.

If I ask them for a CCA and they don't provide them, should I just ignore?

CCA  is the consumer credit agreement. If they cant show you this then the debt is unenforceable in court until they can find it.   Until they can show it then  yes, ignore them, block their phonecalls, ignore their texts and sit it out

sourcrates

Without the required paperwork, that debt is dead in the water, they cannot proceed to court without evidence of your liability, and that remains the case until they do produce it, however long it may take.

Usually defaulted debts are quickly sold, and those companies, usually will offer you settlement terms at some point.

Occasionally a debt will go to a collector who also have there own inhouse solicitors, and they may choose to recover the full amount from you, rather than offer settlement.

Its the luck of the draw.