what to offer full and final settlement - debt from financial abuse

Lifebegins123

hi, this is a first time post and am seeking some advice on settlement offers so apologies if it's too long just getting all the detail in. I have been left with approx £42K debt in my sole name due to financial abuse. All banks are aware of the domestic abuse and have been very supportive - i stopped making full payments in September 2020, contacted them all and defaulted on various dates in 2021. None of the banks have transferred my debt to collection agencies as yet although Nationwide debt repayment is collected via ARC. I've broken it down as follows:

NatWest 2 x credit cards approx £13K - pay £1 a month each.
MBNA CC £13.5K- have never made any payments since Sept 2020 as they said i had insufficient funds and never been contacted since.
Sainsburys Bank CC - £6.6K - pay £1 a month
Nationwide £8.5K loan - pay £10 a month collected by ARC
EDF - pay £10 a month

I did speak to StepChange and Business Debtline initially for help with this which they gave but i had to negotiate token payments directly with the banks and send I&E statements due to my circumstances with business assets - these have now been sold.

Up until I left my marriage, I had never missed a credit payment and so I had hoped to pay off all the debt from divorce settlement then take over my mortgage with Santander in my sole name (which I've been paying for over 3 years by myself) and start afresh. Unfortunately, there is a lot less in the settlement than previously anticipated so i'm going to have very little left to pay off the debt and get my ex off the mortgage so I can finally be free of abusive relationship. I had previously spoken to Santander, who are also aware of my DA circumstances and they thought I had a good chance of being able to take over the mortgage if all the debt was paid off - my only hope now is that I am able to partially settle the debts and then see if Santander will permit me to solely take on the mortgage. I should say here it's really important for my family to stay in their home - my children have been through hell and back including being subject to physical abuse themselves. One also has autism so having to move and possibly go into rented accommodation with no security is something I want to do my utmost to avoid at all costs as I know i won't get a mortgage with another lender at present.

So, I have just over £8k cash to offer which is about 19% of the total debt. Does anyone have any experience or advice on whether this is feasible? And how I should go about making offers? I have crime number, copies of police protection orders, non-molestation orders etc as supporting evidence also.

your advice is very much welcomed. thanks 

RAS

In your situation, I'd suggest you start by asking for complete write offs on the grounds of the domestic and financial abuse, adding in your son's additional issues. Several other people have succeeded.

sourcrates

Agree with RAS, keep your 8k, its better off in your pocket than theirs.

Creditors already know your circumstances, it`s not a great leap of faith to get them to agree writing off your debts entirely, due to the situation you find yourself in, write and ask them, further information here -

Fact Sheet - Write off debt | Debt write off | National Debtline | National Debtline

Lifebegins123

Thanks for answering so promptly RAS. Is there any risk to asking for write-offs? Because I have equity in my home? It’s about all the money I’ve got. 

sourcrates

Ahaze said:

Thanks for answering so promptly RAS. Is there any risk to asking for write-offs? Because I have equity in my home? It’s about all the money I’ve got. 

No risk whatsoever, you only tell them what they need to know to gain your objective, stick to facts that support your case, don`t offer information not asked for.

We have had success recently with posters obtaining debt write offs for many £1000`s of pounds.

Lifebegins123

Thanks Sourcrates. What about the £8k I have to pay some off? Will they not want to know about what I’m using that for? Do they ask to see bank statements?  And what happens on my credit file if they write off the debts? Do they show as settled/partially settled/something else? I’m thinking about taking the mortgage over in my sole name next year. My finances have been exemplary since separation and I’ve been solely paying for everything so I want to do everything I possibly can to persuade Santander to agree. 

sourcrates

No sense telling anyone about the 8k, you need that more than they do.

They will likely want to see evidence, just show them what you are comfortable with, you`re under no obligation.

How are the debts marked currently on your file ?

If they are defaulted, then that will show for 6 years regardless of what you do, or if marked as an "arrangement", that will show for 6 years after you have either repaid them or had a successful write off.

Lifebegins123

I was thinking if they asked to see bank statements then they would see the funds in my account. I definitely could do with keeping the £8k but just don't want to do anything wrong.

And yes, I checked on my credit record today and they are all showing as defaults from between 2-2.5 years ago. Having now read through some of the posts on this forum, I'm surprised that they have not been sold to debt collection agencies. And I'm now worrying that this will make it more difficult to get them written off or to even agree a full and final settlement offer!

RAS

Good that they are defaulted, as that means in 4 years your credit record could be perfect regardless of whether you pay them off or not. 

Having been subject to financial abuse, it may be difficult but remember you are in charge of the process, and you certainly don't have to show them you bank statements. For now, put that £8k in a separate savings account, towards things like fees when you remortgage etc. They might work out you are mortgaged, but you don't have to tell them.

Ask each account holder to write-off based on financial abuse, reduced divorce settlement and continuing issues re your son.  

Come back here when you get the answers. Don't worry about letters telling you that lots of things may happen. In practice they rarely do.

Hopefully someone will hunt out a few write off threads and post links here.

Lifebegins123

Thanks RAS. It would be good to hear about the experiences of how someone has successfully been able to have debt due to financial abuse written off. And a good idea to set up a savings account for my £8k. Do savings accounts require a credit check? I looked online but can only see about basic bank accounts for those with bad credit.

Grumpelstiltskin

Put 'Financial Abuse ' in search at the top of this part of the forum and it throes up a number of threads.