Full and final settlement options.

00_55

Hi I am currently paying into a debt management plan through step change.  I started off with around 32K of debt, I pay around £1000 per month, so I have around 16k left to pay. My question is about full and final settlement I have raised the question on debt camel, but i’ve not yet had a response and I was just wondering if anybody had a similar experience to mine.

My debt is split over about five credit cards. two of them are just over £4000 and the others have a couple on each. From what I’ve read on debt camel, the chance of any full and final settlement being accepted is relatively slim as I am paying the debt off fairly quickly. I may have the option to borrow money from a family member and then pay them back.

I have read lots of the advice on here and with hindsight, I probably would’ve done things a little different at the beginning, but it is what it is and I can’t change it now.

any advice greatly appreciated. Thank you.

Mark_d

You're making good progress paying off your debts.  I wouldn't complicate things by borrowing from anyone else.  Just keep putting all your money into paying off your debts and you will be debt free before you know it.

Grumpelstiltskin

You say you can't change things now, but you could stop paying the debts, have they defaulted?

You could save what you are paying into the DMP and in a few months down the line make low F & F amounts.

00_55

Thanks for the replies. If I did borrow, it would be for the full (hopefully reduced) amount, which I would settle all the debt, then pay less in total to the family member. So, in theory if I could settle for £10k, I would pay back over 10 months rather than the 16 or so I have left.
only one defaulted. The rest appear to be still open accounts. I read that defaults can come later down the line, so I was looking into requesting that these get back dated if this happens as this seems to be something that can be done? 

Do you guys think the only way they would accept settlement figures is if I stop paying completely?

Grumpelstiltskin

Yes whilst you are paying they are not likely to accept a reduced  F & F settlement.

It's a pity you didn't stop paying at the beginning as they would have defaulted before you started your DMP.

Please don't borrow any more money from anyone else, it is not the way forward.

fatbelly

Have you tried doing cca requests? You can stop paying completely if they can't comply.

Ate the 5 cards from 5 different lenders?

00_55

No, not done CCA requests - I will look into it. 

Yes, the five cards are with different lenders, only one has been ‘sold’ to a debt agency. 

With regard to the borrowing, my thinking was for example: I owe £16k (ish) if I settle for £10k/£12k the total debt, how ever many per thousand I can save, reduces a month of payments. I wasn’t going to do it u less I can do the lot.

like I said, with hindsight I definitely would have done things differently, but like most people, you get caught in a panic and are just relieved to have some light at the end of the tunnel. I didn’t come across this forum until I was a good 8/10 months in.

part of me thinks as I only have 16 months or so to go, I may as well just grind it out and pay it off, but if there is some better way to do it over the remaining term, then I would like to.

sourcrates

The best settlement offers are usually made once the debt defaults, and gets sold to a 3rd party, who buys it for 20% of its face value, thus allowing them room to discount it to you.

As things stand you might get 10/20% discount, if they had been defaulted and sold you might be looking at 40/60% off.

I would CCA them all first and see where you stand.

00_55

thanks for the reply. Just been reading on CCA and this is definitely what I’m going to do. I’ll get it sorted over the weekend.

Grumpelstiltskin

If  you are  sending CCA requests you need to stop your payments.

So contact Stepchange and cancel your DMP, then open a savings account and put the money you would have paid into the account.

Then when you get F & F offers you have the money to use.

sourcrates

I tend to agree with grumple above, although creditors are obliged to respond to a request for information under sec 77 CCA, they don`t always do so if they are being paid.

One little quirk of the legislation means that such a request is considered to be a dispute, and as a result of that accounts are generally put "on hold" whilst its actioned.

This means no payment is necessary until they supply what they are supposed to under the legislation, no matter how long the hold period is for.