Advice needed on full and final settlement offer please

I have been paying off 3 credit card debts, all of whom had been sold to debt collection companies, all accounts had defaulted before being sold on. One of the DC companies has sent me a full and final settlement offer for 50% of what I owe them. Whilst I appreciate this is a decent offer, I would have to ask a family member to help me out to take up this offer. I wondering if I could counter offer for less than 50%? If so, is there a reasonable % that the debt companies are known to accept/consider? The letter does state that if I do not accept the offer, my payments will continue and be reviewed again in 6 months. 

Also, I took advice from Debtline when I found myself in this situation and they advised me that I had to be fair to all creditors and not show any preference. If I was able to take up this offer, would this bring me a problem with the other creditor who has the other two debts?  

TIA


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Comments

  • tigergambit
    tigergambit Posts: 185 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Firstly, remember that this is an opening offer in a negotiation. You can counter with 10% if you like - they can only say no. It depends on how much it's for, the DC's policy, your circumstances, whether they can produce a CCA, how strong an argument you have, how much you're paying, etc etc. 

    I have negotiated 5 f&fs, all well below 50% but it depends on circumstances. If you are able to give more details someone will be along to advise you, but never take their opening offer.

    Your other creditor is welcome to make an offer too. Ask them.
  • Also, I took advice from Debtline when I found myself in this situation and they advised me that I had to be fair to all creditors and not show any preference. If I was able to take up this offer, would this bring me a problem with the other creditor who has the other two debts?

    If you are managing your own DMP you are in control. You can accept any offer you like. I would go lower than 50% , they can only say no or wait another 6 months. Maybe in 6 months you have enough money to make them an offer without the need to borrow from family member. 
  • fatbelly
    fatbelly Posts: 22,743 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Idlebysea said:

    I have been paying off 3 credit card debts, all of whom had been sold to debt collection companies, all accounts had defaulted before being sold on. One of the DC companies has sent me a full and final settlement offer for 50% of what I owe them. Whilst I appreciate this is a decent offer, I would have to ask a family member to help me out to take up this offer. I wondering if I could counter offer for less than 50%? If so, is there a reasonable % that the debt companies are known to accept/consider? The letter does state that if I do not accept the offer, my payments will continue and be reviewed again in 6 months. 

    Also, I took advice from Debtline when I found myself in this situation and they advised me that I had to be fair to all creditors and not show any preference. If I was able to take up this offer, would this bring me a problem with the other creditor who has the other two debts?  

    TIA


    Yes of course you can. Their offer was just an opening offer. They expect you to negotiate. They will have paid a max of 16% so even a 30% offer gives them a good profit.

    F&F deals are always available so I wouldn't advise borrowing money to fund them.

    Whoever gave you that advice ( National Debtline ?) is not correct. Preferences only matter in insolvency.



  • tigergambit
    tigergambit Posts: 185 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    edited 5 February at 8:29AM
    Start low. Very low. Most of the settlements I have made were under 25%, so I would be starting around 16% and see how they react. You can always use the other creditor as an excuse for having a limit. Be creative, but have a limit and stick to it. You can always try again in a year or so.

    If you do reach a good settlement you can always offer the same percentage to your second creditor. Covers you if you're worried, although there's no need to be.

    Edit: Remember they approached you, so they want to get it off their books for some reason.
  • Rob5342
    Rob5342 Posts: 2,389 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Idlebysea said:

    Also, I took advice from Debtline when I found myself in this situation and they advised me that I had to be fair to all creditors and not show any preference. If I was able to take up this offer, would this bring me a problem with the other creditor who has the other two debts?  

    There's no reason you need to do that, it's a negotiation between everyone. If you don't get anywhere with one try an offer with someone else, if they accept then the first will have to wait longer. 
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,348 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Before you even think about paying it off have you checked it is enforceable?

    Have you requested a CCA and if so have they provided it?

    Get that sorted first then if  it is enforceable start at 20%.
    If you go down to the woods today you better not go alone.
  • ManyWays
    ManyWays Posts: 1,164 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    Dont borrow from a family member. At the moment your debts are under control, no interest being added, if your finances get worse, you can reduce the payments to them. Adding in an obligation to a relative can make this much harder. If you cant get this down to an affordable amount (some creditors will allow you to pay an agreed amount over a few months) then its better to say No, let more time pass and try again later.
  • freshstart2023
    freshstart2023 Posts: 144 Forumite
    100 Posts Second Anniversary Name Dropper
    Yes you can negotiate, I also negotiated the payment terms. I was offered 50% if paid in full and negotiated down to 70% paid over 6 months then negotiated further to 80% if paid over 3 months 👍
  • Idlebysea
    Idlebysea Posts: 9 Forumite
    Name Dropper First Post
    Thank you so very much for all the great advice.  They have given me until the end of the month to let them know if I want to accept the offer. I can now digest all the great info you have given me and decide the next step. I am glad I came here for advice rather than make a hasty uninformed decision. I will update my thread once I have taken the next step. 
  • Going back to what I said earlier, have you checked it is enforceable?
    If you go down to the woods today you better not go alone.
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