Help with a full and final settlement

SeeTheDoughnut

Hi all, my previous post has now been closed, but background is that I have several old debts that all defaulted years ago and have now dropped off my credit file.  I had been paying for years via Step Change, but was planning to make full and final settlement offers. 

I wrote to them all first to ask for copies of the original credit agreements. Most of them have responded to say that the debt is currently unenforceable. Brilliant!

One of them sent someone to the house and they put a card through the door. I called and said that I needed to see the credit agreement and have not heard from them since.

The final one is a Sainsbury’s Bank credit card, now with Link Financial. They wrote to me to say that they were putting the account on hold and would contact me when they found the agreement.  I then had a letter from them months later to say that they were passing the account to solicitors if I did not make an arrangement to pay.  I called and asked whether they had now found the agreement. They had and have sent me a copy.  My questions are:

1. The amount is £1844.31 - what is a reasonable amount to offer in settlement?

2. I don’t think that once a debt has dropped off a credit file that it can go back on there. Is this correct? I don’t want it to reappear as a partially settled debt, as we need to remortgage in 2028

Thank you in advance for your help knowledgeable people!

enthusiasticsaver

I think if it has dropped off your file I would be wary about opening that can of worms and trying to find a settlement figure. You can either keep paying through step change or just stop paying. 

SeeTheDoughnut

I haven’t paid anything since they put it on hold several months ago. I’m just worried that they have now said they will refer to their solicitor if I don’t come to an arrangement to pay. As they have sent me a copy of the original, signed credit agreement, could I end up with legal action being taken against me?

RAS

They can take legal action. I'm surprised they haven't offered a discounted settlement figure, though.

enthusiasticsaver

I think they are unlikely to take legal action for less than £2k but maybe @fatbelly or @sourcrates could advise?  An AP marker though could appear on your credit file and stay longer than the 6 years it takes for defaults to drop off. Sometimes  they just threaten legal action but I am not sure how aggressive Link financial are with debt collections these days. 

sourcrates

The vast majority of the time legal action is just a threat, but if they think you can pay, but aren't, then its a possibility.

Whatever you do, nothing further will go on your credit file, once the entry has gone, its never coming back.

If you want to, go in with a lowball offer, you can always increase it, going in too high leaves you nowhere to go.

bcs7

SeeTheDoughnut said:

1. The amount is £1844.31 - what is a reasonable amount to offer in settlement?

Having made offers to Link very recently, I'd say that unless your offer is very near the total, they're likely to counter whatever you offer anyway.
I've had one debt for about £1200 that I offered 25% and they countered with 90%.
And another debt for about £1600 that I also offered 25% and they countered with 55%.

SeeTheDoughnut

I’m happy to offer a settlement amount, but can I do that on the condition that it does not re-appear on my credit file? What sort of percentage is likely to be accepted? 

sourcrates

It will not re-appear on your credit file.

The reporting period for defaulted consumer credit accounts is 6 years, after that it is automatically removed and NOTHING you do will bring it back.

Settlement negotiations take time, many months to get the right deal, as advised, go in low, and see what they say, you can always counter offer, if they ask too much, wait 6 months and go again.

fatbelly

Absolutely agree with the above. Offer 25% and see what comes back. Let us know on this thread

bcs7

SeeTheDoughnut said:

I’m happy to offer a settlement amount, but can I do that on the condition that it does not re-appear on my credit file? What sort of percentage is likely to be accepted? 

They're going to want to try and get as much out of you as possible so unless you offer very close to the full amount, they're likely to counter anyway. As fatbelly and sourcrates have said you may end up bartering a bit to bring the amount down.

I've only just started mine, but I'm not going to accept the counters and just try again later this year.

With Link they've recently added settlement offers as an option on their online accounts so you can do it in seconds. All they ask for is the amount your proposing and how long till you'll be able to pay. I got an email back within a couple of days saying a counteroffer had been made and to log into my account to see it. Then you know what percentage discount you're being offered and can decide whether to take it or wait to make another offer later.