Full and final settlement advice

kendodebthelp

Hi all!

I’m looking for some advice on making Full & Final settlement offers to my creditors. I currently have around 7 defaults on my credit file, all roughly 5 years old. I’ve been paying them through a StepChange DMP, and for the last few years I’ve been paying around £60 per month (I used to pay £120 before my circumstances changed). At this rate, I’m not due to finish the DMP until 2034, which feels like a very long way off.

I’m starting to think ahead towards hopefully getting a mortgage in the future, and a family member has offered to help me by giving me some money to clear a portion of my debts. It’s not enough to clear everything, but it could make a dent so I’m wondering about making Full & Final offers.

My current balances are:

• PRA Group – £3,623.83

• PRA Group – £1,290.62

• Moorcroft – £943.05

• C.A.R.S Ltd – £242.94

• PRA Group – £168.52

• C.A.R.S Ltd – £20.64

Total owed: £6,228.60

What I’d really like to know is:

1. Would it be realistic to offer around £2,000–£3,000 total as Full & Final settlements and have the creditors accept, given:

   • The age of the defaults

   • My low monthly payment

   • the long remaining DMP term

2. If I settle them as “partially satisfied,” will this reset the defaults or make them stay on my file longer?
   (I’m hoping not, as they should start dropping off soon.)

3. Once the defaults drop off, does a “partially settled” marker cause any issues for mortgages or credit applications in future?
   I’ve read mixed things, so I’m trying to get some clarity.

Any advice or experiences would be massively appreciated. Thanks in advance!

fatbelly

Your plan seems ok as i can see that you would want to avoid a fresh mark on your file, like an insolvency one

All ENTRIES are removed from your file 6 years after they are defaulted or settled, whichever comes sooner

Add as step one:

Make a cca request to each creditor to find out if they are enforceable

Also

If they are enforceable, start below where you want to end up, to give yourself some room to negotiate

Aim to clear ALL the debt with your £3000

ManyWays

Once the defaults drop off, does a “partially settled” marker cause any issues for mortgages or credit applications in future?
No, because no one can then see the partially settled marker. 
When you have had debt problems in the past, it is always sensible to apply for a mortgage through a broker and tell the broker the lenders you have previously had problems with, as it makes sense to avoid them, whether the debt was settled in full or partially. 

tigergambit

1. Yes, but your initial offer should be much lower (around 20%) to give room for negotiation.

2. No. Defaults remain with same timescale.

3. No. See Many Ways explanation above.

kendodebthelp

Thanks, everyone! It sounds like submitting some Full & Final settlement requests would be a good idea, especially starting a bit lower so there’s room to negotiate.

One thing I’m not sure about is the best way to actually do it. Should I go through StepChange to arrange the F&Fs, or is it better to contact the creditors myself using one of the template letters available?

sourcrates

Always do this yourself, and this is why.

If you get Stepchange to do it, you have to pay them the full amount of money gifted to you/or saved by you, for settlements, first, before any negotiations even start.

You would have no say, no control, no input whatsoever in any of it, Stepchange would only offer an equal amount to all of your creditors, as it is their mantra to treat all creditors the same, keep in mind where Stepchange`s funding comes from, and its quite likely offers will be declined under those circumstances.

National Debtline resources are best to use here, you start way lower than where you want to end up, make sure everything is agreed in writing using the template letter available from ND, remember, this is more of a marathon than a sprint, expect it to take some time to get the deal you want.

Rob5342

I agree with what's been said above. There are three golden ones in rules when it comes to full and final settlements:

1, Always ask for the Cca before making offers, if the CCA can't be produced then you don't have to pay anything at all.

2, Never involve Stepchamge, they will want to pay the whole amount you have to your creditors and will have no interest in reduced settlements.

3,Start low and play the long game, if offers are rejected then reduce your payments and try again in 6 months. 

tigergambit

Be prepared for this to take some time. The CCA request alone is likely to take 8 weeks. Use the intervening period to create an SOA showing minimal or no surplus that you can use to convince creditors that a F&F offers them the best way out.

Start as low as possible and be prepared to walk away for 6 months or more if things aren't going your way.

kendodebthelp

Thanks! is it always worth requesting the CCA? I’ve been dealing with the same companies since they took over the debts shortly after I defaulted, so I’d imagine they should have the agreements, but I guess it’s still best to check anyway?

sourcrates

kendodebthelp said:

Thanks! is it always worth requesting the CCA? I’ve been dealing with the same companies since they took over the debts shortly after I defaulted, so I’d imagine they should have the agreements, but I guess it’s still best to check anyway?

A very common mis-conception is that loan/creditcard agreement paperwork etc, is supplied with every debt purchased, well the truth is, it isn`t.

Debts are sold in bulk portfolios, many 100`s or 1000`s of accounts at a time, the lenders just want rid of the bad debts, as soon as possible, but the paperwork always stays with the original lender, time and time again we have to remind posters of this fact, its never a part of the sale process, and once the lender sells the debts, they only keep paperwork a maximum of 6 years in most cases, and that`s a maximum, some get rid of it much sooner than that.

Debt purchasers never hold the agreements, and always have to refer back to the lenders they bought the debt from in order to obtain it, or a re-constituted copy, so you, and others like you, have been paying these companies, who say they have bought your debts, regularly every month without asking for a shred of evidence to back up what they are telling you.

Legally they must provide evidence of your liability when asked for it, most people just don`t bother and accept what there told verbatim, you should always ask for evidence of your liability when a debt is sold, even if your not looking for settlement, at the very least you are exercising your legal rights, at best, you might not have to pay at all.

So never imagine or assume anything in this game.

fatbelly

sourcrates said:

kendodebthelp said:

Thanks! is it always worth requesting the CCA? I’ve been dealing with the same companies since they took over the debts shortly after I defaulted, so I’d imagine they should have the agreements, but I guess it’s still best to check anyway?

Debt purchasers never hold the agreements, and always have to refer back to the lenders they bought the debt from in order to obtain it, or a re-constituted copy, so you, and others like you, have been paying these companies, who say they have bought your debts, regularly every month without asking for a shred of evidence to back up what they are telling you.


So never imagine or assume anything in this game.

Also, once the debt seller has received the money from the purchaser, they tend to wash their hands of the whole thing.

There's no good reason apart from the ethical one, for them to be helpful and as we know, many are far from ethical.