Settlement for Link Financial Outsourcing

TheSillyMun

I have been paying my debts with Stepchange since 2021, and I'm nearing the end by December this year, however I want to be debt free sooner!

I owe Link Financial Outsourcing £1,541.80 and I want to make a settlement offer. They have a webform on their website where I can input an amount I can pay and the source of the funds.

My fiancee has offered to send me some funds to help settle it, but I'm not sure what percentage I should be looking at; what's likely required in the process. Will I need to complete an I&E form with them? I can offer up to £500 from the 20th of next month, but is it worth being patient and just waiting for it to clear via stepchange over time? What's the lowest amount I could "get away with?" Because I don't want to drain my fiancee's bank account ideally, but I'm just so desperate to be debt free for the first time in a long time.

So gang, a debt that's 5 years old, the balance will probably be about £1300 by the time my Stepchange payment next goes out on the 1st of July. What should I be offering and what can I expect from the process?

Thanks in advance!

gwynlas

Stepchange do not like you paying debts off outside of plan.

Given things will be settled in six months you are very unlikely to be offerred a good enough settlement figure to make it worthwhile.

The other matter to not forget that if you agree a figure your file will be marked partially settled so you might be better allwing debt to becom settled

TheSillyMun

https://forums.moneysavingexpert.com/discussion/comment/82047462#Comment_82047462

Thanks for your well reasoned response. I'll hold on for now. It's my final debt with StepChange, so settling it outside of plan wouldn't be too much of an issue from a DMP standpoint, as that'll be the end, but I agree, it's probably better to wait, then maybe when I have 1-2 months left I can pay the remainder off in one go.

I'm so excited to be debt-free, and to be able to rebuild my credit carefully from then on.

RAS

It's unlikely any discount is going to be agreed if you contact them. If they contact you, counter offer a bit less.

If a default was issued on this debt, then it will drop off your credit record after 6 years regardless of whether you've paid it off or not.

If you have any spare money, put it into your emergency fund so you don't need credit or to become beholden to BF.

TheSillyMun

https://forums.moneysavingexpert.com/discussion/comment/82047490#Comment_82047490

Thank you RAS. That's a good point; it won't be long until the record expires anyway. Good idea on just saving any extra I might come across. I'll need a whole new skillset to not fall into debt again!

RAS

Yep, do a full SOA, with BF if you live together, and on your own.

And plan. You know Christmas and birthdays come round each year. How much do you spend? Put 1/12th into a budgeting fund (instant ISA?) each month. The same for holidays, insurances, replacement household goods etc.

And separately build an emergency fund. Enough to pay a deposit and a month up front if you rent or cover until UC kicks in if you lose a job or are sick.

Rob5342

Have you asked for the CCA? If they can't produce that then the debt can't be enforced and you can just ignore it.

Good discounts tend to take a bit of time and effort, for example making up a story about your income dropping and only being able to afford £10 a month and then your parents giving you £500 in 6 months or something (which you actually saved yourself by making reduced payments). It depends how you value clearing it quickly vs saving money on settling it.

Bear in mind that they will have bought the debt for 10% or 15% of it's value, so they have already made a huge profit out of it. Also settling a default won't make much difference to your ability to borrow, and the default will drop off 6 months after it was added no matter what you do.

Personally I would stop paying completely and ask for the CCA if you haven't already, save the money you would have paid them, and then offer £500 as a settlement once you'd saved enough if they did produce the CCA. Worst case they would eventually end up making a court claim, but by the time that happened you would have saved enough to clear it completely anyway.

ManyWays

Put yourself in Link's shoes: you are going to get paid by the end of the year. Why would you agree to settle at less than 75%?

And if you wait until two months before, it will probably be 95%.

What they bought it for is irrelevant. You are currently on track to repay it in full.

fatbelly

So if you want to try to save a bit, stop paying, do a cca and if they comply, offer 25% in F&F.

You will need to do this yourself and wave goodbye to stepchange

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82047687#Comment_82047687

They are obviously going to want to squeeze as much as they can out of people. Collectors do settle for reduced amounts, so why just give money away that would be far more useful to you.

What they bought it for is very relevant, they buy debts for a small fraction of their value, make their money back quite quickly and then spend years trying to squeeze as much as they can out of people. They've probably made a £6000 return on an £800 outlay, so why give them £1500 more without seeing if they'd accept less?

Whatever you do don't rush, and only make a settlement unless you are sure you can afford it otherwise you'll leave yourself short and end up needing to use credit again.

ManyWays

@Rob5342 I agree that that is generally the best approach, it does NOT apply when the debt collector can see the debt will be repaid in full in only 6 months!

No debt collector will consider the profit they are making on an individual debt, it is the profit on the overall book that matters. Many debts will be uncollectable at all. repayments on the other debts have to cover not just the uncollectable ones but the cost of the debt collector's operation.

So they want to try to maximise what they can easily get from each debt. And this case, the easiest thing is to sit back while the money runs in each month.

Advising people to take their time is the worst thing here. Either @thesillymun has to make a not small offer now, or they have to ask for the CCA and take the risk that will turn up after a few months. In4 months time they may not be able to get any offer accepted.