Full and Final Settlements... how do they work?

**Amy**

I just wondered how you can offer a company a full and final settlement (a percentage of the amount you owe).

Do you have to be in arrears with your payments? What are the rules on this?

Sorry if it sounds dumb, just wondered if I am in a position to offer a !!!!!! on some of my debts?

Thanks

fermi

National Debtline have a very good factsheet on their website.

Link: Factsheet | Full & Final Settlement offers

Worth reading as a starting point.

CLAPTON

basically something like this

for obvious reasons they won't consider a F&F while you are paying the contractual amounts.

So:
you stop paying your debts at the contractual rate (i.e. less than the minimum amount)

you do this for several months

they harass you a little to try to get you to pay

they will probably default you account in due course

they will mark you credit report accordingly and trash your credit rating for 6 years

maybe you come to an agreement to pay reduced amounts for a time

they may seek a CCJ or if you are a home owner a charge on the property

they often offload the debt to a debt Collection agency (DCA)

and / or sell the debt to the DCA

after a year or so the DCA will probably be ready to do a F&F

the amount they will settle for depends very much on the circumstances (how much you are paying, the age of the debt)

**Amy**

Oh blimey...

Well i have defaulted on a CC payments on one CC and they are harrassing me so i just thought maybe if i offered them a !!!!!! it would get them to leave me alone!!

Dont think i want to go through the whole CCJ etc.

xxx

CCCS_Alan

HI **Amy**

F&F can be a very good thing if you have a lump sum to offer. Some creditors would rather take a lump some now rather than waiting years for it all to be paid off. You can normally offer F&F once you are in situation where you can not meet payments.

But is the lump some something you have saved, help from friends or family, or are you increasing existing credit to pay off other credit?
If you are just using existing credit to look at this option you may need to get some advice on your whole situation on how to deal with all creditors. Try our online advice facility called Debt Remedy where you can complete a financial statement and be provided with advice on the best way to deal with your situation.

If your creditors did look at going for a CCJ to set payments through the court it can normally be done through the post, and at the end of the day you can only pay what you can afford.

Hope this helps

CCCS_Alan

deliciosa

Hi,

I had a little debt (£98 ish) that i did not even know of, they started harrassing me and in the end I accepted a £65 F&F settlement, i paid straight away over the phone! Have I made a big mistake? Will they ever come back to chase me? This was about a year ago. I havent received anything in writing....