full and final settlement %'s

geeka

hi everyone, just a quick question.
any idea what % credit card companies settle on (see below)?

MBNA - 8k
Barclaycard - 3.5k
Halifax - 10k

any idea would help greatly.

cheers

hw123

Hi, Different credit cards have different discretions the best advice is to start at a low % like 35p to the pound, then work from that. set yourself a limit before you start and contact them.

hope this helps

Good luck

reventon

Is this only for people on debt management plans etc, or can anyone ring their credit card company and haggle ?

hw123

any body can go for a full and final, make sure you get the offer in writing before you sign anything and make sure it is a full and final settlement not just a final settlement, as this means the creditor can sell the remainder of the debt on to debt collection agencys, then they can chase the rest of the debt.

geeka

i am on a debt management plan, can i just get rid of two of the three creditors and then up what i pay to the other?

Sassamac

thats interesting I always assumed it for people on DMPs.
So how does it work? Do you just pay the minimum payments and save all your spare cash til you have a fair amount of the total and pay it in one lump sum, instead of overpaying as you go? Does it affect your credit rating?

hw123

geeka wrote: »

i am on a debt management plan, can i just get rid of two of the three creditors and then up what i pay to the other?

you could yes! who is the company dealing with your DMP? they may be able to help you with the full and final settlements.

hw123

Sassamac wrote: »

thats interesting I always assumed it for people on DMPs.
So how does it work? Do you just pay the minimum payments and save all your spare cash til you have a fair amount of the total and pay it in one lump sum, instead of overpaying as you go? Does it affect your credit rating?

that is one way of doing it yes, but generally this is done if you come into any monies, instead of showing up on your credit file as settled it will show up as been satisfied, also you will have to make sure that the part of the debt you didn't pay is not placed on the credit file as been still owed again you must get this in writing that you credit file will be clear.

Sassamac

thanks hw, that helps.

We are owed about 2 or 3k by tax credits and expecting a lump sum in May which will obviously go towards paying off the CC's. Our biggest debt is 3.7k on one card, Im wondering whether we could offer them a f&f of whatever TC end up paying us.
Also that particular CC is with our main bank (current acc, savings accs, CC's and OD), would this cause a problem? would we be asked to bank elsewhere

IWantToBeFree_2

I was under the impression that they normally only accept reduced F&F settlements if you have defaulted etc as its a way of getting some cash back from a potentially bad debt...

I have never defaulted on any payments and when I rung Egg & Halifax a few months ago to ask for F&F settlements on my loan, they offered no discounts at all, because as they see it, they aren't going to have trouble getting money from me going forwards so why take less now?

maddysaver

Sassamac wrote: »

thats interesting I always assumed it for people on DMPs.
So how does it work? Do you just pay the minimum payments and save all your spare cash til you have a fair amount of the total and pay it in one lump sum, instead of overpaying as you go? Does it affect your credit rating?

Some of the info you've been given here is, with respect to all concerned, a little misleading.

CC companies / Loan Companies / Banks will only accept F&F settlements of less than the amount owed under various circumstances and if you currently are paying them off (or paying at least the minimum payment) each month and have not missed payments / defaulted / gone on a DMP they are most unlikely to accept any offer because as far as they are concerned you can afford to pay them as normal.

If you default because you can no longer afford to pay the bills then you would have to go down various avenues first (one of which might be to take advice on beginning a DMP) and they would want to see income/expenses sheets from you. Then possibly if you had been on a payment plan of some kind with them or their Debt Collection Agency for some months and approached them with an offer they *might* accept something less than full payment.
All of the above will definitely trash your credit rating and affect your bank account if you also have a current account with any of the establishments concerned.

Those are the facts of the matter - trust me - I've been there and done it (and am currently trying to negotiate with creditors who are trying not to accept less than 95% despite us being on a DMP for 4 years and despite them having to wait another 10 years if they want it all at the rate we pay them monthly)...

I hope that helps. (and apologies to the Geeka - I can't help although I am in negotiations with Barclaycard and MBNA who are both playing hardball and wanting 95 or 100%!!)