Settlement figure - advice needed please

ClaireLR

I've also posted this in anything else moneysaving but wondered if here might be a better place for it

Hi,

I am posting this on behalf of a friend.

She has a £1500 overdraft with Lloyds TSB. She wants to know if it's likely that she will be able to get a settlement figure from them to pay a smaller amount back but in full as she has come into some money.

She has phoned Lloyds but that have so far refused to budge. I she wasting her time or is there a chance they will accept a reduced amount? And if so where should she start, about £500?

Any advice appreciated

Thanks

bengal-stripe

Why should the bank agree to a lesser figure?

Certainly not before your friend has defaulted and the monies have gone to collection. Then her credit rating will be severely damaged for the next six years.

ClaireLR

I think her credit rating isn't to good anyway!

I didn't really explain it to well, she had the overdraft for £1000, she has paid endless amounts off it, I'm not sure how much, but with charges etc it stands at £1500.

So if she could work out what she has paid them and deduct that from the original £1000 she owes do you think there is a chance they would accept? Otherwise she is going to continue to pay them a small amount, maybe £10 a month, and it'll never be clear due to the charges and interest they keep adding.

Thanks

dexters_mum_2

Has she gone down the route of reclaiming charges before now?

I would suggest going into the branch and speaking to an account manager if her account is still with the bank and not with a debt collection agency.

Has she got an informal agreeement with them to repay the overdraft or is she just paying in £10 per month? How long has she been paying in the money?

If she can't get to a branch, I'd be inclined to write to the credit/collections dept and say she can offer an immediate full and final settlement of X amount and take it from there.

ClaireLR

Thanks dexters_mum

No as far as I know she hasn't reclaimed charges or anything like that yet. She did have an agreement with them re the £10 per month but I think this may have just been a verbal agreement which they then went back on. She's been paying £10 a month to them for as long as I can remember, probably at least a couple of years.

Do you think it would be best for her to go into the bank or just write a letter straight off?

dexters_mum_2

I would say start with a letter to the collections team saying in light of the ongoing interest and charges being added to the account and the amount of time the balance has been outstanding, would they accept £1000 in full and final settlement?

If they won't or refuse, she should go to see an account manager or possibly the branch manager at her branch, explaining the situation fully and saying the offer is fair considering the balance is probably made up of charges and this full and final settlement would help her (and the bank) come to an amicable situation prior to the test case being settled.

I would advise her to persist with offering a full and final settlement, even if they refuse on the first attempt.

DM

ClaireLR

Thanks a lot for all your help

I'll let you know how she gets on!