Negotiating A "Realistic Repayment" Advice Needed

Sil_2

I have received a letter today in relation to an outstanding credit card debt I have. The letter states that I should contact them to make a "realistic offer of repayment" but I'm not sure exactly how much that would be so I am looking for any advice as to what a reasonable repayment fee would be and also for any negotiating tips. The balance on the account is £629.14 although only £340 was ever spent.

stapeley

Who is the letter from please ? Is it DCA or the card company/ Who ever it is don,t phone them.

Sil_2

stapeley wrote: »

Who is the letter from please ? Is it DCA or the card company/ Who ever it is don,t phone them.

It is from a debt collection agency. The letter is threatening a "doorstep call" although I have had similar letters in the past and I ignored them but now I want to clear the debt.

Sil_2

Anyone ?

Clariman

If you are making an offer to pay a reduced amount, the lender would normally expect to see a Statement of Affairs (SOA) which details all your income and expenditure. You may find this Guide to Problem Debts useful.

Clariman
Disclosure. The guide linked to above is hosted on a website that I run, but the guide was written by a Debt Expert and MD of a a Debt Collection Agency (business debt not personal debt). Although a debt collector by profession he spends a lot of his time advising people on managing their debts (he does it on the Motley Fool's equivalent of this board).

maytaurus

have a look here
http://www.creditaction.org.uk/debt_advice.html
and
http://www.adviceguide.org.uk/index/life/debt/debt_fact_sheet_index.htm

PinkLaydee

Yes, I agree: SOA is what they require. National Debtline helped me with mine and have a really nifty calculator.

Incidentally, if you negotiate a new minimum amount a month (below the one they want) and then still owe money for a year or so, they review you every so often. I find that even saying £1 more a month at each review gets them off your back (provided your SOA hasn't changed)... the telephone operator usually just wants to get onto the next call and even as little as £1 can be accepted by 'THE COMPUTER'.

Sil_2

Do I have to pay the full amount of balance or is there room for negotiation as to how much I will actually pay back?

PinkLaydee

I might have misunderstood what you meant. Apologies if that is the case.

If you can't afford the minimum payment payment on a credit card each month, you can ask to freeze the interest and negotiate a lower amount (offer). Then you can pay it off quicker and more realistically for your budget. You still have to pay the whole lot... and it can take a while. BUT you may get a default to your credit file. If you can afford not to go down this route DONT DO IT.

If you DO go down this route you will get reviewed every 3-6 months. But I have found that my increasing my offer by just £1 gets them off my backs relatively painlessly. Hope this helps.

Clariman

Sil wrote: »

Do I have to pay the full amount of balance or is there room for negotiation as to how much I will actually pay back?

First and foremost they will want to see a copy of your income and outgoings (the SOA) before agreeing to anything. They can then make their assessment about whether what you are offering them each month is reasonable or not. If you are spending £500 on going out each month and another £400 on clothes, they probably wouldn't accept a reduction. But if it is clear that your expenditure is reasonable then they may accept lower monthly payments.

Beyond that, you may want to negotiate on paying them less in total than you owe them and hope that they write off the debt. To do this, they would still need an SOA and you would have to make them a Full and Final offer which they may or may not accept. That is not an area that I have personal experience to comment on.

Clairman

stapeley

First thing i would do would be request a notice of assignment , make sure they have the right to persue the debt. Also I would request a CCA .