Full and final settlement help thread

Hammath wrote: »

Quick question.

Is it ever possible to clear a default with a reduced payment but have your credit report updated to say settled rather than partially?

Brief outline I have 4 accounts with Cabot and have made no payment to them. I am in the position to get a mortgage and my broker has advised I just need to have these accounts settled. He specifically said not to get them partially settled and even confirmed with the mortgage provider that when settled they would be happy to process the mortgage.

Am I just going to have to suck it up and pay them in full?

Thanks

I'm sorry I can't answer your questions as I have had no experience of mortgages since ours was paid off many moons ago.


What I do know is that, in every case I've heard of, a creditor marks a Full & Final settlement (a misnomer if ever there was one) as Partially Settled. I don't think there's any way to get round that. I hope Fatbelly, sourcrates, January or someone else with the exact information will be along to help you.

There are 2 points in your post though that struck me. You said you have not made any payment to Cabot. I don't understand what you mean by that, sorry:o. Your accounts are in arrears and defaulted so your credit file will show this. anyway. I'm surprised your Mortgage company will accept that situation and not Partially Settled status instead.

Also, you mention offers. Have Cabot contacted you to say they will accept a settlement offer yet? It's isn't a given that creditors will accept them and often depends how far down the line you are with the debts. It may be that Cabot will accept just a minimal deduction from the balance in order to settle so, in that case, it would be worth paying in full if you are in a position to do so and avoid the Partially Settled status on your file.


Finally, have these debts have been ongoing for a while? Defaults drop off your credit file after 6 years anyway and although the balance is still outstanding no-one can see evidence that it even exists by looking at your file. At least, that's what I understand so I hope someone more knowledgeable will come along and provide the exact information.

Good Luck:beer:

Hammath wrote: »

Since my accounts were passed to Cabot financial I haven't made a payment towards them or contacted them . It's been about 5 years. They have sent me a letter saying they will accept 50% of the balance in settlement.

In order to proceed with the mortgage application I need the accounts to show as settled rather than partially. This was a very specific request. Because my last 4/5 years credit file is good , once these old defaults are showing as settled rather than defaults with outstanding balances, the mortgage company are happy to proceed.

I know I have the option to wait about 12 months and not have to pay anything towards them at all but I'm in the position to use some of my house deposit to clear the balances and proceed with the mortgage now rather than wait and continue to waste money renting.

Thank you. Sorry, though, I still don't fully understand:o.


If you haven't paid Cabot anything for 5 years I can't see how your last 4/5 years credit file can be good:think:. I'm assuming therefore that these debts were defaulted prior to the 5 years that Cabot have owned them , in which case they should have dropped off your file after 6 years in total and this will be reflected in your file now being good.


There is a situation where debts become Statute Barred. I do not know the full details of this, sorry:o, but after 6 years (I think) of no contact or payment between creditor and debtor the debt ceases to be claimable. As you said you had no contact for 5 years and just have another year to go I assume Statute Barring is what you're referring to. You say you don't want to waste another year renting but it might be worth it to have the debts totally written off. I'm not sure how this would appear on your credit file though for mortgage purposes. I hope someone else will be along very soon to explain. It doesn't affect me directly.but I'd really like to know the answers as your question really interested me.


In any case, I'd advise not doing anything at all yet including responding in any way whatsoever to Cabot's offer letter.. Can you hold off making a decision until someone is able to give you some good, solid advice? Incidentally, a 50% reduction after 5 years of paying nothing doesn't seem a very good settlement deal to me:eek: