Proposing a settlemnet figure

r4debe · 2 January 2019 at 1:38PM

A few years ago my credit card debts became unmanageable as I was barely able to make the minimum payments.

I was contacted bu a company who, for a monthly admin fee, offered to come to an agreement with my creditors, to have my interest frozen.

That company is no longer operating so I now pay another company but don't have to pay an admin fee, or interest.

This is a good arrangement but I am now in a position to pay off the debts in full.

I called the company today to ask them for a settlement figure, however they told me that I would have to propose a settlement figure which they would pass on to my creditors, who would consider it.

I am wondering what an acceptable figure wold be to offer for settlement, if there is a rule of thumb for this kind of thing?

I owe about £2500

System · 2 January 2019 at 1:39PM

I'd start with 50%.

And for the future, never pay someone to do what you have done. There are several charities, especially Stepchange, who will do it for free with a couple of them carrying a lot more clout with lenders than these firms you used.

r4debe · 2 January 2019 at 1:45PM

Thanks for the quick reply.

Yes I have heard that there are charities who will agree to freeze interest for free. Fortunately I haven't been with the company that was charging me an admin fee for some time now.

BodyOfBones · 2 January 2019 at 1:54PM

I myself would start with 30% and see what they say.

Willing2Learn · 2 January 2019 at 1:58PM

If it were me, I would send a written CCA request to each creditor prior to any offer. That would ensure that each debt has the correct paperwork and is enforceable.

Blackbeard_of_Perranporth · 2 January 2019 at 2:08PM

Start at 10%, knowing that probably around 25 to 35% hits the mark with some!

r4debe · 10 January 2019 at 1:36PM

Thanks for all the replies. Really great busy forum.

The only question I have is, will offering a lower figure affect my credit rating?

[Deleted User] · 10 January 2019 at 1:38PM

Once you've defaulted, settling for a lower figure will have little impact on how lenders see you.

Settling it is the key thing.

DannyPearce90 · 10 January 2019 at 1:59PM

I think you will be able to get a template letter from one of the debt charities, such as Step Change.

There is no set amount to offer, it should be based on your affordability always.

downhillfast · 10 January 2019 at 3:46PM

What you need to do before you do anyting else is to see how your credit reports look - all 3 of them. Not the 'score' but the actual records of your specific debts.

If you entered a DMP (which it sounds like you did) before the accounts got heavily into arrears then they may never have marked them as defaulted and you may have an 'arrangement to pay' marker instead. These are very different beasts when it comes to rebuilding your credit-worthiness for the future - a default is registered once and then drops off 6 years later... an arrangment to pay marker is added every month so the last one will not drop off until 6 years after it is put on your file. If your debts are old (over 6 years old) and defaulted then they may not even show up on your file! however, if they have an arrangement to pay marker and you then don't settle in full you will then have 'partially settled' (unless you negotiate with them as part of the deal) on your file for another 6 years which for the sake of paying it off in full (if you can afford it) may make it well worthwhile.

foxy-stoat · 10 January 2019 at 4:03PM

r4debe wrote: »

Thanks for all the replies. Really great busy forum.

The only question I have is, will offering a lower figure affect my credit rating?

If you have defaulted as many times as you have then there is nothing else you can do to make your credit history any worse.

Proposing a settlemnet figure

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