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  • FIRST POST
    • Welshie28
    • By Welshie28 30th Mar 17, 1:01 AM
    • 90Posts
    • 83Thanks
    Welshie28
    Full and final settlement
    • #1
    • 30th Mar 17, 1:01 AM
    Full and final settlement 30th Mar 17 at 1:01 AM
    Hi all.

    Some help would be appreciated please

    I am currently in a DMP with Stepchange. All has been going well but now both of my debts have been passed to third parties, one being HSBC Repayment Services and the other, Cabot Financial. I am interested in full and final settlement. I owe 12,800 to HSBC and 3900 to Cabot. A family member has offered me 7000 to pay them off. Cabot have only recently taken over the debt, HSBC took the other debt over about 3 months ago and have defaulted me but Cabot state that if I don't pay the arrears of 1800 then I will be defaulted in 6 months. I am looking to offer 5500 to HSBC and 1500 to Cabot as full and final settlement. From all of this information, how likely is it that this will be accepted, bearing in mind my DMP is set to run until the end of 2021?

    Thank You.
Page 1
    • January2015
    • By January2015 30th Mar 17, 8:30 AM
    • 2,089 Posts
    • 5,180 Thanks
    January2015
    • #2
    • 30th Mar 17, 8:30 AM
    • #2
    • 30th Mar 17, 8:30 AM
    Hi all.

    Some help would be appreciated please

    I am currently in a DMP with Stepchange. All has been going well but now both of my debts have been passed to third parties, one being HSBC Repayment Services and the other, Cabot Financial. I am interested in full and final settlement. I owe 12,800 to HSBC and 3900 to Cabot. A family member has offered me 7000 to pay them off. Cabot have only recently taken over the debt, HSBC took the other debt over about 3 months ago and have defaulted me but Cabot state that if I don't pay the arrears of 1800 then I will be defaulted in 6 months. I am looking to offer 5500 to HSBC and 1500 to Cabot as full and final settlement. From all of this information, how likely is it that this will be accepted, bearing in mind my DMP is set to run until the end of 2021?

    Thank You.
    Originally posted by Welshie28
    Others with more experience will be along to comment, but I'll comment based on my own limited experience with my F&F offers.

    You don't say how long you've been in a DMP, nor how much the monthly payments are. When I made F&Fs to accounts with similar sized balances to your two accounts, I was in a DMP forecast to end 2024. Both accounts had defaulted. Both are handled by Debt Collection Agencies (DCAs) but have not been sold by the originally creditor. The answers I got were no thank you, but we would settle at 90% of the balance (I started at 30%). I batted back and forth and the lowest they would go was 70% of the balance (which I couldn't afford so I am still making DMP payments).

    I totally understood why they wouldn't go lower. I was paying approximately 1% of the balance each month. So on the larger debt they were getting well over 100 each month and on the smaller debt they were getting close to 50 (remember my balances were different to yours). Why would they settle for a significantly reduced figure when they were getting this nice regular sum each and every month.

    Personally I think if you are going to go for F&Fs then don't offer the full amount to start with. Start at a low percentage of the balance owed and then you have some negotiating power to increase the offer if/when they refuse it. I think they will refuse the highest offer though because 2021 is only four years away and they are getting a monthly decent amount already.

    Good luck.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was 95k I'm driving it down
    1k emergency fund (member #84) 1k/1k
    [COLOR=Blue][SIZE=2]
  • National Debtline
    • #3
    • 30th Mar 17, 9:58 AM
    • #3
    • 30th Mar 17, 9:58 AM
    Hi

    I agree with January2015!!!8217;s comments. F+F settlements tend to be more likely when the debt has been sold on to debt collectors, and will be considered on a case by case basis. There!!!8217;s no harm in making your offers though to see what kind of response you get. Stepchange may assist you in making the offers, or you can do it yourself using our factsheet and sample letter. Make sure the creditors confirm acceptance in writing before making the payment.

    www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Welshie28
    • By Welshie28 30th Mar 17, 5:41 PM
    • 90 Posts
    • 83 Thanks
    Welshie28
    • #4
    • 30th Mar 17, 5:41 PM
    • #4
    • 30th Mar 17, 5:41 PM
    Others with more experience will be along to comment, but I'll comment based on my own limited experience with my F&F offers.

    You don't say how long you've been in a DMP, nor how much the monthly payments are. When I made F&Fs to accounts with similar sized balances to your two accounts, I was in a DMP forecast to end 2024. Both accounts had defaulted. Both are handled by Debt Collection Agencies (DCAs) but have not been sold by the originally creditor. The answers I got were no thank you, but we would settle at 90% of the balance (I started at 30%). I batted back and forth and the lowest they would go was 70% of the balance (which I couldn't afford so I am still making DMP payments).

    I totally understood why they wouldn't go lower. I was paying approximately 1% of the balance each month. So on the larger debt they were getting well over 100 each month and on the smaller debt they were getting close to 50 (remember my balances were different to yours). Why would they settle for a significantly reduced figure when they were getting this nice regular sum each and every month.

    Personally I think if you are going to go for F&Fs then don't offer the full amount to start with. Start at a low percentage of the balance owed and then you have some negotiating power to increase the offer if/when they refuse it. I think they will refuse the highest offer though because 2021 is only four years away and they are getting a monthly decent amount already.

    Good luck.
    Originally posted by January2015
    Hi and thank you for your response.

    I have only been in a DMP since April 2016. I pay 225 per month to HSBC, I used to pay 519 before my DMP and I'm paying 78 to Hitachi (now Cabot) and I was paying 190. I was under the impression that the third party buys the debt for pennies to the so would be making a profit if settling at full and final settlement. I must have misunderstood. I will make the offer and see what they say.
    • January2015
    • By January2015 30th Mar 17, 6:11 PM
    • 2,089 Posts
    • 5,180 Thanks
    January2015
    • #5
    • 30th Mar 17, 6:11 PM
    • #5
    • 30th Mar 17, 6:11 PM
    Hi and thank you for your response.

    I have only been in a DMP since April 2016. I pay 225 per month to HSBC, I used to pay 519 before my DMP and I'm paying 78 to Hitachi (now Cabot) and I was paying 190. I was under the impression that the third party buys the debt for pennies to the so would be making a profit if settling at full and final settlement. I must have misunderstood. I will make the offer and see what they say.
    Originally posted by Welshie28
    Hi

    You are right - 3rd party DCAs do buy debts for pennies in the pound. Are you sure your debts have been sold and are not just being managed by the people collecting them.HSBC Repayment Services sounds like a collection division of HSBC - so probably still with the original creditor.

    Even so - DCAs rarely deal low if they are getting regular repayments of the level you mention - and why would they?
    DFW Nerd No. 1484 LBM 07/01/15 Debt was 95k I'm driving it down
    1k emergency fund (member #84) 1k/1k
    [COLOR=Blue][SIZE=2]
    • Welshie28
    • By Welshie28 30th Mar 17, 6:31 PM
    • 90 Posts
    • 83 Thanks
    Welshie28
    • #6
    • 30th Mar 17, 6:31 PM
    • #6
    • 30th Mar 17, 6:31 PM
    Hi

    You are right - 3rd party DCAs do buy debts for pennies in the pound. Are you sure your debts have been sold and are not just being managed by the people collecting them.HSBC Repayment Services sounds like a collection division of HSBC - so probably still with the original creditor.

    Even so - DCAs rarely deal low if they are getting regular repayments of the level you mention - and why would they?
    Originally posted by January2015
    I did think the same about the HSBC debt but the Cabot letter for the Hitachi debt stated that they have bought the debt and Hitachi will no longer be involved so maybe just that debt has been sold. I think I might just continue to pay them for the next year or so and then offer F&F to both debts then.

    Thank you for your help
    • sourcrates
    • By sourcrates 30th Mar 17, 8:43 PM
    • 14,303 Posts
    • 13,517 Thanks
    sourcrates
    • #7
    • 30th Mar 17, 8:43 PM
    • #7
    • 30th Mar 17, 8:43 PM
    Cabot are debt buyers, your other account is still with HSBC.

    If your making regular payments, and there are no other extenuating circumstances, it's unlikely Cabot will offer much discount, they may go to 15/20% but not much more.

    HSBC will most likley dismiss your offer out of hand.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
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    • Blake10
    • By Blake10 11th Feb 18, 6:06 PM
    • 2 Posts
    • 0 Thanks
    Blake10
    • #8
    • 11th Feb 18, 6:06 PM
    • #8
    • 11th Feb 18, 6:06 PM
    Hi
    Can anyone help, I had a unsecured Loan in 2006 and have only been alerted now by the Mortgage company that it is showing as an equitable charge on the property. The Charge was done by Lloyds Bank, There apparently was a settlement offer made available by Westcot in 2007. Do I contact requesting a full and Final from Westcot or Lloyds Bank and will this get the charge removed?
    • Blake10
    • By Blake10 11th Feb 18, 6:12 PM
    • 2 Posts
    • 0 Thanks
    Blake10
    • #9
    • 11th Feb 18, 6:12 PM
    Full and Final Settlement
    • #9
    • 11th Feb 18, 6:12 PM
    Hi
    All replied will be grateful.
    I have only been alerted by Mortgage Company that I have an equitable charge from Lloyds Bank 2007 for an unsecured loan. Apparently There was an offer from Westcox in 2007 for a full and final, would I contact Lloyds or Westcox to make the full and final to get the charge removed?
    • fatbelly
    • By fatbelly 11th Feb 18, 6:43 PM
    • 12,340 Posts
    • 9,384 Thanks
    fatbelly
    Hi
    All replied will be grateful.
    I have only been alerted by Mortgage Company that I have an equitable charge from Lloyds Bank 2007 for an unsecured loan. Apparently There was an offer from Westcox in 2007 for a full and final, would I contact Lloyds or Westcox to make the full and final to get the charge removed?
    Originally posted by Blake10
    You need a new thread of your own really.

    Now that there is a ccj and a charging order on the debt they are not likely to accept (or not likely to give a good offer of) a full & final settlement deal.

    You'd need to contact Lloyds if you want to try it. Wescot would have been a DCA they were using at the time.

    If nothing has happened in 10 years I'd be inclined to leave it alone but pay it off when you sell the house.
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