Settling debts? Advice wanted

monsta2005 · 10 January 2018 at 2:17AM

Owing to a gambling problem I built up a debt of £21k 2/3 years ago- (glad to report I've beaten the demon btw). Because of mental health issues probably contributing to this somewhat my creditors have been understanding. All cards froze interest and fees, with 3 accepting payments of between £4-9 month. Others didn't ask for any payment.

The debts are spread across 5 cards. Approximate debts are:
Barclaycard-£12500
MBNA- £3500
Lloyd's - £1000 (paying £4 a month)
Bank of Scotland-£2000 (£9 a month)
Halifax - £1000 (£4 a month).

It should be noted MBNA and Barclaycard have not contacted me for 12 months plus......I do receive regular letters from Lloyds, Halifax, BOS in accordance with my payment schedule

I've managed to find a source of income yes not much to my name about £1k. But regardless there is a possibility family maybe willing to help settle these debts- but not a huge amount....but maybe £1k, if I'm lucky (no guarantee).

Which addresses would I send settlement letters to out if curiosity? I looked but couldn't find the appropriate addresses.

What would be advisable to do in my situation....continue as it is? I was considering making a settlement to my latter 3 creditors with the £1000 I have. Should I phone first? Would you bother contacting the first two creditors?

And further despite looking around, I keep seeing contrasting advice as to the amount i should offer in settling. Is it a possibility I could settle these debts for £2k?

Side note-My mental state isn't great, but thanks to many improvements certainly not as bad as before....

Any views advice much appreciated...

National_Debtline · 10 January 2018 at 10:42AM

Hi Monsta2005,

If you want to do full and final settlements then they should all be done in writing, there is no need to call them first, just send a letter with your offer. There is no official amount required to do these settlements so you could try with £1000 but it would need to be divided between all 5 debts. I will note that £1000 is a bit on the low side (around 5%) but if you don't ask, you definitely won't get.

You will need to divide the money fairly between the debts so they all get the same percentage offer. You will need to get the creditors to agree, in writing, not to chase you for the shortfall, and not to pass to any other organisation that will chase you for the shortfall. They will need to agree to mark your credit file as partially settled and with a £0 and that the account will be closed. If they agree to all of that, in writing, then you make the payment to settle the account. Do not accept confirmation over the phone and keep a copy of everything for 6 years. We have a sample letter to help you - https://www.nationaldebtline.org/EW/sampleletters/Pages/Full-and-final-settlement-offers-%28sole-name%29.aspx

I appreciate some of the debts haven't contacted you for 12months, but they would actually have up to 6 years to try and take county court action, so they do need dealing with, whether that is through your settlement offer or monthly repayment plans. You could look on old letters for the postal address, or the address information should be available online.

If you are only able to afford small monthly payments, and the full and final offers are unsuccessful, then you could speak to one of the free debt charities for more advice about your options. Bankruptcy could be a potential solution.

Laura
@natdebtline