In a Full and Final Settlement (F&F) a creditor agrees:
- to accept less than the whole amount to clear it (“full”), and
- that they won’t take action to recover the rest (“final”).
This is sometimes called a “partial settlement” and sometimes a “short settlement”.
You can offer a F&F to a creditor. Or a creditor may write to you to suggest an F&F. This usually happens if you have defaulted on the debt or have been in a debt management plan for a while.
Contents
You propose a Full and Final settlement
If you have a lump sum, then you can write to your creditors and offer a F&F.
You can do this yourself, there is no need to employ a solicitor to write a letter, that is no more likely to be accepted than an offer from you.
Where could the money come from?
The lump sum could come from:
- a refund that you get, for example from an affordability claim;
- a redundancy payment (make sure you will still have enough money to live on and pay the mortgage until you find another job);
- selling some assets, possibly even your house;
- an inheritance;
- it might be offered by a relative (do consider if your relative can really afford this – if your situation is close to hopeless, then it may be better to go bankrupt rather than take money from a relative); or
- if you are over 55, you might consider taking money from your pension if you can get your creditors to agree a low enough settlement.
It is usually a big mistake to try to borrow money in order to clear a debt that has already defaulted.
You don’t have to offer the same to all your creditors
If you don’t have a lot of money, it could be a good idea to use it to pay off one creditor.
For example, if you only have £1,000 then that isn’t going to get far if your debts add up to £24,000. But if you could get a creditor you owe £3,000 to take £1,000 then this is a good improvement.
When is an offer likely to be accepted?
A full and final offer is NOT LIKELY to be accepted unless you have already defaulted on your debts.
The longer you have been paying little or nothing towards them, the lower offer your creditors may be prepared to accept.
An offer is more likely to be accepted by a debt collector that has bought the debt then the original lender.
How to make the offer
National Debtline has a sample letter that you can use.
It is a good idea to add an explanation about where the money is coming from.
A couple of examples:
“I have been offered £2,000 by my sister if this will help me clear my debt with you, which is currently about £4,650. “
“I am reluctant to take money from my pension, so I will only do this if you agree to accept this offer.”
Enclosing an income & expenditure sheet with your letter will make the point to the creditor that if they don’t accept this offer it will take a very long while to repay the debt.
That sample letter asks the creditor to confirm in writing that the money will be accepted as a Full & Final Settlement and also that they will not sell the remaining debt.
You need to insist on this. Unscrupulous creditors have been known to just take the money, reduce the debt then continue to chase you for the rest of it. In 2025, this is very rare but it’s simply not worth the risk! If a creditor calls you up and agrees to your offer, do not pay the money without a written agreement.
When you are in a debt management plan
A F&F can be great way to start getting the number of debts down in a Debt Management Plan. the remaining debts will then be paid off faster
Often your DMP company will say you have to offer the same to everyone, which is normally not going to work well unless you have a lot of money to offer.
So I suggest you don’t talk to your DMP firm about this but make the offer to some creditors yourself.
I don’t think this is being unfair to your other creditors – by clearing one debt, your DMP will then start paying more to the others.
An unusual case – a single payment IVA
If you have a lump sum to pay towards your debts but afterwards you are unlikely to be able to pay much at all on a monthly basis, then this could be a good option for you.
A typical situation might be if you have been made redundant and you are unlikely to be able to work again, perhaps because of your age or health. Or if you have downsized your house.
This gives you a Full & Final settlement on all your debts without having to negotiate with each creditor individually.
The downside is that this is a form of insolvency – it has the same bad effect on your credit record as bankruptcy for 6 years.
If you want advice on this, talk to StepChange, who could set one up and who will explain if you have better options.
Before making an offer…
Is the debt enforceable in court?
Think about this before making a settlement offer.
For loans, credit cards, store cards and catalogues, the debts are unenforceable in court if the current creditor (usually a debt collector) can’t produce the CCA agreement for the debt. See When and how to ask a creditor for the CCA agreement for more details.
This is most likely to work for old debts, especially those where the account was opened before April 2007. It’s also worth doing this for accounts that were opened more recently if they have been sold to a debt collector. It won’t work for overdrafts or mobile or utility bills.
If the creditor admits they can’t produce the CCA agreement, you could decide not to pay the debt at all. This is normally your best option.
You may think that the creditor will then accept a really low settlement offer. Unfortunately many don’t. completely sorted.
How low an offer will be accepted?
This is a really hard question to answer because it depends a lot on your circumstances. An offer may be rejected because it is too low, but if you give the creditor more information it’s possible that they could be persuaded if you can give them more information.
You have to put yourself in the mind of the creditor and try to work out what they will think – for more details read What to do if a Full & Final Offer Is Rejected.
For example, if you have been paying token payments for more than a year and your brother offers you half the amount you owe, then there is a good chance your creditors might be interested.
But if you have just lost your job, are young and healthy and have only missed a month’s payment, then your creditors are very unlikely to accept 50%… but you may be able to persuade them with 90%.
It isn’t good tactics to always start with a really low offer such as 10% if all the indications are that they won’t accept that. Your letter may just be binned if it isn’t somewhere close.
Realistically, a secured creditor is extremely unlikely to accept a low F&F if there is much equity in your property. And they are uncommon on debts where there is a CCJ.
Your creditor proposes a F&F
If you have been in a DMP for a while, or have not been paying anything, then you may receive a letter offering you a Full & Final settlement.
Klarna has said that it will offer 50% reductions to eligible customers who have missed payments for a long period.
Of course you may have no money to accept this offer… But if the offer is a good one it may be worthwhile taking a hard look at your situation (see the list of possible money sources above) to see if you have any options.
At this point it may be a good idea to negotiate, but there is no point in wasting everyone’s time. If they have offered you a 60% settlement, then it’s worth seeing if they will accept 40%, but not 10%.
Read their letter closely – is it clear that they are definitely writing off the remainder of the debt? If you are unsure, get them to clarify this in writing.
Your credit record & worries about a future mortgage
Debt collectors tell you that a partial settlement will harm your credit record and it will be there for 6 more years. The first is partly true – but often doesn’t matter – and the latter is simply wrong!
- A F&F usually results in the debt being marked as “partially settled” on your credit file. You may decide this isn’t important for you. Your credit rating is usually poor or dreadful if you are likely to get a F&F, and it’s sensible to decide that clearing your debts is your top priority. Whilst it would be lovely to get rid of the debts and improve your credit record at the same time, that probably isn’t going to happen.
- If the debt has a default date on your credit record, it will always drop off your credit file six years after that date. Making a Full and Final settlement will not affect this, the debt won’t stay there for longer.
- If the debt has already dropped off your credit record it will NOT reappear after a partial settlement.
This is discussed in more detail in How partial settlements affect your credit rating.
You may be worried about a future mortgage. I have looked at this here: Will partial settlement make it hard to get a mortgage?
For most people if they have to pay in full it will be many more years before they can get a mortgage… so unless you can easily pay the full amount, this probably isn’t something to worry too much about.
Summary of pros and cons
Pros Clears a chunk of your debts, leaving you in a better position to clear the rest faster.
Cons Your creditors don’t have to accept. You shouldn’t leave yourself short of money you need for living on.
Debt Camel says Often you don’t have the money for a F&F, so they tend to be rare, but they are good options when they work for you.
Remember to keep the emails or letters
99 times out of a hundred, everything goes smoothly and you will never hear anything about the debt again after a F&F.
However just in case something goes wrong it’s a good idea to keep the emails or letters from the creditor confirming that your payment was a Full and Final settlement.
If you ever get any letters about the debt again, send them a copy of the letter or email where the creditor agreed to the settlement or proposed it. Keep these letters for at least six years, after which the debt would become statute-barred anyway.
Carly says
Hi Sara
Most of my debts have been defaulted and I have been paying small amounts to debt collection agencies for all, bar 2 (I have an informal arrangement with those) for nearly 2 years. Is it likely that the debt collection agencies will accept a full and final settlement? I was aiming to offer 50% to each? Thanks in advance
Sara (Debt Camel) says
how long ago were the defaults?
where is the money for this settlement offer coming from?
Rajib says
Sara, I have some 8 debts of £17,000 which are under DMP with step change, 5 of them dropped off and the rest will drop off from the credit file by April 2021, after that I would like to take mortgage in June or July 2021. I wanted to settle them with discount as low as 20% of the balance. Most of my debt default date in 2014. I have called two creditor and both of them ask for income/expense schedule. I can just simply fill them up. my worry is do they ask for proof like bank statement or payslips. if they do, what happen if I refuse to send them. does that afftect on DMP?
Sara (Debt Camel) says
Creditors will often ask for an I&E.
I suppose they could ask for proof of income or expenses – if they find you have supplied an I&E which is very inaccurate, they may refuse to accept your offer. And they could also inform StepChange but I haven’t heard of this happening. After all, why should they accept a low offer if you could actually be paying more each month?
Carly says
Hi Sara
I made an offer to Barclaycard for full and final settlement of 45% of total balance however just received a letter to say they are unable to accept less than the full balance as payment. Is it worth countering this with a higher offer? I have been on a special arrangement with them for circa 3 years.
Many thanks
Carly
Sara (Debt Camel) says
why are you on a special arrangement with them? Is interest frozen?
How much are you paying a month and how large is the balance?
Where is the money coming from to make this settlement offer?
Carly says
Hi Sara
Because I got into financial difficulties following a separation several years ago. Yes interest is frozen I pay £10 per month the balance is now £290 a family member has offered to help me clear some of my debts.
Thanks
Sara (Debt Camel) says
so it is likely that the debt will be fully paid in just over 2 years – that is probably why Barclaycard prefer the current arrangement. #
Why not just settle back and pay the monthly and stop worrying about this?
Carly says
Yeah I suppose you are right. Just trying to clear as much debt as possible.
Thanks Sara
Pablo says
Hi Sara, I would love to know your view and anyone else on this. I’m paying back one of my loans of £5000 and received letter from Cabot saying that they will reduce it to a final one off payment of £1500 if I pay it all in one go or over 3 months. Is this a good offer? And will it show in my credit report as fully paid off or just partial?
Thanks so much!
Sara (Debt Camel) says
Sorry a lot of questions.
Who is the lender? When was this loan taken out? How large was the loan and how much have you paid to it so far, to the lender and to Cabot?
Are you repaying other defaulted debts? Non defaulted debts?
Pablo says
Hi Sara, Nationwide credit card was original lender it was £6350 and around 7 years ago I reached this level and couldn’t afford repayments. Cabot took over the debt and I have paid back £1480 of the total.
I do have other debts another close to £5000 from Nationwide that was an overdraft again I’m paying back through Cabot. Same time period as above. With also three other payments to Lowell combined over £3000 more so over £13000 I’m paying off in monthly instalments to all collectors. (In small amounts).
Many Thanks for looking into it
Sara (Debt Camel) says
Some more questions.
Can you actually afford this offer without borrowing any more money? Because you should NOT borrow money or get behind with bills to pay a debt which is already defaulted and where no interest is being added.
How much are you paying to your debts overall each month? Is this hard? Comfortable?
Do you think your finances will inrpve or get worse over the next years?
With quite a lot of old debt which you are paying, you have some options – including taking this offer – but what will depend on the answers to these questions.
Pablo says
Hi, I’m ok to pay this one off fee offer, my amount a month is £250 which I’m comfortable paying currently. I am unemployed at the moment as I work in cruise industry which has been hit very hard, so as of next year when I’m back in a job I will be able to pay back more on a monthly basis. So my finance situation will hopefully improve.
Sara (Debt Camel) says
if you are currently out of work, this doesn’t sound a great idea to me. You don’t know your job will come back next year.
You are paying a lot to the debts if you are out of work? Do you have a lot of savings?
It would show on your credit report as a partial settlement, but that is largely irrelevanet as you have several defaulted debts, partially settling one doesn’t make things look worse.
One thing you could look at as your debts are not recent is toi as Cabot and lowell to produce the CCA agreement for the credit card debts. Not the overdeft. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/. It may be that for at least one of the debts the debt collector can’t produce it and the debt is unenforceable.
Pablo says
Thanks Sara, I will contact by post with the £1 for the copy of CCA for these loans.
Many Thanks
Bernadette M says
Hi firstly I just want to thank you sincerely for all the help listed above. If possible I wondered your opinion on getting the best full and final settlement. I’ve been on a DMP for 9/10 years and Repaid £17k. I’ve just under £4K left which I’m hopeful I can settle for about 25% of the last bits. Would you cancel Stepchange and go it alone ? Would you consider small payments for 6 months to get them to bite? Just trying to sort this as best as possible. Because it’s all debt collection agencies they’ve made plenty of profit from me ! Thank you for any advice !
Sara (Debt Camel) says
Taking over your DMP yourself may be a good idea, but not to then cut the payments! That would simply annoy your creditors unless you can justify it.
I suggest you read https://debtcamel.co.uk/settlements-old-debts-cca/
Kate says
I had approximately £77k debt in 2010 of which approx £55k was from 2007 but I tried to resolve the problem in 2010 and this was my last contact. This includes a mortgage shortfall. I had my home repossessed and have not settled anywhere since so did not have a forwarding address. I have therefore not had contact with any creditors since. It was never my intention not to pay but the longer it has been the harder it has been to know where to start. I am working but have had a number of episodes of poor mental health and am currently sick. The anxiety is crippling and I do want to sort it. What percentage are creditors realistically likely to accept as full and final settlement?
Sara (Debt Camel) says
who was the mortgage shortfall with?
apart from the mortgage shortfall, what were the other debts – loans, credit cards, overdrafts… do you still have a list?
do you have a bank account?
Kate says
Mortgages were Cheltenham and Gloc & GE capital
Others credit cards, overdraft and council tax
I do have a basic account not with any of my creditors
Sara (Debt Camel) says
First I am going to say something that won’t help you at all, but may help someone else who is now facing huge debts who reads this.
Bankruptcy was the right solution for you back in 2007 and 2010. It would very likely have been over in a year (very few people have to make monthly payments in bankruptcy and then for no more than 3 years), off your credit record in 6 years and by now it would have been ancient history. Instead you have had more than a decade of stress and you are still worrying.
Kate says
I know I received bad advice in the past. I know bankruptcy is still an option but I think I would have to pay for 3 years. In 2007 I was told to wait until the house was repossessed and the figures quoted in 2010 would have been more than if I’d continued paying the mortgage but it was too late as the house had already been repossessed. That is why I wanted to know approximately what percentage my creditors are likely to accept as full and final. I don’t have a lump sum but family might be able to help if it’s not astronomical
Sara (Debt Camel) says
I agree bankruptcy is still an option.
But so is sitting back and waiting to be contacted because that gets less likely with every year. At 10 years you are now past the main pain point, in another coupld of years the mortgages will be statute barred too.
Sara (Debt Camel) says
It isn’t possible to give a % for what creditors are likely to accept. It is likely the council would refuse any partial settlement offer!
At this point you are also likely to find it hardwork and stressful to chase down who actually owns your debts, as most of them are likely to have been sold on to debt collectors, possibly more then once, and are not likely to appear on your credit record.
It is also likely that the loans, credit cards and overdraft are by now “statute barred”. Although they legally exist, the lender could never take you to court and get a CCJ so you don’t have to pay them.
And for the loans and credit cards it is pretty likely that the current creditor (who ever that is) would be unable to produce the CCA agreement for the original debt – another reason the debt could not be enfoced inc court so you would not have to pay them
(It is possible that a lender may already have gone to court and got a CCJ. But if a CCJ was over 6 years ago, it can’t be enforced unless the lender goes back to court and asks for permission, which is very rarely given. You will also find it hard to track down if you had any CCJs more than 6 years ago!)
The mortgages are different, because here the time to become statute barred is 12 years, not 6. So after 2010, the 12 years is not quite up. Although many mortgage lenders will not try to collect after the 6 year period.
So this probably seems difficult and confusing,
my suggestion is that unless you now have a large anount of money – certainly more than 10k, possibly more than 20k, then I can’t see you have much to gain and it would be a real hassle and stress by trying to contact your creditors and make small settlement offers.
Instead I suggest that you open a savings account and start putting any spare money into there. Then if you are contacted by a creditor, you have somne moeny there for a settlement offer.
BUT if you are contacted by a creditor, if it it for a loan or a credit card, first ask them to produce the CCA agreement for the debt. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/. if they can’t, you don’t have to pay it. This is important because it means you will have more money availbale to try to settle other debts that are enforceable.
And if they can produce it, talk to National Debtline on 0808 808 4000 about thwther the debt is “statute barred”as it very probably is!
And if it is about a mortgage debt, also talk to National Debtline about your options.
Kate says
Thank you for your advice. I hope it also help others to prevent them from making the same mistakes. I was just coming out of a domestic violence situation at the time combined with bad advice, my judgment wasn’t right at the time. I have so many regrets
Emin sailor says
I have an old debt over 6 years old. It dropped of my credit file. They now ask me to pay it or they will take me country court. I now have an excellent credit score and I don’t want to ruin it again. Shall I pay the whole amount ( £1800 ) which would be difficult for me or offering them full and final settlement. Would that affect my credit if I pay them partial settlement?
Any advice
Thanks
Sara (Debt Camel) says
When did you last make a payment to this?
What sort of debt was it – credit card, loans, overdraft, mobile or something else?
MJ says
I have recently had a pay out on an affordability complaint and am considering using the money to clear my DMP debts.
1. The only debt which still shows on my credit file is my overdraft. The default date is in 2018. Each month it is marked as “missed payment”, even though I am paying it off. Should I pay this off in full, rather than make a settlement offer? I know the default will drop off eventually, but will it look better to not keep having the “missed payment” marker on my report?
2. Two of the debts are for pay day loans. One creditor has confirmed that I am entitled to affordability compensation. Should I stop paying this pending receipt of payment?
3. On the other pay day loan I am awaiting an outcome on my complaint – should I stop paying this one pending the outcome?
4. I am in the process of putting together an affordability complaint in relation to a catalogue debt. Should I tell them I won’t make any payments until the affordability complaint is resolved or make a F&F offer anyway?
5. For the other debts that have dropped off my credit file, I am planning to make low F&F settlement offers – am I right that these won’t have any impact on my future credit score, as they’re already “invisible”?
Many thanks
Sara (Debt Camel) says
First thing – do you have any debts which aren’t in your DMP? Where interest is being charged? Any rent, utility, council tax arrears? Any big bills coming up?
It’s great to clear off DMP debts but these are under control, so other things may be more important.
1. It doesn’t sound as though there is a default date on the overdraft. If there was, it would be marked as “default” every month. This is definitely in your DMP? I hope they have stopped adding fees?
2. Who is the lender? How much compensation will you get? I don’t think you should try to settle this one right now, it may complicate the refund.
3. who is the lender? how many loans did you have with them before this one?
4. has this catalogue debt been sold to a debt collector? how long since you defaulted on it?
5. These debts will not reappear. It sounds as though they must be old. If any of them are credit cards or loans or catalogues, read https://debtcamel.co.uk/settlements-old-debts-cca/.
MJ says
No – my mortgage, utilities and council tax are up to date.
1. The overdraft is definitely showing in the “defaulted” section on my credit report. It is in the DMP and a payment is being made towards it each month. No fees are being added. It is with a debt collector, not the original bank (the account is no longer active.) My big concern is the impact on my credit score (which has improved since other debts have dropped off) if I make a partial settlement.
2. Payday Express – the potential full redress figure is about £2700, but they’ve said the actual amount is likely to be much lower. I owe them about £280.
3. Pounds to Pocket – this was only the second loan I had with them, but it was repayable over an extended period with high interest. My claim is on the premise that they lent to me irresponsibly when I had other (numerous and sizeable) debts including several pay day loans and this was the “tipping point” that led me into entering into the DMP. The current balance is about £270.
4. Yes the catalogue debt is with a debt collector. It has been in my DMP since 2012, as have all other debts except the overdraft referred to above. I still have old paperwork showing credit limits etc. for making an affordability complaint.
5. Thanks – I’ve looked at that and will act accordingly re: credit card etc.
Sara (Debt Camel) says
1. settling a debt with a partial settlement will not affect your credit score. It is up to each lender to decide if they care about a partial settlement marker. Lenders will be happy to see that it is settled and many lenders won’t care that it has been partially settled. It will drop off in 2024.
2. If the lender has confirmed this last loan has been determined to be unaffordable, then the balance should be written off and you will get a tiny amount of the remaining compensation. I suggest you stop paying them now but definitely don’t offer any settlement as it is about to be wiped!
3. have you sent the administrators a claim? This sounds a bit marginal, you can’t rely on this one being upheld. But again no reason to offer a partial settlement at the moment.
4. is this catalogue debt on your credit record still? how large is it?
MJ says
1. Thanks – noted.
2. This was what I thought, just wanted to check.
3. Yes I have submitted a claim to the administrators in August, they have said they will respond within 120 days.
4. No it has dropped off a while ago. The original debt was about £3k, it is now about £450.
Sara (Debt Camel) says
OK, so asking for the CCA agreement for the catalogue may also work. Good luck!
Andrew Wilkinson says
Hi
I have a 5 year old debt for an Lloyds overdraft for £4295 that was defaulted on mid 2015, I got a letter saying it had been passed to Drydens Fairfax in 2018 who sent one letter. I asked them to provide evidence of the debt, and they emailed me a zip file of documents with a load of transactions on about 6 months ago. I couldn’t make a lot of sense of them and didn’t respond. I have since been sent a letter before claim on 3rd of November. I am unsure of how to respond as to this date I have never acknowledged the debt to them, but could potentially make a full and final offer of around 40%. Is this likely to be accepted? If not I couldn’t afford to pay it all in one go as currently on furlough due to Covid, and have been since April. I’m not sure they have enough proof of the debt being that amount to win if it went to court as there were a load of additional charges added on to make the figure they arrived at, which I couldnt possibly have paid at the time.
Any advice greatly appreciated, I am only 1 year away from all my defaults dropping off so it would be a disaster to get a CCJ at this time.
Sara (Debt Camel) says
It sounds as though you are not disputing the debt is your, just the amount?
If you are on furlough can you really afford £1800 to offer to this debt? Do you have any arrears on bills or other important debts? Can you pay all your current debts?
Dan says
Hi,
I’ve got a debt with Barclay that defaulted over 10 years ago for £5250. I’m paying them £4.42pm through a DMP.
I’ve just tied to call them and offer £1600 as settlement. This was refused and I’ve been told I can’t make another offer within 3 months and they won’t give me an acceptable percentage to aim for. Where do I go from here?
Sara (Debt Camel) says
That is a long time – often Barclays would have sold on your debt to a debt collector.
Can you say some more about your situation – what sort of debt was this? how large are your other debts? are you buying a house or renting? do you have any health problems or does your age make it unlikely your finances will improve? Where did this 31600 come from?
Nick says
Hello
I have StepChange assisting me with a partial final settlement offer following receipt of a large PPI payment.
They require funds to be paid to them before they approach my creditors. I’m rather concerned with this as it’s a large sum of money and want to be sure it’s the right thing to do.
Many thanks
Sara (Debt Camel) says
Some questions which may sound irrelevant but aren’t… there may be better options for you!
How large is the amount you are proposing to offer to settle the DMP?
How large are the debts in your DMP, what sort of debts are were, they?
How long has the DMP been running?
Apart from the PPI windfall, what is the rest of your financial situation like?
Do you have any debts that aren’t in your DMP? Are you behind with any bills?
Any urgent expenses coming up?
Are you buying or renting?
Lucy says
Hi
I have just found out that i have a ccj which was granted on 27th November 2014. The debt collection agency has sent a debt collector today. Given that it will be 6 years since the ccj was granted in 10 days time, should I wait to see whether they apply to court for an enforcement extension before doing anything?
Sara (Debt Camel) says
Sent a debt collector? or a bailiff/enforcement agent?
Lucy says
A debt collector from an agency
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about what might happen and your options.
Stuart says
Hello,
Looking for some advice, please. I have a credit card debt with Lloyds of £15.5k which defaulted in Dec 2015. I have not been chased for the debt at all in the past 4 years at all, no letters or calls. I had a huge falling out with them in mid-2015 over my then business and moved/closed all accounts immediately. The only thing left behind was the CC debt.
I now need to apply for a CBIL loan for my business and the only hurdle is the default needs to be satisfied before they will lend. I’m not sure what the best approach is as I know this debt will become statute-barred in Dec 2021 (assuming no CCJ etc before then).
I have about £5-6k (can push to £7k) in savings I can use for an F&F. I haven’t spoken to Lloyds yet about this.
What would your advice be considering I’ve had no contact or requests for the debt, no agencies, etc?
Thanks in advance
Stuart
Sara (Debt Camel) says
Sorry no idea. It is VERY odd that you have not been asked to pay this at all.
paul says
hello Sara ,
i was just wondering if the below letter offers me enough to be able to pay them and be able to count this matter closed or is there something else i need off them?
Your Balance : £2,721.00
Dear ,
Further to our Telephone conversation 18/11/2020, we confirm we are willing to accept the amount of £2040.75 in partial settlement of this debt, however this is on the strict proviso that payment is received at our offices by 30 November 2020.
.
Once paid, the remaining balance will not be pursued going forward and you will receive no further communication regarding the matter from Intrum or any third party.
Once the account is settled our entry on your credit file (if there is an entry) will show as a ‘partially satisfied’ defaulted account with a zero current balance.
Yours sincerely,
Legal Department
Intrum
what do you think?
Sara (Debt Camel) says
That sounds OK to me if you think the offer is reasonable.
Hannah says
Hi Sara,
Please could you offer me some advice. I defaulted on a NatWest credit card in 2012. My debt was sold to Cabot. I haven’t had any contact with them to acknowledge the debt. It’s since been passed on to Ruthbridge, who have offered me a final payment offer of £800. Is this enforceable ? Should I pay it, there is nothing on my credit file for this ?
Thanks.
Sara (Debt Camel) says
There are two reasons why this may not be enforceable in court.
1) the debt may be statute barred. Read https://debtcamel.co.uk/statute-barred-debt/ and talk to National Debtline on 0808 808 4000 about this.
2) Cabot may not be able to produce the CCA agreement for the debt, read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ which explains this.
I do suggest talking to National Debtline as it can be hard to decide which of these lines to pursue or whether you can go for them both at the same time.
Len says
Hi Sara, I’d really appreciate some help if you have the time to offer it.
I currently have a DMP through stepchange that has been running since 2014 with a starting balance of about 12k (couple of payday loans were written off). 6 creditors left, total balance about 5500. All but one is handled by a debt collection agency. The one not managed by a dca is a TSB overdraft. I’m not paying interest on any of them. Estimated debt free date is Jan 2028 at present so all creditors have a lot of years to wait.
Link financial – 3180
TSB overdraft – 860
Cabot – 550
Hoist – 510
Wescot – 290
Lowell – 206
I have a family member prepared to help me pay these off. I don’t know whether I should open negotiations one by one, which was advised on a forum, or if I can start negotiating with all while keeping my DMP running? I think I’d rather negotiate myself rather than via stepchange or is that unwise?
most want to sort the Link one. The start balance was about 4700 so I’ve paid 1600ish already. I don’t know what to offer them as an opening figure based on the fact I’ve been paying 6 years and they’ve got another 7+ years before they can expect it to be cleared. I was thinking of letting them know the reason my circumstances won’t change is because I have young children and can’t afford to work full time which is true (childcare costs) or would this be a mistake?
Thanks in advance sorry it’s so long.
Sara (Debt Camel) says
You could start off by asking all the loans and credit cards (ie not the TSB overdraft) for a copy of the CCA agreement for the original debt. See https://debtcamel.co.uk/settlements-old-debts-cca/.
the payday loans – who were they from?
Len says
Thanks for replying so quickly. The payday loans were Wonga and they were written off several years ago I think following a court case that said they never should have offered loans to certain people.
I’ve read the link you included which makes a lot of sense. To make sure I’m clear would you advise 1. Finding out if they have the CCA 2. If they don’t have it, offer a small settlement say 5% and if they do have it, offer a more realistic settlement?
Does is often happen that a creditor can’t find the cca but also won’t accept a low offer? We are hoping to get a mortgage once this is sorted so I’d feel uncomfortable just stopping paying.
Also the post mentions they might decide to go for a CCJ if they find it. Presumably they have to tell you this first then you have time to make the offer?
Thanks again
Sara (Debt Camel) says
are any of the debts on your credit record still?
Len says
No. Just the overdraft. So I guess if they don’t send a CCA I can just stop without paying any further as it won’t be on my credit rating.
Sara (Debt Camel) says
So with the debts not being on your credit record you can simply stop paying – no need to settle them. Often lenders won’t accept a low settlement. They know you may feel uncomfortable. If you are then going to settle them anyway, there isn’t much point in going through the hassle of asking for the CCA.
If you look back through the replies on this page https://debtcamel.co.uk/ask-cca-agreement-for-debt/ I don’t thinkl you will find one where the lender found the CCA agreement and then went for a CCJ. It doesn’t seem to happen. But yes, if they did, then htey have to warn you and so you have a chance to settle.
You could decide it’s not worth the hassle of doing this for your small debts and just ask Link?
Len says
I think I’m interested to see if they have the CCAs. If any don’t come back then that’s less money I need to settle everything – the family member can afford to give me the money but I’d like to take as little as possible.
This is new to me and I’m a bit scared of what it would mean to not pay in the event a CCA isn’t found. But I suppose if the debt is over 6 years old, which they all are, and therefore off my credit record, it won’t jeopardise a future mortgage application. And as long as I keep paperwork saying if they find it, I’ll resume payments again, then I’m pretty safe? The main thing is to get rid of this DMP so I don’t have that to declare when applying for a mortgage. I won’t need to tell about old debts in a mortgage application?
Aware I’m basically just bugging you for reassurance now. I think I’m still stressed that decisions I made as a dumb 18 year old are hanging round my neck now in my 30s!!
I can’t thank you enough for your input so far and your site in general.
Sara (Debt Camel) says
You didn’t mention a mortgage before.
You have to have stopped paying the debts 6 months before a mortgage application. Otherwise the lender will see the old debts from the payments on your bank statements.
And you need the overdraft settled as soon as possible.
You can also ask TSB to add a default on the overdraft back when your DMP started – that will mean that it oo drops off.
Len says
Thanks for your advice last year. I sent CCA requests in November 2020. One creditor has closed the account as they can’t find the CCA. The others have acknowledged they are looking but that they can’t find it. It’s now been almost 3 months.
Would you advise I stop paying stepchange now and cancel the DMP? Then write to those creditors saying as it’s unenforceable I won’t pay, let me know if you find it? Down the line I might offer a 5% F&F just because I’ve read about people being hassled for the debt even when it’s unenforceable and I think that would be really stressful. Better not to pay for awhile first though?
I think I’m nervous I’ve been so careful to never miss a payment, that to now just stop paying seems counterintuitive!
Sara (Debt Camel) says
Are these all the creditors that are left in your DMP?
Len says
Yes, that’s all of them. I have 6 creditors in DMP (five with debt companies and over 6 years old, no longer on credit file, one overdraft that’s not in default).
Plan is:
– pay off overdraft
– stop DMP and write to other creditors to let them know
– offer a small f&f after a month or two of no payments, just to see
– if that’s totally refused then just leave it at that unless they can find CCA
They’ve all noted debt is currently unenforceable and on hold but please up with payments.
Biggets one is 3k with Link who I’ve heard aren’t very into negotiating.
Sara (Debt Camel) says
That sounds like a good plan to me.
James C says
Hi Sara,
I recently wrote on another of your posts with a claim against Amigo, I had a fantastic outcome with £13,079 refunded. I am now looking to utilise this money to clear my debts and have a clean slate. I have a loan that was bought by Lowell some time ago, there is £1060 remaining and I’ve been paying £10 per month, do you think they would accept a Partial settlement? I’m hoping to use these funds to get a clean slate and save for a mortgage once i’ve build my credit score.
Thanks
Sara (Debt Camel) says
Is the debt still on your credit record? How long ago was the default?
Pam Jordan says
Hello Sara,
I have been reading a lot of information on Full and Final Settlements and wondered whether you can advise me please. My husband and I have had a DMP with StepChange for over 13years, never missed a payment and always up our payment each year. We are both in our mid fifties now and have only been paying the interest on our mortgage. I have a small pension from years ago which I intend to use to offer full and final payments to my creditors in January 2021. We currently pay £475 each month to StepChange. My aim is to offer F & F’s to my creditors whom we owe 19K with 10K of said pension. I’m wondering whether, because I have been a good DMP customer, will this go against me? Will they think I can just carry on as I have been and the debts will be paid in a few years anyway. We really need to start paying off some of our mortgage and I’d also like to see if we can manage a remortgage somewhere so can’t risk any made marks in our credit file. The debts are with Wescott, Link and Cabot.
Thank you
Pam
Sara (Debt Camel) says
How many debts are there in the DMP and what sort were they originally – loans, credit cards, overdrafts, mobile debts or what?
Rib says
Hello Sarah
I had a loan from natwest bank and I was the guarantor
Business liquidity
I told the natwest bank solicitor i can only pay £90 each month for 60 months thats was a total off £5,400
And ther reply was
Dear sir
Re: Balance £21,000
Further to your recent settlement proposals, whereby payment of £5,400.00 was offered in full and final settlement of our clients claim, the offer has been received by our client and upon consideration of the same, the offer has been rejected.
Nevertheless, our client is sympathetic towards your circumstances and in the interests of saving costs in this matter, we ask that you provide an increased offer in settlement for consideration. Failing which, we can look to arrange repayment of the balance why way of monthly instalments.
Yours faithfully
Bank natwest
Can you please advise me
Thank you
Sara (Debt Camel) says
do you have a house with equity?
Rob says
Yes I do have a house
Sara (Debt Camel) says
I suggest you talk to Business Debtline about this debt and your options.: https://www.businessdebtline.org/
mick says
Hi Sara,
I have 2 debts that I have concern with.
The first is for an Halifax overdraft of £10.2k. Default Jun 15. This was a joint account with ex wife (div. 2012). Account was sold to Lowell and was on my experian account for many years. The amount was showing as £0 with Halifax and the full amount with Lowell. The Lowell account is no longer active on any of the 3 major credit reference agencies. Not had correspondence for years.
The second debt is for a Sainsbury’s Loan – owing £14000. Default date July 2015. This debt was sold to Cabot Financial.
A very close friend has offered to pay up to 20% of the total.
I also read in your articles that the likes of Cabot and Lowell will likely send a letter before claim and proceed to get a CCJ.
Could you please help with questions below?
A) If I make an offer in writing does that count as my acknowledgment of the debt?
B) a) Should I first ask for a CCA? b) ask for the CCA and make an offer at the same time? or c) just make an offer?
C) With regards to the overdraft and not hearing anything from them for such a long time (years) do I need to make an offer? – I wouldnt know who to offer it to as Lowell previously purchased the debt and I havent heard off anyone regards this.
D) If I was to make an offer for the overdraft – how do i go about it as I would be asking to settle for both myself and my ex-wife?
Thanks in advance
Mick
Sara (Debt Camel) says
A) yes
B) if you want to make an offer, it’s better to keep things simple and just ask for the CCA first. But a CCA is not relevant to an overdraft.
C) I am sure if they contact Lowell they will happily talk to you about this.
D) Make sure your letter says it is full and final settlement of the joint debt and that if it is accepted you would like an acknowledgement from them in writing that neither you nor xxxxxxx will be asked to make any further payments to this.
mick says
Thanks Sara for the replies.
If a CCA is found – what is your outlook on Cabot accepting an offer of 20% of the debt as full and final?
In regards to the overdraft and not having heard from Lowell for such a long time – what chance do you feel there is that this debt could already have been written off?
Thanks again in advance
Mick
Sara (Debt Camel) says
Cabot accepting an offer of 20% – I can’r really guess. Read https://debtcamel.co.uk/full-final-settlement-rejected/ which looks at why offers can be rejected and see if you can prevent that happening.
It’s very unlikely the Lowell debt has been written off.
Pamela Jordan says
Hi Sara, I’m so sorry for my late reply, I didn’t realise that you’d replied to me.
All were credit cards with exception of the two Santander personal loans.
There are 10 loans left to pay, six can be paid in full as they are all under £200 the other four are:
7631 Santander personal Loan
5144 Santander personal Loan
These are both with Wescot
The other two large ones are with Cabot and I think were originally Mint credit cards and balances are 3902 and 2070.
I have approached Step Change to act on my behalf but I think I would be better off doing it myself as I’m not sure how hard Step Change would work that hard to get a good deal. Also I have to do an updated budget, should I do it as it stands now or how it would be if I were to start using the money saved on DMP (assuming my offers were accepted) on reducing my mortgage. I have checked our credit files and they are all clear of the debts and have been for a few years. Should I ask for the CCA’s or just go straight in with offers and what should I start with. I am very nervous of digging this all up again but am so eager to get them clear and concentrate on the mortgage side of things.
Thank you so much for your time and help
Kind regards
Pam
Sara (Debt Camel) says
I would say do it yourself and ask for the CCA agreements first – StepCahnge won’t do that.
Ask for the CCAs first. Don’t think about an offer until you know if they have the CCA.
Are all the debts off your credit records?
Pamela Jordan says
Hi Sara,
Thank you for the reply. Yes, they are all off of our credit records. I will request the CCA’s in the new year and in the meantime. Need to update my budget with StepChange. Shall I keep it as it is with paying the £475 a month or should I show it as paying the extra on my mortgage payments and offer low monthly payments to my debt management. I’m thinking that if I reduce my payments considerably then I stand a better chance of full and final settlements?
Happy New Year to Sara and thank you for your help 😀
Sara (Debt Camel) says
really you want to start paying more to your mortgage – how long until it ends? how large is the mortgage?
ypur creditors are less likely to accept a low settlement amount if they are getting a lot each month
Pamela Jordan says
Hi Sara,
Our mortgage is large at 174K and we only have seven years left on the existing mortgage. I’m hoping someone somewhere will let us remortgage and I’ve seen some companies offer retirement interest only mortgages, not that we’re retired yet. I just want to stay in my home for a good while longer. I want to use the money saved from not paying into a DMP to pay into existing mortgage to show that our circumstances have changed and we can afford to start paying off. Hindsight is a wonderful thing and I wish we’d concentrated more on paying off mortgage than trying to pay off massive debts but I was so scared they would try to take our house away! Do you think reducing our repayments drastically will cause our creditors to start contacting us again or are they happy with any amount they can get?
Thank you Sara
Sara (Debt Camel) says
How much equity do you have?
I think you should ask for those CCAs right away. As the debts are so old do this for all loans, credit cards, catalogues, even the small ones (well not under £50!) and even those which haven’t been sold to a debt collector.
You are in a VERY difficult situation. If some of these DMP debts are unenforceable you need to stop paying them, not offer settlement amounts. You need every penny you have for the “real” debts and your mortgage. Until it is clarified which of the debts are enforceable it is hard to make any decisions. I strongly suggest not taking any money from your pension until you know the full picture.
Sara (Debt Camel) says
You could talk to National Debtline on 0808 808 4000 about this. Or indeed StepChange, but StepChange are never keen on asking for CCAs and I am not sure you have had great advice from them over the years…
Pamela Jordan says
Hi Sara,
I think our house is worth about 300K. I will ask for the CCA’s and take it from there. I wasn’t going to draw any money from the pension until I knew for sure I needed to. I was going to pay the smaller ones of to make things simpler but you’re right if they’re not enforceable then why pay. Thank you for your help Sara
Nicky says
Hi Sara
Could you please advise me? I have an existing DMP with StepChange for several Credit card debts – all defaulted. I have asked for CCAs for all. Two accounts with PRA are confirmed (by PRA) as unenforceable, so I asked StepChange to stop payments, which they did. I am still meeting my other payments through StepChange for the enforceable debts.
On these two accounts, PRA last received payments in October 2020. I told them I would not be making further payments as the debt is unenforceable. They are contacting me by phone asking me about income/expenditure and want me to enter into a payment plan with them rather than StepChange.
What are my rights? Do i have to have any contact with them? Can they ask for my income and expenditure? They do actually have this through StepChange as PRA also manage one of my enforceable accounts.
What if my situation improves, which i think it might next year, and I may be able to pay off some of the enforceable debts as full and final settlement offers.? Do i have to keep them updated on my income / expenditure or can I just ignore their contact until they provide evidence if enforceability? What might happen if I ignore them?
Thank you.
Sara (Debt Camel) says
They can contact you about the debt but this shouldn’t be excessive. I suggest you keep a record of all contacts.
You don’t have to waste time supplying them with any information or arguing with them. I suggest you get a very simple and short reply and always say the same thing eg “You confirmed in September that these debts are currently unenforceable so I will not be making any payments to them unless that changes.” Then put the phone down.
Nicky says
Thank you. I will do that. It makes me feels sick each time they call, whether I answer or not.
So even if paying the debts becomes affordable to me in future I do not have to restart payments?
In your experience after an amount of time receiving no payments from me, would PRA try and sell the debt to another debt collector? My biggest worry is that someone starts knocking on the door. And how long might I have to be prepared for that to be the case? 6 years from my last payment as in statute-barred debt?
Sara (Debt Camel) says
Not unless they manage to produce the CCA agreement! Which almost never happens. You aren’t not paying because you can’t afford it, you are not paying because the debt is unenforceable.
If PRA sell it (this doesn’t often happen), you immediately tell the new debt purchaser that PRA acknowledged the debt is unenforceable and you will not be making a payment unless the CCA agreement is produced.
No one is going to pay good money to send someone round to your house to knock on your door when you know your legal rights.
Nicky says
Thank you so much, that’s very reassuring. I’ve read up on statute barred credit card debts, so whilst hoping that they don’t find the CCA, should I now also be aiming to avoid any written communication with them? Or anyone they sell the debt to?
What happens if I move house? Do i need to update them with my new details?
My understanding is that if I don’t acknowledge the debts for 6 years they are then statute-barred which would give an extra layer of protection if the CCA were to turn up.
Thank you.
Sara (Debt Camel) says
I am not a fan of trying to avoid written communications. Very very few CCAs ever turn up. And many people find it much more stressful to be ignoring things than to reply with a simple and firm “I will not be paying.” which is quite empowering.
And if you move it is a big mistake not to tell the creditor your new address.
Nicky says
Thank you so much for your quick replies on this. It’s been really worrying me and I appreciate getting some clarity on it.
Tina says
hi I have a dmp set up with step change. I have been on it since roughly 2016 and due to finish in 2024. I have a balance of 10,300 remaining. I gave recent inherited 6500 which I could use all.of it to pay off my debts?….could I ask my creditors for a full and final settlement?(roughly 63%of what I owe) .
thank you in advance
Sara (Debt Camel) says
yes you can.
if you have any other debts outside your DMP you are paying interest on or important bills, they should probably take priority though.
Tina says
thank you Sara for your quick response.i have no other debts bar mortgage and car repayment.
M says
Hi Sara I have asked for the CCA’s from my creditors and have been informed that they cannot provide these at present. I received these replies in October 20. I want to get rid of these debts and offer of 5 percent as full and final settlement. Is there a template I can use for the wording ? The one on national debt line site doesn’t mention that the debt is unenforceable.
Sara (Debt Camel) says
are you still making payments to these debts?
are these debts showing on your credit record?
are they marked as defaulted, if so what default date?
M says
No I’m not paying now since they cannot produce the CCA and they are not showing on my credit record.
Sara (Debt Camel) says
good, I don’t think they take you seriously until you stop paying!
There isn’t a template for this. It can just be incredibly short, your circumstances are irrelevant so there is no need for you to explain why this is all you can afford and you should refuse to prove an income & expenditure sheet. They have told you the debt is currently unenforceable, you do not intend to make any further monthly payments to this but are prepared to offer them £x if they will take this in full and final settlement of the debt.
M says
Many thanks Sara I will do this.
M says
Just another question Sara I’ve looked on my credit report and under ‘settled accounts’ it shows that one of my accounts that is with a creditor is showing a nil balance(nothing owing) and that it was opened in 2007 and settled in 2018. I was on a DMP with a company for years, but not now, and when they ceased trading they told me that some debts had been settled but I never received anything in writing. How can I tell if this settled account on my report is right, the date opened 2007 is correct tho but there is no account number mentioned so how do I know it’s the right one?
Sara (Debt Camel) says
I think you need to ask the creditor to confirm it.
M says
Hi Sara I have been in touch with my creditor as the debt was showing on my credit file as settled in 2018 opened in 2006. They have come back to me saying it is still outstanding?
I had already sent a letter back in August 2020 asking for the CCA which they could not provide.
Also I have made a 5% Full and final settlement offer to a different creditor who also could not provide me with the CCA, these debts are not showing on my credit file, they have come back with a counter offer but its not a figure I can afford at present. When I offered the F&F I stated I would not be paying anything further. They came back with this counter offer but also said if I don’t accept it they will continue to contact me, knowing Cabot they will and they are persistent. Should I respond and what should I say?
Carl says
Hi Sara,
Just looking for a bit of advice. I split with a partner in 2012 and unfortunately all debt etc was in my name. I got into financial trouble and defaulted on them all resulting in numerous nasty letters. I went to my local CAB in 2013 and negotiated with debtors to pay a token £5 per month to each which I have done so to this day.
All of the debts have been sold onto external collectors, all were credit cards (capital one, Halifax and Barclays) and I now deal with PRA Group, Lowell and link respectively. Amounts outstanding are approx 3.8k, 9k and 7.4K respectively. The accounts were originally started 2003, 2004 and 2013.
All the debts have now come off of my credit file and I would like to be able to see if I could negotiate a settlement to get rid of these ideally, I potentially have access to some money inherited by my mum who would like to help me clear them and start a fresh. Lowell did write to me last year to offer an 80% discount however was still a bit too much for me to afford. Where would be the best place to start with these?
Thanks,
Carl.
Sara (Debt Camel) says
Those are old debts. I suggest you start by asking the debt collector to produce the CCA agreement for the debt – if they can’t, the debt is unenforceable in court and you can literally just stop paying them. See https://debtcamel.co.uk/settlements-old-debts-cca/
It is very likely that at least one of these three debts is not enforceable, and it may even be all three.
Den says
I currently owe a credit card company just over £12000. It was opened in 2007 and I have been in default since August 2018.
The debt accumulated due to unemployment. I worked between Mid 2018 and this November but I am now unemployed again. During this 2 year period I paid off other debts including a large overdraft but have been unable to address this one. Stepchange advised a DMP but for various reasons, illness etc I did not complete the process. I was last in touch with the card company in October 2018 and the account is on hold with no charges or interest and this is shown on my experian credit report. They contacted me once in May 2019 but nothing since.
I recently inherited some money and I feel I should pay off some of this debt but was thinking of offering a low full and final settlement. This is because I am worried that at age 61 I may well struggle to find a job now. As I am currently renting privately I am concerned about how I will
afford accommodation in the future as although I am in receipt of a private pension this does not cover my rent let alone other expenses. I therefore need every penny for the future. Would this way forward be the best option for me? I am wondering if i should just try and wait for another 4 years or ask them to produce a CCA now and try and get this issue out of the way.
Grateful for any advice
Many thanks
Weatherman says
Hi Den
If the credit card company still owns your debt (they’ve not sold it on), they’re quite likely to be able to produce a CCA.
You could try a full and final offer with them, if you want to get this debt off your mind (and make sure that they don’t try to get a CCJ in future). There’s no guarantee that they will accept it, but if you use the sample letter linked to in the post and include an income and expenditure form, you’ll have as good a chance as you can.
Have they told you how long they’re putting the account on hold for?
It also sounds like it’s worth having a look at what benefits you might be entitled to, if you haven’t already. As long as your income or savings aren’t too high, until you reach State Pension age you can claim Universal Credit, and even after that you can still claim Housing Benefit.
It could be worth talking to a benefits adviser at Age UK or Citizens Advice about your options, as depending on your situation there might be other benefits to help you get by a bit more easily.
Den says
Hi Weatherman
Thanks for your reply. I have’nt been told if they have sold it on but would assume not as I have’nt heard from any other company. They have,nt stated how long the account is on hold for either. I will look into the benefits situation but would doubt I am entitled to anything as the inheritance would be too much i think.
Sara (Debt Camel) says
I think your currenty situation sounds very uncertain. Do you mind saying how much you have inherited? Is it so much that your benefits are affected?
If it is less than that, then I would be inclined to wait and see how things go eg whether you can get a job and whether you actually need to spend some of this money.
Den says
Hi Sara
Thanks for your reply. I am not quite sure exactly how much the inheritance would be but in the order of 50K or so. From what I know this would be far too much for me to claim any benefits.
At the moment I am thinking of putting aside enough to cover the debt if required and waiting to see what happens. Assuming the card company do not contact me soon I was hoping that if the situation goes on for a while longer they might be willing to take a fairly low final offer? I need to preserve as much as possible for future eventualities, especially if another job does not come along.
Sara (Debt Camel) says
ok that is too much to claim means tested benefits.
Strangely at that point it may not really matter if you get a very low F7F or not. You settle the debt then you have to use your inheritance to pay all your living costs. before it drops so low you can claim benefits – you can get some part of your benefits when you have under 16k in the bank and full benefits when you have less than 6k.
So a low settlement just postpones the point you can claim benefits, it doesn’t really leave you much better off unless of course you can get a job and don’t need benefits.
So as at the moment you don’t have this money, I would park looking at what to do with it until it arrives. The debt may have been sold to a debt collector by then. You may have a job. review the situation then.
Den says
Ok Sara many thanks, I will wait and see what transpires. Appreciate the advice.
Best regards
Steven says
Hi Sara,
I have a Credit Card that defaulted last year February 2020 (£5400), I had a DMP in place as I was the only earner due to my partner being made redundant that mixed with being on Furlough, I had only enough to cover priority bills and living.
They came back with a reduced payment but the people who put the DMP in place weren’t really helpful and the plan was very close to the wire. I’ve failed to pay the last 3 months and now it has been passed to a debt collection agency(Arc Europe) who then reassessed my income and expenditure to find I was short £200 a month.
I have outstanding £4860 but I have the option of a family member gifting me an amount of money in order to try and wipe it out but I’m very fortunate to take this and the smaller the amount I take the better. I’m not sure how much to offer as a Full and Final settlement!
Could you please advise on the best course of action?
Sara (Debt Camel) says
is this your only debt?
This is very soon after the default – the lender won’t take a low amount.
Why not just wait another 6 months or a year and then see what your finances are like and what the creditor might take at that point?
Steven says
No, I have 4 other debts but this one has just been a pain from the start.
I just want to make it clear that Arc Europe (who I’m assuming bought the debt from Nationwide) essentially said that after they assessed my expenditures and wages I didn’t have enough and pointed me to the National debt helpline.
I was thinking about offering £2000 to settle it but, I’m very apprehensive about doing that.
Sara (Debt Camel) says
But they aren’t being a pain any more – they have done the right thing by suggesting you talk to National Debtline.
It woukd be foolish to try to settle thus one and not consider the other debts – which one if them will next be sold to a debt collector that will “be a pain”?
Don’t waste this possible gift on one debt that is no longer being difficult. Take debt advice on your full situation and then make a good decision on your options.
Caroline says
I have recently accepted an offer on my property which clears my main mortgage. I do however have a secured loan on the property (originally with Welcome Finance first taken out in 2005/6) now with Cabot. There is going to be very limited money left for a settlement possibly £3,000 the original debt was £17,000. For a number of years I have disputed this loan as to say the least I was severely influenced in refinancing the debt on at least 3 occasions, the initial loan was for £5,500. I have previously asked for a settlement offer which was refused and I have also contacted financial regulators in relation to this debt. I have also received ppi compensation in relation to this.
Following having counselling I have now recognise that the stress of the secured loan has caused me immense difficulties over the years and I now feel it better to face it. I am not buying a new property and have no savings , do you think they will consider this settlement? And what would happen if they do not accept the offer? Can they stop the sale ?
Thank you for any advice you are able to provide.
Weatherman says
Hi Caroline
Firstly, I’m sorry this situation caused you such a lot of stress and difficulty, and hopefully there can be a line drawn under all this soon.
You said you’ve contacted financial regulators – have you ever taken a case to the Financial Ombudsman Service about this debt? Even though the debt has been sold, you might be able to dispute it with the original creditor (and tell Cabot that’s what you’re doing). It might be too far in the past, however, as the FOS has time limits on a claim: https://www.financial-ombudsman.org.uk/consumers/expect/time-limits And even if you can, you should be aware that this might also delay your property sale.
It’s possible that Cabot would agree to lift the charging order and instead accept a full and final settlement (make sure what you can offer takes into account any estate agent or solicitor fees for the sale!). They’re more likely to accept this if the offer on the property is at its market value and they see little likelihood of its value increasing in coming years – so you should write to them and explain the situation, including details of any valuations you’ve had and any other offers you’ve received.
Weatherman says
If they still won’t accept then unfortunately yes, they can stop the sale. If this happens, you could simply walk away and agree to a voluntary repossession. But this can have lots of significant consequences on your credit report and housing situation, and you’ll still be liable for any shortfall in the mortgage, and some or all of the debt to Cabot (the property will be sold at a discount to its market value, probably through auction). This would now be unsecured debt, so able to be included in a DRO or bankruptcy.
It’s a difficult situation. Have you ever had any debt advice, e.g. National Debtline? You can ring them for free on: 0808 808 4000.
M says
Hi Sara I made a 5% full and final settlement to one of my creditors which was rejected. I had asked for the CCA which they haven’t produced so they haven’t received a payment from me since August 2020. A couple of days after receiving the rejection letter I received correspondence from them, Intrum, titled Account Assignment and it went on to say they were the legal owner of the debt and that the full outstanding balance is now due £2955. And if they don’t hear from me I’ll be contacted by them. They haven’t actually acknowledged that they can’t produce the CCA either. Should I respond to this letter?
Sara (Debt Camel) says
Can I be clear, did you ask the original lender or Intrum for the CCA agreement?
What sort of debt was this? When was the account opened?
Is this still on your credit record, in which case what is the default debt on there?
Did you ask why they hadn’t responded to your CCA request – was the £1 cheque cashed?
M says
I asked Intrum for the CCA, it was a credit card opened 2007, it’s not on my credit record and they haven’t cashed the £1 cheque. I did send the letter recorded and it was delivered.
Sara (Debt Camel) says
Then you need to phone them and ask why you have not yet had a response to your letter. Many firms post handling has been more complicated because of Covid-19. At the moment you cannot assume they can’t produce the CCA agreement.
M says
Hi Sara I have spoken to Intrum regarding the above and said they haven’t been able to obtain the CCA obviously just didn’t bother to tell me! I had offered a 5% F&F which was rejected as with my other creditor Cabot. Cabot wrote to say that my offer was rejected but came back with a counter offer but this is more than I can pay, shall I write to tell them this? and that they will still continue to contact me, what is classed as reasonable contact? And what can I do if they are harassing me?
Sara (Debt Camel) says
Have you now stopped paying Intrum?
You cannot make a creditor accept a F&F offer. If they refuse, just forget it and tell the creditor you will not be paying them while the debt is unenforceable.
Creditors are allowed to contact you about an unenforceable debt but they should say in every contact that the debt is not enforceable. If they do not say this, send them a complaint saying they are in breach of CONC 13.1.6 (see https://www.handbook.fca.org.uk/handbook/CONC/13/?view=chapter) and ask them to stop sending requests for payment that do not make clear the debt is unenforceable.
If you get communications that correctly say the debt is unenforceable, then get a standard reply saying you will not be paying them while the debt is unenfoceable. literally copy the one you sent last time. And keep a record of how many you get. In most cases the debt collector will soon give up if you don’t look as though you are going to give in.
If you think you are getting too many, come back here. But it’s rare – they do decrease to onece every six months or a year after a while. think of it as a game rather than harrassment.
Paul says
Hi,
I need advice please.
I will have £1250 available cash in 10 days and don’t know what to pay off in an early settlement. I have 2 credit cards that I want rid of. Fluid and Aqua.
Fluid balance in £1820 been offered £1225 as a settlement figure.
Aqua I need to pay the balance of £850.
Any help would be appreciated. I don’t have defaults on these cards and not in any payment plans.
I just want rid.
Thanks
Paul
Weatherman says
Hi Paul
Do you mind me asking why you want to get rid? Have your circumstances changed? Or are you just sick of the sight of your statements?
Unfortunately there’s no easy quick fix here if your creditors won’t both agree to settle for a total amount that you can manage. And if you have no defaults that suggests that so far you’ve been keeping up with payments, so the companies probably think they’ll eventually get repaid in something close to full, and they’re not likely to settle for a much smaller amount.
One option would be to pay off the Aqua, then put the remaining £400 towards the Fluid – at least then you would only have one credit card of about £1400 left, and you could work at chipping away at that. Might feel more manageable!
But before you do that, think about whether you want a formal insolvency option, like a DRO or bankruptcy. If you do, you should be careful to repay the same % of all your unsecured debts (including any others you have). Otherwise you might well be seen as having given preferential treatment to one creditor over another – and that can stop you getting a DRO or bankruptcy.
Emma says
Hi, Can I use a F&F settlement with someone who isn’t a company, its an ex friend who lent me money then demanded it back earlier than the agreement we made when they lent it, I have paid back a lot of it, but now have an inheritance which I can use to pay off debts, so my question is would this once put in writing stand up in court, if she agreed to accept a smaller amount.
Weatherman says
Hi Emma
Yep, a full & final settlement can be used with anyone. If you had it in writing that it was agreed, a court would consider the debt settled.
(It’s also – hopefully! – unlikely that your friend would ever take you court. But if she did, that would be a good defence. As would that your friend has seemingly changed the initial ‘terms’ of the agreement, if you have that agreement in writing.)
Pete says
Has anyone got experience with link financial have a debt of £2700 have offered £900 as full and final settlement they will get back to me in a few days think 33% is a fair offer
Sara (Debt Camel) says
That depends how old the default is and what you have been paying. Without the circumstances a third could be a generous offer or daftly low.
Pete says
The default is around 3yrs old and have been paying £5 a month have also advised then I’m facing redundancy in June so just want this cleared
Sara (Debt Camel) says
In that case £900 sounds like a lot to pay now. Whether it is “fair” or not, you probably shouldn’t pay this.
If you are facing redundancy it would usually be much better to carry on making a low monthly payments until you have found a new job, as until then you don’t really know how much you can afford. You may need that £900 for essential bills and living expenses. See https://debtcamel.co.uk/redundant-debts/
Pete says
Ok thanks it was a refund from a different creditor so was going to just transfer it to this debt as its money I didn’t have a such ill read the link above thank you
Daniel says
Hi Sara,
I have an old credit card debt (default date c. 5 years ago so not yet statute-barred, and no CCJ has been taken out) for around £6000. Debt was passed to a collection agency a long time back and as I emigrated from the UK back in 2016, I didn’t know about it at the time. I’ve had no contact with them, nor made any payments, since then (I’ve been living abroad, as mentioned) but now have received an (unsolicited) offer from them by email for F&F settlement for 25% of the total amount – so around £1500.
As I’m not in the UK and have no assets there – and no immediate plans to return – then I don’t have much to worry about from a practical perspective, but I’d prefer to settle for peace of mind if I could afford it. Given my circumstances, do you think it’s worth my offering an amount I can afford – say 10% or perhaps 15% of the total? From their perspective, they have no way to recover any amount from me unless they agree a settlement with me, and would presumably prefer something to nothing. From my side, I can afford £600-800 (though not really much more) and would like to just resolve the issue if possible.
Thanks for your advice.
Sara (Debt Camel) says
It’s possible. But that sounds like quite a bit of money for you (if not for them) so don’t offer more than you can really afford.
You could also read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ as the debt may not be enforceable if the debt collector doesn’t have the right paperwork. If you want to talk to a debt adviser from abroad you can phone national Debtline or use their webchat: https://www.nationaldebtline.org/contact-us/
Garry says
Hi Sara,
I was in a DMP for over 10 years. I took you r advice regarding the last 6 debts which were 30k and requested the CA Agreements.. They all initially failed to produce but then 2 have sent them.. One was very clear as it was originally Egg. The second Barclaycard they only sent a piece of paper with the terms and conditions on it which also said credit agreement. I presume that is what they had to supply and not the application, even a blank application. I owe 8.3K and I was going to offer 5k as full and final settlement, does this sound reasonable. Thanks
Sara (Debt Camel) says
See https://debtcamel.co.uk/ask-cca-agreement-for-debt/#How_can_you_tell_if_it_is_right for whether what you have been sent is correct and who you can talk to about this to get it confirmed – that is not me.
That sounds a very large settlement offer for an very old debt. Do you have that money in the bank? You should NOT borrow to make this sort of settlement.
Anny says
Hi
I have around £21k in credit card/catalogue/loan debt. I am currently in a DMP with Payplan and have been paying £250 per month. The past 8 months my payments have been reduced to £50 a month as I have been on maternity leave (SMP) but this will go back up to £250 from next month as I am going back to work.
I have been in the DMP for about 2.5 years.
I am due a large compensation payout (hopefully around £10k) for an accident I have had which I would like to use to repay my debts (a very long and hard lesson I have learned!!). Hoping this will happen this year and I might be able to get a F&F settlement so that my payout will cover a large whack of the debts so that I can come out of the DMP and pay them off the normal way.
My in-laws are hoping to help us out with a large deposit (around 10-15%) for a mortgage, I earn £33k and my partner £22k, he has excellent credit score. Just wondering if any lenders would be at all likely to lend to us in this situation? Obviously my credit score will be low for the foreseeable future but won’t be applying for mortgage until my debts are more manageable and the pay out has been used to clear the debts as much as possible.
Not sure if it makes any kind of difference but we currently rent at £800 a month and I was approved for this without a guarantor. We have been renting for 2 years and have been completely up to date with payments, never missed any.
Many thanks
Sara (Debt Camel) says
Will you be getting extra childcare costs when you go back to work?
How definite is this compensation payment, has a court case been settled?
Anny says
No extra childcare costs, we are just entitled to the tax free childcare scheme so will be using that
Compensation payment is almost definite, have had a court order to say that it will be at least £10k just awaiting the final parts to be put in place
Thanks
Sara (Debt Camel) says
So the most important think for a future mortgage is to get the current DMP debts settled as soon as possible. That makes it look to a lender that your problems are long in the past.
Is there a chance your nice in-laws could offeer you the money for settlements now and thengive you 10k less later as you will then have the compensation payment? This can help getting F&Fs because the money is coming from someone else, so they won’t be thinking you could perhaps afford more. And you could then get the DMP sorted much earlier.
Ali says
Hi,
Please can you help me, I had resolve call turn up at my door over a Cabot debt for £2,500 the default already dropped off my credit file but I can see my last token payment through dmp was June 2016 so not SB yet. The original lender was post office credit card taken out in 2011 or 2012 I’ve got a cca request letter to post, will this request restart SB clock? I feel I have no over choice as I can’t cope with door step visitors. They handed the calling card to my landlord who lives directly opposite me which is really embarrassing. I have other debts but they are not chasing aggressively so I’m not overly bothered about them at the moment.
Weatherman says
Hi Ali
Unfortunately there is a risk that sending the CCA request restarts the statute-bar clock, yep.
If you have (for example) a mental health condition that makes doorstep visitors particularly distressing, you can tell Resolvecall and Cabot, who should take this into account when dealing with you. You could also complain about Resolvecall embarrassing you by giving the calling card to your landlord (why not just post it through your letterbox?!).
Even though you’re not too bothered about your other debts at the moment, I’d really suggest speaking to National Debtline – so you can try to head things off before they start chasing you in the future! They can also give you advice on dealing with this debt. There are some solutions that can write your debts off altogether, which might be suitable for you, and would stop your current stress and the risk of future stress! Their number is 0808 808 4000
Sara (Debt Camel) says
I would suggest not worrying about re-setting the SB clock. It’s 18 months away, this is a large debt, it is incredibly unlikely Cabot will let this go SB without going to court.
Carole says
Is 80 percent a good offer to make for a final settlement of my debts. I have been on a DMP for three years and have paid 14.000 pounds with 17,000 remaining
Weatherman says
Hi Carol
Unfortunately there’s no simple answer!
It sounds like you’ve been paying quite a bit towards your debts under the DMP, so your creditors might decide if they just wait they’ll get the full amount in just a few years more, so not accept your offer.
But 80% is a big chunk of the debt to receive right now, for certain. So it might be attractive to them.
Do you mind me asking what’s the reason for going for a F&F settlement at this stage? Do you just want it out of your hair, or is there another reason?
Sara (Debt Camel) says
where would the money be coming from? If this is a gift, then fine. But if it is a loan from family, then this may not be a good idea. a 20% reduction really isn’t very much. These debts are now frozen and getting older, it may not be a good idea to change them fro owing someone in your family a large debt. They may be ok for money now, but if their situation changes they may need repaying faster than you can manage,
All your debts are defaulted now I guess? Have you looked at your credit records? Your score will not improve when you settle the debts if that is what you are hoping.
Can you carry on with the DMP payments or are they too high which is why you want to setle the debts?
Carile says
I want to sell my house and pay off my mortgage and my debts and start a fresh. If I could pay the full amount I would but that’s not possible with what I owe on my house. All the debts have been sold on and rather than ask for CCA ‘s I just want to repay. By the way thankyou for getting back to me and I am learning so much from this site.
Sara (Debt Camel) says
So this is totally your decision.
But all your debts have been sold. The debt purchasers will probably have paid between 1p and 10p in the pound for your debt. I suggest that ther is no moral or ethical reason why you should want to repay them in full.
The more moeny you can retain at the end of thsi, the better placed you will be for the future and the less chance there is of getting back into debt.
At the point where you have sold your house if you them offer them 80p in the pound I would expect them to very happily accept.
Carole says
I would not have paid the debt off for another 5 years and at 58 and my husband is 60 I do not want to carry on paying for another 5 years.
Toni-Ann says
Hello Sara,
Lovely article this has really helped answer some my questions already. I’m currently 23 and I started my DMP October 2019 with a total balance of £14,524 (7 CC’s and 1 Very account. I took these products out at 18 and spiralled into debt due to getting new offer letters and increased limits. If I knew what I knew now I wouldn’t have gotten any above my income.
I’m quite focused on paying the debt off this year as I have the freedom and flexibility of WFH and doing overtime. I increased, my monthly payments to £252 but would like to pay the remainder (£13,021.14) of my DMP off this year.
I owe a family member £900 which will be paid off August 2021 so I’m going to increase my payments to £402. However, I’m thinking of doing a F&F payment of around £7-9k so 60-80%. But, I’m worried I won’t be accepted due to me increasing payments, only missing December 2019/January 2020 payment and my age. I would really like to save for a deposit and all my income to be mine that’s why I’m steering towards this. What are your thoughts on this please.
Many thanks in advance if you have the opportunity to read this
Sara (Debt Camel) says
there isn’t a downside to offering a F&f – it may be rejected but even if only a few are accepted, that will help, won’t it?
At the moment I would be inclined to leave your DMP payments the same and clear the family debt sooner.
Toni-Ann says
I see, I thought so. I’ve recently spoken my DMP customer service and the advisor stated that if I do partially settle then this will result in my CF being impacted for 6 years although I’ve already defaulted on most of my accounts. I was under the impression the defaults are removed after 6 years so if I partially settle now then due to defaulting already they’ll go along with the defaults.
Sara (Debt Camel) says
Your DMP adviser is wrong – which DMP firm is this? If your credit record has been defaulted already, it will drop off in 6 years whether you settle the debt in full, patyially or you are still plodding through your DMP.
Peter says
I wonder if you can help again now. I have now got to the stage where all debts on the DMP now have a default date longer than 6 years ago and have now dropped off my credit file. Next question, can I now safely stop paying without redress or do I need to reach a settlement? I need to not have a DMP as I want to get a new mortgage and want to honestly answer that I don’t have a DMP if asked (albeit I know unlikely) during the application process. Many thanks
Sara (Debt Camel) says
If you stop paying, the creditors are likely to go to court for a CCJ. See https://debtcamel.co.uk/debt-not-on-my-credit-file/
If you carry on paying, the mortgage lender will see the payments on your bank statements and know you have a DMP.
You either need to settle these debts or you could consider asking the creditors to produce the CCA agreement, see https://debtcamel.co.uk/ask-cca-agreement-for-debt/
Harriet says
Hello, great article and some reply helpful comments here too. I am wondering if you can help me, please?
I have completed my house sale finally – it was a long-drawn-out process due to an abusive ex – after many years of separation the house is finally sold, mortgage cleared and I have a remaining £10,091. I am hoping to use this to clear some of my debts with F&F offers. I fell on hard times after escaping the abusive relationship and struggling through the courts to finally be free, a lot of the debt was caused by my ex but all in my name with no way of proving ex caused it so I accept it is down to me.
My debts are as follows:
Barclay Card (sept2009)
Default date – sept2018 – I have not paid anything since the default date
Currently with LINK financial. £11,728
Paypal (Jan 2017)
Default date – dec2019 – I have not paid anything since Aug2019
£4,203
STREET UK (Nov2016)
Default date – unknown – this is a complicated one as it only shows on one credit report and is showing as ‘settled’ despite the figure being high still’
Showing as settled from June2019 £17,589
I would like to split the money from my house sale to clear these with F&F offers. I have no other debts and have completed and income and expenses document I hope to send to the creditors to demonstrate my financial situation. I have only £39 per month spare after all expenses are paid to share between them so it would obviously show to them these debts would take a long time to clear on a DMP
I am hoping to offer
BC (Link Fincaial) £3500
Paypal £1250
Street UK £5250
This would completely add up to my £10,000 from my house sale – working out at about 29% of the totals owed.
My new partner thinks I should start by offering them less even as low as 10% aiming to be able to clear the debts with 20%. He thinks offering less would be beneficial as it gives some ‘wiggle room’ should they not accept. But also he thinks it would be sensible for me to put some money aside just in case with everything that’s happened in the last 12 months with COVID and although I am on furlough my job is not 100% secure. (I am pretty sure it will be but I know my company has struggled through the pandemic)
He also thinks I should speak to step change and ask them to help me with this not contacting them myself. (all contact will be by recoded letters)
What are your thoughts, please?
Sara (Debt Camel) says
You need to be clear who owns each debt.
The Barclaycard one is very likely to have been sold to Link, so any F&F would need to be negotiated with Link.
The Street UK loan has probably been sold to a debt collector which is why it is showing as settled. To find out who, you need to ask Street UK.
The Streeet UK loan is very large and their interest rates are high. Did the loan repayments cause you prblems from the start? I suggest you read https://debtcamel.co.uk/refunds-large-high-cost-loans/ and consider making an affordability complaint to Street (not the current debt collector). If you win this interest is removed from the debt and the default from your credit rating.
I agree with your partner that you should not be offering all this money now. In fact until you know if you will still have a job in 6 months time, it may not be a good idea to offer anything at the moment. If you lose your job you may get little help from the benefit system if you are living with a partner in work, so you may need these savings to pay the rent and bills until you are back on your feet again.
Instead it may be better to get in touch with the current creditors and offer them £10 a month each token payment and ask them to freeze interest and charges while you are on furlough. See https://debtcamel.co.uk/token-payment-debt/
I wouldn’t use StepChange to make these offer, you can do it yourself. But StepChange can give you general advice on making these £10 a month token payments while you wait to see if you still have a job.
Harriet says
Hello, thank you for your reply.
The Barclay card is owned by Link Financial.
With STREET UK I made 5 token £5 a month payments since the date it is showing as ‘settled’ on the account and they have written to me since. No debt collection agency has contacted me re: the debt nor has STREET UK told me they have.
The STREET UK interest rate is frozen until December 2022.
Would the creditors prefer small monthly payments and not a lump sum? My partner does not work. We are already on UC as my work is P/T (currently furlough) my partner is a stay at home parent fo our kids.
Step change suggested the budget we have isn’t realistic as we have no money put aside for something they normally would see. Yesterday they suggested £1 a month to the credits if they do not accept the offers I send them. Wouldn’t this mean the debt will never clear before my death? I am in my mid-40s so even with 40 years left that’s only paying off £560 each (£1 per month for 40 years).
I saw online tonight that as this is the end of the financial year, COVID aftermath and given the length of time since the defaults would be something to persuade the credits to take the offers, along with a full explanation of our circumstances, how they won’t likely change and an income and expenditure. Does this sound true?
Sara (Debt Camel) says
Are you renting somewhere now?
When StepChange say your budget is not realistic, do they mean they don’t think you have enough money to live on if the debts went away? In this case you need some of the money you have to pay for everyday living expenses. This is why it should NOT be offered as a lump sum until you are off furlough and you know your job is secure.
Your situation seems too uncertain to offer this money when you might need it yourself.
If every goes well, you will be back on your fit and everything will be fine in 6 months. You may have spent a bit of this money but the rest you can then use to make offers then,
But if things don’t go well then you need this money to live on and your credit will have to wait.
This is not the time to worry about 40 years ahead, you need to concentrate doing the right thing now for your family over the next year or two.
It sounds as though you have had good advice from StepChange, can you talk to them about it? And get your partner in on the call so that you both know what is being discussed?
Jay says
Hello Sara ,
I have negotiated over the phone a settlement with WESTCOT about a Barclays loan account. The outstanding balance is around 4642 pounds. I am leaving in Spain and they send me an email saying:
We can confirm your partial settlement offer of £3100.00 has been accepted and we have set the arrangement on the account of £3100.00 to be received by the 3rd April 2021.
We can confirm that our client will only accept settlements as ‘partial’. This would mean that the account will be recorded on your credit file as ‘partially settled’. Our client agrees not to pursue you for the remaining balance and will not pass on the remaining balance to anyone else to pursue. This information will remain on your credit file for 6 years from the original default date. If you were able to repay the balance in full your credit file would be recorded as ‘fully satisfied’.
Is that legally binding proof ? I am worried that in the future they may pursue me for the remaining balance.
Is it safe for me to make the payment or should i ask them for any other method of confirmation rather then email?
Please note that I do not have this money and it will be help from my family to try and sort out my debt.
Looking forward to your answer.
Thank you very much in advance .
Sara (Debt Camel) says
Has this debt already defaulted? Whan was the default date?
Do you have other debts as well?
I am leaving in Spain
Do you mean you are living in Spain? Do you own a property in Spain? In England?
Jay says
Hello Sara, i am Spanish and i live in Spain since 2008 now.
I don’t own any properties. I have in total 4 creditors.
WESCOT, Barclays, Halifax and PRA Group.
With all of them i have arranged a settlement agreement over the phone. All my debts have already been defaulted around six years ago. I am waiting from Halifax and Barclays to send the settlement confirmation letters to my Spanish address as they don’t do that via email because of their internal policies.
Yesterday i paid off with family help one creditor PRA Group, they had bought from Halifax one of my debts of £1,465.78 and we settled for £1,000.00. On the emails we exchanged they said :
We are happy to accept £1,000.00 to clear the balance on this account. Paying this amount will be accepted as a full and final settlement on the account, which means your account will be closed and we will not contact you again about it. I can confirm when we receive the £1,000.00 payment your account will be closed and will not be passed to any other company. This account defaulted on 5th November 2010, it is no longer reporting on your credit file.
Did i make a mistake here ?
Please confirm to me if you can if the email exchanges with creditors are legally binding ?
Do you have any suggestions to my situation ? I do not have money to pay myself my family is helping me and i am under too much pressure and very unsure what to do.
Looking forward to your answers.
Thank you again and kind regards.
Sara (Debt Camel) says
I think you are paying a LOT to settle these old debts. Those creditors probably paid a lot less than 10p in the £ when they bought those debts.
If you live in Spain and have no property in England or Spain, where is the urgency to do this?
Some of these debts may be unenforceable in court as the creditor doesn’t even have the right paperwork.
I suggest you read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ and think about asking for the CCA agreement before you make any settlements. You can’t do this afterwards.
If you are unsure about this you can talk to National Debtline from abroad on +44 121 227 4780
Pat says
Hi Sara, pls I need your advise. About 2 years ago, I did a full and final payment settlement with the debt collection company acting on behalf of my credit card bank. Recently, I received a letter from the bank advising me that a substantial amount if money was refunded, being overpayment ir overcharge of fees on the account when I had it etc, they gave me sbout £200 out of it and kept the remaining thousands for themselves. Is this allowed, given that a full and final payment already took place and my credit record has been adversely affected in the period? Who is entitled to the refund? I wrote them, though did not ask for the money but felt they should have rectified my credit file and they wrote back to ask that I phone them, which I dont want to do as I prefer everything to be in writing but whose money is it anyway?
Thanks.
Pat
Weatherman says
Hi Pat
A very interesting situation. I have to say I’m not entirely sure, but you have nothing to lose by complaining in writing to the company and asking for the full refund amount, and for any default to be removed from your credit report (they might not do this if the default would have occurred even if they’d not overcharged you). I assume the £200 they paid you is what’s left once the correct total debt has been cleared. Your argument is that the debt has been settled, so the refund should not go towards clearing the debt at all.
If they don’t agree, you can ask the Financial Ombudsman Service to look at the case and make a decision.
Good luck, and I’d be interested to know how you get on.
Sara (Debt Camel) says
Unfortunately what the lender is proposing to do is what usually happened when someone got a PPI refund and they had already made a partial settlement on the debt.
Legally I think the lender is enitlted to do this and FOS does not tend to uphold complaints about this. You can try, but don’t get your hopes up.
David says
Hi I have debts off 23k I am putting together an offer of 40% approx 9k
A relative is helping me out and I am going to pay them back
My question is once the creditors have accepted the figures can the relative call up my creditors when I am present and pay off the debts individually via credit card
If so should the relative get a credit card with 0% on balance transfers or 0% on purchases
Sara (Debt Camel) says
How long ago were the defaults on these debts?
Liam says
Hello,
I recently agreed a full and final settlement with a credit company – I initially emailed them to ask about discount on total balance and they provided a ‘full and final settlement offer’ to be paid over 3 installments.
I met this payment plan on time as agreed and when I wrote to the company to ask for confirmation that the debt was now settled, they have replied explaining they apologise but they made a mistake and the amount they offered in the ‘full and final settlement’ was actually the amount of discount they were willing to offer – this was very clearly not mentioned at any point during a number of emails when agreeing the amounts/dates etc and all correspondence was referencing that the amount offered was to settle the debt – again using the term ‘full and final’.
Can they do this? I had finally felt stress-free thinking this was paid and now I have potentially got to find the remainder!
Sara (Debt Camel) says
To check I have understood this, using some made up figures:
Say the debt was £5000 and they “offered” £1500, you have paid 3 lots of £500 and now they say that was a £1500 discount so you still owe £2000?
Who is the creditor?
they provided a ‘full and final settlement offer’ to be paid over 3 installments.
Can you copy & paste in here the relevant section of the first email where they made this offer?
Liam says
Thanks Sara,
Apologies for the delay in responding – I did type a response but it was too long. Amended version below!
The original creditor was MoneyBarn in 2015, but it has now passed onto Arrow Global.
The email from Arrow stated (copy and pasted below):
‘We can confirm the minimum full and final settlement figure available on this account is £1032.97 payable over a maximum of 3 instalments’
I had a second email later on that also stated they had updated their records to show I will make the payments on the full and final settlement as agreed.
They then emailed me after I asked for confirmation that all 3 payments were received as agreed, to say they had been an error and the amount was actually the discount they were able to offer.
Where do I stand on this? Thank you for your advice as always!
Liam says
Also sorry yes your figures accurately reflect the situation :)
Sara (Debt Camel) says
What they wrote was clear – you didn’t misinterpret it. I am assuming here that £1000 was not such a tiny amount that you should have realised something was wrong – you didn’t owe say £20k.
In this situation, a creditor should not try to go back on what they said after so many months.
I suggest you reply to them in an email headed COMPLAINT. Say it is unfair of them to now say you owe more money and this is against the legal principle of Estoppel. Point out you have organised your finances to make the £350 payments each month for three months and you would not have accepted what they are now saying their offer should have been. Ask them to reconsider and mark the debt as partially satsfied, or you will be sending a complaint to the Financial Ombudsman.
(If you have paid less towards credit cards or borrowed money to make these F&F payments say this but don’t make this up if it didn’t happen- if this goes to the ombudsman you may be asked to show this.)
Sara (Debt Camel) says
PS I would be interested to know how this goes!
Liam says
Thanks Sara really appreciate it – I will let you know what happens
Liam says
Hi Sara,
I thought I would reply and update you on this situation.
Arrow replied (with an email full of spelling mistakes) following their ‘investigation’
They essentially gave a timeline of events (already known) and explained that the settlement offer was a mistake. They have offered a compensation amount of £150 but stated they could not mark the account as partially settled. They also advised they initially gave me the wrong bank account details to send the payments to!! Really unprofessional in terms of response and their handling of the whole situation.
I will be replying and advising that I do not accept their findings. I wonder the best course of action here? Should I offer them a few more payments of say £150-200 over the next couple of months and if they do not accept my fair offer, say I will be complaining to the financial ombudsman? Or should I reject their response and advise them I will refer to the financial ombudsman without further offer/delay?
Many thanks for any advice.
Sara (Debt Camel) says
That is very poor. I suggest you reply that it is not treating your fairly (use that exact phrase – “treating customers fairly” is one the FCA’s key regulatory principles) and if they do not clear your balance you will be sending it to the Financial Ombudsman.
I don’t see any reason to pay them any more money until the Ombudsman had looked at what sounds like a good complaint to me.
Liam says
Thanks for your really quick response, I will follow up as advised and get back to you with an update! Thanks as always for your advice.
Jade says
Hi,
I am trying to negotiate a settlement with Link Financial for two old barclaycard credit card accounts which they purchased in 2016. Both accounts have been defaulted and are due to drop off my credit file in Oct 2021 and Sept 2022.
I have been in a DMP with payplan since 2013, I have paid just £1 per month for the last two years to each creditor. All other creditors in the DMP have accepted 30% and I have now paid them.
Link have refused 30% and 35% offers and have said not to bother with about her counter offer as they won’t accept less than 70% – the max I can afford is 50%.
I requested the CCA (over the telephone) and they confirmed that they don’t have it on file so have requested it from barclaycard. I hoped if it wasn’t enforceable they might reconsider my offer?
Any advice on how to go forward from here?? Do I keep paying £1 per month then try again in Oct when it’s dropped of my credit file?
Sara (Debt Camel) says
I suggest you send them a formal written request for the CCA. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/ for how to do this. don’t rely on telephone conversations.
Then just stop paying if they can’t produce the CCA.
They cannot take you to court. The debt will just drop off your credit record 6 years after the default date. There is no need for you to pay them anything. So more fool them for not accepting your 30% offer while they could.
Jade says
Thank you Sarah
I will send a formal letter tomorrow then. Both accounts will drop off our credit file later this year and next year as they were defaulted in 2015 and 2016.
After this point we were hoping to apply for a new mortgage to buy a house (we are currently renting). This was our main motivation for settling everything so that we could get back on the property ladder.
As the debt would still exist even though it wouldn’t show on our credit file would this cause an issue for us potentially?
Sara (Debt Camel) says
If the debt exists but is unenforceable, then it shouldn’t be a problem.
If you just stop paying a debt that is enforceable you could end up with a CCJ.
Or if you are still making low payments the lender is likely to see them on your bank statements.
Daniel says
Dear Sara
Hope you doing well. I hope you can advice me.
I have credit account defaulted on 31/08/2015 which I believe will drop off after August 2021 as it will pass 6 years. I am making a regular payment of £10 to the debt collector(not the original).
My query is that what will show in my credit file after six years which is at the beginning of September 2021? Will the debt collector take the regular payment? if they continue to take the payment what will be the status of the account (default/up-to-date)?
The debt collector offered me 60% off for the F&F. If I pay the F&F now, will this default account will be removed or still show on the credit file as closed account? As, I have seen some closed current bank account still showing on the file for 6 years.
Please advice me as I am in so much worry about this account as I did not get any default notice and discussed this issue with the original creditor who informed that I did not make the minimum payment for three months so they made it default and sold to debt collector. I was helpless and it was my early twenty, I did not take advice from anyone as I was nervous and scared. Now I want to improve my score as I have finished my study and now in full-time employment.
Hope to hear from you soon.
Weatherman says
Hi Daniel
When the original creditor marked the account as in default, they also closed the account. The account will drop off your credit report after six years.
However, the debt will still exist, and can be enforced in court (via a CCJ). So the debt collector will continue to take the payment.
If you pay the F&F, the default will be marked as ‘partially settled’ & the payments to the debt collector will stop. The account will still drop off in August 2021.
Sara (Debt Camel) says
what sort of debt was this originally – credit card, loan, overdraft or what?
who is the current creditor?
Kris says
Hi,
Have been researching into F&F and looking to see if I’m on the right track here. I have a total of £23,700 worth of debt across 5 accounts. They all defaulted in 2018 & 2019. Since Jan 2019 I have been on a DMP with StepChange and haven’t missed a payment. My current debt free date is Nov 2025. At present the debts are with the following (I pay £421 per month to StepChange): PRA – £8241, Credit Security – £6825, PRA – £6701, PRA – £1332, Wescot – £617
I’ve come into some money via my parents and want to start the process of negotiating to get rid of these as my partner and I have a baby on the way and would prefer to not have to pay out £421 a month anymore! The debts have moved around a bit over the years so I’m happy to challenge them on the CCA’s. Do I just contact each creditor and ask for the CCA’s as a first point without explaining anything? Or do I ask for them and say I am looking to settle as I have a baby on the way, and a relative has offered me a one off sum of money to clear the debt. If they refuse I plan on offering a token amount (say £5 per month) as I have increased costs coming/been on furlough for over a year, and play the long game. I’ve read somewhere that it is best to do this by letter but I’d prefer to start the process over the phone and just record the conversations to see if they back themselves into a corner. I don’t mind having awkward conversations with these people…would probably enjoy it!
Any advice appreciated!
Sara (Debt Camel) says
Do I just contact each creditor and ask for the CCA’s as a first point without explaining anything?
yes.
Don’t complicate things until you know if the CCAs can be produced or not.
my partner and I have a baby on the way and would prefer to not have to pay out £421 a month anymore!
At that point you can ask for your DMP payments to drop – probably a lot! That may then be a good point to offer F&Fs, as the creditors will be comparing your offer with what they are getting on the debt through StepChange.
Its natural to want to get this all sorted and out of the way. But the CCA may get rid of some debts. And then your DMP payments falling will make it easier to settle with the others.
Kris says
Thanks for the reply Sara.
If they can’t produce the CCA’s and I just stop paying them, are there any ramifications down the line in terms of credit etc? The accounts will drop off in 2025 and my partner and I would like to look into buying a house together when this happens so wouldn’t want my score to be effected negatively.
With regards to the DMP payments dropping, do I just contact them individually and essentially tell them what I will be offering to pay (next to nothing)?
Thanks
Sara (Debt Camel) says
As the debts are already defaulted on your credit record there are no ramifications if you stop paying, the debt will still drop off 6 years after the default date. If your mortgage application is after the debt has dropped off, it will not be visible to a mortgage lender – providing of course you don’t apply to the same bank that the original debt problem was with!
As you are with StepChange, this is easy – you just contact StepChange and say you need a review as you can’t afford the £421 with your partner going on maternity leave. Then StepChange do all the work of telling your creditors.
Len says
Hi Sara
You’ve been so helpful before, thank you, hoping you can help again.
I requested CCA agreements for my debts (all over 6 years old) back in November, none have been found and so in March I wrote to say I wouldn’t be making payments while those agreements weren’t produced. Said I would if they found them. Link wrote back and are now very keen for me to ring them and have left a voicemail and now a text saying I haven’t been in touch about my account. I’m not sure what I should say to them, just that I will happily arrange a plan if they find the CCA? I don’t much want to speak on the phone but don’t want to ignore either.
Thanks
Sara (Debt Camel) says
just that I will happily arrange a plan if they find the CCA?
Sounds good to me.
Temi says
Hi Sara
I had personal loan with NatWest in 2009 that I borrowed to pay for school it defaulted at£7202 to come off next dec 2022.
I also have a default with Barclay card at £945 to come off aug 2022.
The NatWest went to a debt collector but I believe they then sold it on to another .
But went into default after the lose of my baby and it was hard to get Back into work at the time.
I was thinking to offer Barclays part settlement
And NatWest to ask the debt collectors for CCA in hopes they can’t provide it as I do not have the money to part settle that amount .
What do you think? I have the money to last settle Barclays but as for NatWest even if I wanted to pay it can’t be till next year as I am now on maternity until Feb 2022
Sara (Debt Camel) says
Has the Barclaycard debt also been sold to a debt collector?
Hayley says
Hi,
I have had no contact with debt collector at this time to recover £1012 from catalougue debt. the debt defaulted 23/07/2015 – so am i right in thinking this will drop off statue barred 2021, and if i ask for CCA before this date will that class as contact regarding the staute? i only owed £300 but due to pregnancy and leaving partner couldnt pay and the rest is purely interest! I keep being offered part settlements which i could potentially make with bonus from new job but if a CCA cant be produced (which i have a feeling it cant) then i wont need to and can use that money to pay off other debts. Is that correct,. i want to get this sorted asap and not wait till July if possible but dont want it to interfere with no contact regarding this. interesting to know if i part settle though after it drops it wont go back on as i worried about that!
Sara (Debt Camel) says
the debt defaulted 23/07/2015 – so am i right in thinking this will drop off statute barred 2021
That is the debt the debt will drop off your credit record.
It is not necessarily the date it becomes statute barred, read https://debtcamel.co.uk/statute-barred-debt/…
ask for CCA before this date will that class as contact regarding the statute barring?
yes it will.
I keep being offered part settlements
You are being offered settlement amounts for this debt? If you are, then trying to ignore it and hope it goes statute barred is unlikely to work. If you had no contact, then it is more plausible…
interesting to know if i part settle though after it drops it wont go back on as i worried about that!
Settling in full or in part now will not keep the debt on your record for longer. If it has dropped off when you settle, it will not reappear.
Jen says
Hi Sara,
Would appreciate your advice for a full and final settlement on a CCJ for my dad.
He had a credit card which defaulted in March 2016 with a balance of just over £10k.
It has a CCJ since November 2018.
He agreed to pay £600 in monthly instalments towards the CCJ but couldn’t keep to this, so he missed a few months and then got the monthly payments decreased to £200 a month.
However, he has not made any payments since the lockdown in March 2020.
He has paid £3,400 of the £10k CCJ to date.
The solicitors (for the original lender) have now written and asked him to contact them.
They haven’t threatened any action apart from that they’ll continue writing to him and calling him if he doesn’t respond.
He is now a diabetic and will be turning 66 in June when he’s looking to retire from his key worker job.
I realise that getting a full and final settlement on a CCJ is difficult but I want him to try as there’s still a lot outstanding and he’s only going to be able to afford to pay £50 a month towards the remainder of the balance.
He could use his private pension to pay a full and final settlement in one lump sum.
He is a joint home owner with my mum with no mortgage – does this affect the chances of getting a full and final settlement on a CCJ?
We would appreciate any advice.
Thank you,
Jen x
Sara (Debt Camel) says
The credit card lender to him to court for a CCJ? Or was this a debt collector it was sold to?
Does he have other debts as well?
How large will his pension be? Does he need that pension lump sum for other things – new boiler, house repairs etc?
Jen says
It went to a couple of different debt collectors but then went to a solicitors who said they acted on behalf of the original credit card lender and they got the CCJ awarded.
So, I don’t think it was ever sold to a debt collector.
The solicitors still refer to the original credit card lender as their client.
He does not have other debts.
His pension will be around £50k from what I remember him telling me but I will find out for definite.
He doesn’t need the lump sum for other things or anything in particular.
Sara (Debt Camel) says
OK, so owning a house with no mortgage makes it less likely a F&F offer will be accepted.
What may help though is if he encloses an Income & Expenditure statement from a debt adviser showing when he has his pension what he will be able to afford to pay each month. He could then offer say £3000 saying this would be from his pension lump sum and if they don’t accept it he will only be able to pay them £50 a month, see the IE sheet attached.
I suggest he replies now to the solicitors saying he is going to be taking debt advice as he is unwell and he will be retiring in a couple of months and he doesn’t know what he will be able to afford when he is retired.
Then he can talk to his local Citizens Advice and ask for their help to draw up what his I&E will look like when he has retired.
Jen says
Hello Sara,
Thank you so much for the informative response – I’ll be getting my dad to do just as you have said asap!
Your time, help and knowledge are most appreciated.
Kind regards,
Jen
Holly says
Hi Sara,
I really need your help, as I’ve been burying my head in the sand with debt for most of my adult life, and I feel I am ready to take control.
I have to date 4 credit cards totalling £8,500 at this moment in time and have been making minimum payments for about 8 years.
In hindsight, I should have done a DMP years ago, but getting a mortgage was always on my mind, so I tried to just get it paid. Various things happened over the years which meant I only ever made minimum payments, but thankfully I never defaulted.
I recently heard about settlements, and thinking if I took out a loan, I could hopefully settle the credit cards for a bit less, then rest easy knowing I only have one payment, and would be debt free in 3 years. (A thought, quite frankly, that fills me with joy!!!) I realise that getting debt to pay off debt is an expensive way to do it, but, 0% balance transfers are partly what lead me here, and I don’t trust myself to keep on top of it.
My question is, if I settle the credit cards, will this look bad to lenders? Should I get a loan for the full amount, or try to offer a settlement for the credit cards?
Getting mortgage has always been a carrot on a stick, and I’ve made shit decisions worrying what lenders might think. I got into such a pickle, that I should have DMP’d years ago, and i would be debt free. Hoping that once the loan is paid off, i can apply for a good mortgage.
Thank you for reading.
Sara (Debt Camel) says
The credit cards are VERY VERY unlikely to accept any settlement offers unless you have already defaulted.
What interest rate loan could you get? There is a lot of difference between a 5% loan from a bank and a 25% loan from a bad credit lender…
You say you got into this mess with balance transfers. That a lot of people say. But just as many people get into the same problem with consolidation loans, see https://debtcamel.co.uk/debt-consolidation-avoid-these-five-errors/. This is really common :(
My question is, if I settle the credit cards, will this look bad to lenders?
It’s not really relevant as it isn’t going to happen.
Should I get a loan for the full amount, or try to offer a settlement for the credit cards?
It would have to be the full amount.
You are right that you have made very poor decisions in the hope of a mortgage, which is still as far away as ever. Unless you can get a VERY cheap loan, this looks like it will be another bad decision… get an expensive loan and you will end up a bit short and run up new credit card balances again.
It sounds as though you have had “your lightbulb moment”. I would really suggest going for 0% balance transfers and being determined to pay them down as fast as possible.
Cj says
So we received another letter today from intrum chasing a debt dated 2013..we have asked what’s this is for previously but not told…its from our mortgage company. But we still have mortgage and they not chasing us…the debt is for £225.00 can they still ask for this amount as now 8 years old .they are offering 80%write off if with pay the rest ..
Sara (Debt Camel) says
Have you asked your mortgage company what this is for?
John says
Hi,
I am currently on a DMP through step change have been for around 2.5 years, My combined debts currently sit at £22600 5 debts, 3 loans balances around £12.2k £1.1k and £850. 2 credit cards balances around £6.1k and £2.7k all through debt recovery agencies… Intrum(2 accounts), moorcroft, PRA and lantern. All accounts defaulted around 2 years ago. time estimate from stepchange on current budget review is 3.4 years before being fully repaid. However a family member has found out about my financial circumstances and has offered me £11k along as most the debt or all of the debt is settled. Stepchange offer equal amounts to all creditors. What are the chances of the offer being accepted? Is stepchange the best route or would it be better for me to make offers direct?
Any help would be appreciated.
Thanks
John
Sara (Debt Camel) says
What are the chances of the offer being accepted?
That is hard to guess. Creditors are being offered about 50% – some may prefer that in their hands now, others may be happy to sit back and wait 3.4 years and get it fully paid.
If some accept and some say no, come back here and ask what to do?
Louise says
Hi Sara, hoping you can help. My husband has an historic debt of £7500. It is no longer on his credit file.
He received a letter from a solicitor firm on behalf of a client who had bought the debt offering 80% discount for full & final settlement if paid within 7 days.
This letter came out of the blue and we were naturally cautious of responding to it so sought advice from Citizens Advice who said it was likely statute time barred and to write back stating that and accept no liability.
We received a letter back stating last payment was 9/10/15 (through stepchange) so it is not time barred yet.
We rang the firm to discuss and they did an income & expenditure with my husband which showed a negative balance. We offered just over 10% to settle with a gift from family.
They have refused the offer and have said a settlement offer is now not an option.
There is now a £1 month arrangement due to start. My husband thinks we should cancel this and wait out till October but this has me so stressed I don’t know what to do for the best
Sara (Debt Camel) says
– what sort of debt was this originally?
– does he have other “old debts” from the DMP that haven’t been cleared?
– with a negative balance does he have “new” debts as well? Are these increasing? Are any of them “priority debts” such as rent/mortgage arrears, council tax or utilities?
– are your household finances affected by COVID-19, if so are they likely to improve soon?
Mrs Angie says
Hi Sara
My husband was guarantor on a loan for a business that went bankrupt. He has been left liable for the loan, but in the meantime has developed severe health conditions and no longer has the income he had. The bank is NatWest, who put us under the team that deals with vulnerable cases and who have been good so far. We have been submitting annual budgets and making monthly payments, which are now at £100. The original amount owed was about £11k. I think we must be down to around 9k to 9,500 now. My husband has severe mental health issues and has developed a fixation about what will happen to me when anything happens to him as we have discovered that after funeral expenses, the bank would take the remaining life insurance to settle the debt. The family have had a whip around and can come up with £6k to offer in full and final settlement to stop him worrying, but don’t want to pay it just to reduce the balance. Obviously we don’t want them to pay more than they have to – do you have any idea of what sort of figure we would have to offer? Secondly, if our first offer is not accepted, can we try again with a higher figure? Thank you for your help.
Sara (Debt Camel) says
So you are renting? Don’t own a property? The life insurance – is there a named person it should go to?