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. I looked at this problem in Is it too soon for have good settlement offers?
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 2023, 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. The debt will be marked as ‘partially settled’ on your credit file.
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 – perhaps your debt which is closed gets accidentally included in a lot of debts the creditor is selling to a debt collection agency – 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.
Mandi says
Hi,
I’ve paid my debt but the ccj is still shown on my record as unpaid. I have confirmation letter from the claimant to confirm i made the payment in full. Now.. I or the claimant is unsure to which court address we shall send “proof of payment or confirmation letter” . Can you please help?
Sara (Debt Camel) says
see https://debtcamel.co.uk/paid-ccj-satisfied/
Sam says
Hi Sarah,
I’m really hoping you can help me please.
I’ve recently in the last couple of months had a ccj come off my file, but still have 3 defaults showing.
1- credit card default date 10/08/2020 £499
2 – credit card default date 30/10/2020 £683
3 – credit card default date 18/09/2020 £833
I’ve been paying £5 a month to each for the last 6-8months and I got in trouble and they defaulted due to Covid and loosing job. I understand they will now stay on my file 6 years 😞
Me and my husband want to apply for a shared ownership mortgage in the next 3 months, he has a good credit rating where as I don’t.
I’ve been offered a partial settlement for all 3 which we would be in a position to do, so I’m wondering giving we want to apply for a mortgage very soon, am I best accepting the partial payment offer, leaving it at £5 a month or paying in full for all 3.
If paying in full, or partially are going to help our chances in getting a mortgage then Would I be best just continuing the £5 a month payment?
Any help and advice would be most welcomed.
Thank you
Sam
Sara (Debt Camel) says
I think you need to talk to a mortgage broker now. You need someone with up to the minute knoweldge of possible lenders, not generalities from me.
But for what it’s worth, it sounds likely that settled or not you would need to be getting a “bad credit” mortgage as the defaults are so recent. And also either not settled or only recently settled.
Andy says
Hi Sara,
I have been in a DMP for 12 years now it’s 75k of credit card debt . 35k of this is with Cabot Finance . I have spoken to them today re a FFS they have offered a 70% discount . So I would need to pay approximately 11k to clear the debt . I haven’t asked for the original CCA yet which I am pretty sure they can’t supply as all the debt is pre 2010 . My question is Shall I give them a counter offer saying unless you accept this I will need to require all the cca from you . ?
Andy
Sara (Debt Camel) says
Is all the debt loans, credit cards and catalogues? No overdrafts, mobile, utilities?
Andy says
Hi Sara ,
Sorry for the late response.
All I owe is to credit cards .
Sara (Debt Camel) says
ok then I suggest you ask for the CCAs now. why pay 30% when you dion’t have to?
Lucy says
Hi, I have a £500 catalogue debt from 8ish years ago which is now owned by Lowell. Looks like a CCJ has been issued in the last couple of years and I recently received a Warrant of Execution. Any further action has been suspended for another week. I know I had reduced settlement options in the past but was still in the ignoring stage. Are they likely to accept a Full and Final or am I better to just set up a payment plan? Thank you
Sara (Debt Camel) says
It is a huge pity you ignored this as you may have been able to challenge it and prevent it coming to court :(
At this point it is unlikely they will accept a reduced settlement but you can try if you have the money spare.
What is the rest of your finances like? Do you have other problem debts? Your credit rating is now wrecked for another 6 years….
Emily says
Hi I have a DMP which started in 2016 for a total outstanding now at £40873 and pay £170 per month through step change, which I had to stop during 2 of the lockdowns they are for credit card debt most with Link financial and one with PRA the finish time is 2041 I am just wondering if I could offer 20% final settlement?
Thank you
Sara (Debt Camel) says
Are all the debts marked as defaulted?
Can you afford c£8,000 or would you be borrowing this from family?
What is your current financial situation like, are all your debts in this DMP or do you have other ones or are you behind with bills?
Emily says
Yes all debts defaulted no wouldnt be borrowing and no other debts apart from a mortgage with my partner
£8000 is all my savings and have just arranged to start paying £170 a month again with step change after a 4 month break due to lockdown and not being able to work, but back at work now.
Sara (Debt Camel) says
One thing you could try before making settlement offers is asking for the CCA agreement for the debts. Read https://debtcamel.co.uk/settlements-old-debts-cca/
Emily says
Sounds quite scary to do this? I’ve just checked on experian and all but one of my defaulted debts are on there would this impact anything?
Sara (Debt Camel) says
Read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ and look at a lot of the comments below that.
It may seem scary but it does work in some cases. It’s up to you if you want to try it or just make a settlement offer.
Emily says
Hi Sara
I haven’t done anything yet and have just received letters from barclaycard my original lender with small refunds for each card, do you think I can contact them directly and ask for a cca agreement?
Sara (Debt Camel) says
you don’t ask Barclaycard for the CCA agreement – you don’t actually want the CCA agreement to be found! Instead you have to ask the current debt collector who may well not have a copy and may not be able to get Barclaycard to send them one.
Sandra says
Hello, I need some advice. Received a letter with an offer to partially settle the debt. Paid the money by the date shown via bank transfer, but now receiving letters to set up further payments even though the exact settlement amount was paid. From what I understood I had to accept the offer first then pay the money. Unfortunately offer letter has some info missing due to arriving wet, so the required steps weren’t clear, but based on my previous experience where I settled debt I didn’t think any problems would arise this time. I wanted to know can collector argue that this was not a settlement amount that they have asked for, but just an ordinary payment? It’s only technicality that I didn’t accept in words or pressed some ‘accept’ button somewhere. In my understanding if I paid an exact amount that they asked for to settle debt, it is clear I accepted the offer, is it not? Btw, I have never paid any money to them before, this was one-off payment, so it is pretty clear what it was for. Thanks
Sara (Debt Camel) says
I suggest you send them a complaint saying they made you an offer and you paid that amount by the date shown. Ask them to mark the debt as settled.
Sandra says
Thank you, that is a good idea. I wrote them a short email earlier, just to ask ‘what the heck’, but complaint would be better. Do you by any chance know what sort of law this issue false under? I found creditors rights after payment is made, but no debtors. Fca doesn’t specify either or I am looking at the wrong place.
Sara (Debt Camel) says
A creditor has to treat you fairly. That is one of the FCA’s principles.
Matt says
Hi Sara
I’ve been in DMP via Stepchange for 2.5 years.
I’m moving to a cheaper house and getting ~£22k in cash proceeds on completion. I’d like to use this to clear (hopefully) all the debt. In total ~£29k is outstanding (all unsecured):
Intrum loan (originally with AA) – £22k
Admiral loan – £5.3k
HSBC overdraft – £1.2k
Aqua card – £0.5k
Capital One card – £0.2k
It’s my understanding that ‘partial settlement’ isn’t a big deal for defaulted debt, as they’ll still drop off my credit report 6 years after the default date?
Only the larger Intrum loan is in default and I plan to pay the other, lower debts in full.
How would you suggest proceeding with the Intrum one please?
If I could agree 68% or ~£15k with them, I’d have £7.7k to clear the other debts in full, but I’m unsure whether to start with a slightly lower proposal so I can increase if needed?
Does it affect things that they purchased the debt from AA (original creditor)?
Finally, do I need to position it as a ‘now or never’ offer, the alternative being to continue paying Intrum £261pm they’re currently receiving via DMP, taking ~7 years to clear?
Sorry for all the questions and thanks very much!
Matt
Sara (Debt Camel) says
is the 22k after you have taken into account all the costs? – legal, estate agents, moving costs, any immediate purchases essential in new place?
Matt says
Hi Sara,
Thanks for the quick reply. Yes, that’s the cash amount remaining after all the costs of moving and leaving a small budget for immediate works to the new house.
Kind regards,
Matt
Tracy Hughes says
You have been to my phone calls today
Sara (Debt Camel) says
“Only the larger Intrum loan is in default and I plan to pay the other, lower debts in full.”
You should really offer all your creditors the same percentage, defaulted or not. The three smaller debts are not important, but there is no reason why you should settle the Admiral loan in full but only offer Intrum 68% to Intrum – that may not be perceived of as fair by Intrum.
“Does it affect things that they purchased the debt from AA (original creditor)?”
It helps – it means they are more likely to accept a good offer.
“do I need to position it as a ‘now or never’ offer”
Well it isn’t really is it? It is a good offer and you have a good explanation for it – having sold a house and downsized.
But the fact is that you have that money in the bank. If you do not pay it off your debts, then a creditor could potentially go to court for a CCJ and look for a third party debt order (see https://www.citizensadvice.org.uk/debt-and-money/action-your-creditor-can-take/creditor-takes-money-from-your-bank-account/). This is unusual but the intrum debt is large and by making the offer you are showing you have a large amount of cash so it couldn’t be completely ruled out.
I wouldn’t worry too much about this but it is a reason to be reasonable and not describe the offer as “now or never”.
Sam says
I paid cabot 25% full and final on 10k 7 year old credit card debt and to be fair they where fine to deal with and recieved comfirmation email while on phone and also recieved hard copy in post to confirm account closed with zero balance
I know some people will say why did you not CCA them .in my eyes i did run up this debt and still had the thought of a CCJ arrising so its good to put the debt to bed
Intrum on the other hand are a differnet matter
G.moo says
I have debts from my last default of 2011 now with cabot.one credit card and one loan amounting to £5000ish.
Why are they still showing on my credit file when it’s been longer than 6years? They threatened CCJ but managed to cancel it so I pay £5 a month to each.
My nan died in October and my mum is going to give me some money to pay my debts off out of money which was left. I’m hoping they’ll accept a partial settlement, before Christmas they wrote to me with a £750 settlement for I think £2500… Do you think they’d take lower if I apply? What’s the best price to offer to settle them?
I think one is £2400 and another £2700
Sara (Debt Camel) says
Why are they still showing on my credit file when it’s been longer than 6years?
because there is no default debt on the debt.
Go back to the original lender and ask them to add a default date, see https://debtcamel.co.uk/debt-default-date/. Then Cabot has to use the same default date the records will drop off your credit report if the default is over 6 years ago.
Do you think they’d take lower if I apply? What’s the best price to offer to settle them?
I can’t guess… but if £5 a month is all you can afford then Cabot may take less.
What sort of debts were these? If they were loans or credit cards, then an alternative is to ask Cabot (NOT the original lender) to produce the CCA agreement for the debt, because if they can’t then you can simply stop paying and they can’t take you to court. See https://debtcamel.co.uk/settlements-old-debts-cca/
Helen says
Hiwe have a charging order on the property deeds from 2009 which had no idea about . The debt is a Barclay card from the 90s !!! which my now ex husband defaulted on and this has been passed along and currently now held with Hoist. We have had no idea about this and have lived in the same property for 17 years . I need this charge releasing and they want 3k. How can I offer them a settlement : or tell them I’ll just leave the property deeds as is with my ex’s name on there and they will Not get anything. Please advise
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 as this is complicated and they may need to ask a lot of questions to get you good advice.
Sue Stephenson says
In 2011 I lost my business and was left with credit card debt totalling £29000
I wrote to all the providers concerned and was put on payment plans which I have continued to pay on time and with no missed payments
In time my debts were sold on to Wescot, PRA and Cabot
After 10 years I now owe approximately £15600
I think that I will be made redundant later in the year and with a small payout I would like to clear these debts
How much is an acceptable amount to offer and is this my best course of action
I have asked for the signed credit agreements from when I took the cards which was between 2005-2010 and have received two which show my signature but the others were T&C’s and no actual credit agreements directly relating to me
I am 61
Sara (Debt Camel) says
See https://debtcamel.co.uk/ask-cca-agreement-for-debt/ for more about asking for CCAs.
I am not clear who has sent you a true copy of the CCA agreement – you need to know that before deciding what to do. I suggest you talk to National Debtline about what you have been sent.
Do you have any other debts apart from these old cards? Are you buying or renting?
How easy will it be to find another job?
Sue says
requested the agreements from PRA and Cabot’ and I received one agreement that had my signature on, but the others were more like information sheets
I don’t have any other debts and I am paying a mortgage
Not sure how easy it will be to get another job
Sara (Debt Camel) says
With a mortgage and uncertain work prospects you should not be using any of your redundancy pay to settle old debts. You can get very little help with mortgage payments from the benefits system, and nothing for 9 months…. See https://debtcamel.co.uk/redundant-debts/ – I suggest you wait until you are back in work and see how much money you have left.
Do talk to National Debtline about your current situation.
G says
Hi
I have an aged old debt of year 2015 where i got a CCJ. I came to know about the CCJ in 2020 as i was not in the country and relocated in after 12 years. The ccj is also now removed from the credit file.
Due to covid i am paying 1 pound every month but now they have offered me 70% of my outstanding debt. Kindly let me know how to deal with them as my financial situation is still not good. Can i give a counter offer to settle the debt.
please suggest
Thanks
Sara (Debt Camel) says
Have they offered 70% off? Or asked you to pay 70%, so only 30% off?
Do you have other problem debts as well? Are you ok with all your essential bills? Are you back in work?
How much do you think you could counter offer?
G says
They have offered 70% off of 10k
I can offer them 10% to be paid in 5 months
Iam on UC and not back to work though applying actively.
no other problem debt
will borrow from relatives who are willing to help so i can clear this debt and settle it as this was a CCJ debt or order from court.
If they agree on my offer or else will keep paying pound 1.
kindly suggest
Sara (Debt Camel) says
So first of all to dismiss a point which is irrelevant – this debt and the CCJ should no longer be showing on your credit record – if they are, that is wrong and can be sorted. The debt will not reappear if you settle it in full, with a settlement offer, or just keeping paying.
You can’t afford what they have offered so you can ignore that as an option. On UC you can only afford £1 a month, so increasing your monthly payments is not an option.
I don’t know how likely the debt collector is to accept your offer. If you decide to make it, you should emphasise that you cannot pay more than £1 a month – if you have not already send them proof you are on UC then do so now – a screenshot will do – but a relative has offered you £200 a month for the next 5 months if that will clear the debt.
It is your choice about whether you want to borrow this money. If it was me personally, I would not borrow the money unless I felt sure the relative was well enough off for the payments not to be a problem for them and I would warn my relative that it may be a long time before I could repay it.
There is another option – you could apply for a Debt Relief Order which is a form of insolvency and it would wipe out this debt after a year, during which you don’t make any payments. If you don’t think it’s fair to borrow this money from a relative, you should talk to a debt adviser about the pros and cons of a DRO – read https://debtcamel.co.uk/debt-options/dro/ and phone National Debtline on 0808 808 4000 to discuss this.
G says
Thank you Sara so much for your advise.
G says
Dear Sara
I had proposed to settle the account with the debt company , as I had discussed with you earlier where one of my relative will arrange to pay the amount.
the following reply I have received …
We write in response to your recent request for a reduced settlement on this account. In order for us to consider your reduced offer, please provide us with the following information:
* The amount you are able to raise to settle the above account
* Where the funds are coming from
* A completed financial statement
* A breakdown of any other creditors you may have
On receipt of this information we will review your offer and respond to you promptly. Please note that if you pay your account by way of a reduced settlement, where your account is recorded on your credit file, this will be updated as partially settled (if your account has not yet defaulted) or partially satisfied (if your account has already defaulted), with a zero balance outstanding and not as settled or satisfied.
In the past paragraph they have mentioned if I do a “reduced settlement” it will show in my account as Zero Balance and not settled or satisfied. My question is this debt /CCJ is not on my file as it has passed 6 yrs, will that show again on my file and show Zero Balance and not settled or satisfied.
Kindly Guide
Thanks
Sara (Debt Camel) says
Neither the debt nor the CCJ will reappear on your credit record if they have already dropped off.
A says
Hi Sarah
I have 6 debts. They all defaulted in 2015 and drop off my credit file this month. I pay them through a DMP With StepChange. It will take until 2041 to pay them. 4 of the debts were sold on and 2 retained by the original creditor. I made CCA requests for the 4 that were sold on. 3 came back saying they couldn’t comply with my request and the debt is unenforceable.
I have been offered some money to clear my debts. My ‘plan’ was to offer 20% to the 2 debts that were retained by the original creditor, on the basis they are already 6 years old and it will be another 20 years for them to be cleared. I had hoped that all of the remaining 4 creditors would be unable to comply with the CCA request and I could then offer them 5% on the basis that the debt is unenforceable. I appreciate I could simply stop paying but I have read you articles about having to declare all debts when applying for a mortgage and I would like the peace of mind of knowing the accounts were closed.
Here’s the problem. 2 of the debts are for 2 Credit cards from the same bank. They were both sold on to the same company. I made CCA requests for each card and the company has replied saying they can’t comply with one, but sent me documentation purporting to comply in relation to the other card. Assuming they have fully complied, any advice as to how to negotiate a partial F&F in this situation, where one in enforceable and the other is not?
Sara (Debt Camel) says
My advice is not to pay the ones where a CCA cannot be produced. It complicates matters a lot and often the creditor just won’t accept a 5% offer.
If the loans are off your credit record, and the creditor has confirmed they unenforceable there is no need to tell a mortgage lender about them. And anyway a mortgage sounds a VERY long way away if your DMP will go on that long.
Have you told StepChange to stop paying the three that are unenforceable? This needs to be done several months before you try to settle them if you really want to try that.
You can write to the creditor with the one you want to settle and make it clear you are being offered money by a relative as a full and final settlement offer of THIS SPECIFIC DEBT.
A says
Thank you for your reply.
Can I ask how making low F&F offers complicates matters?
I haven’t told StepChange yet no. Do you know what view. stepChange take on stopping payments to unenforceable debts. I was a bit concerned they wouldn’t like it and thought it may be better to sort it out first (by way of a low offer) and then telling them to stop paying.
I presume from your question that a creditor is more likely to be receptive to a low F&F if I have not paid got a few months?
Sara (Debt Camel) says
Well here you are trying to make three offers at 5% and one at 20%? That’s a lot more hassle than just trying to settle one of them. What if one doesnt reply and one says they will take 10%?
You definitely have to stop paying someone for a few month before they are likely to accept a low settlement offer. Otherwise they can just say no and expect the monthly payments to continue to roll in.
You could try stopping payments and settling the one which did produce the CCA now. Then think again about the other later? No need to do this all at the same time.
A says
Thanks Sarah. I take your point!
My thought process was to make the differing offers at the same time so I could legitimately say to each of them that, as well as it being another 20 years under the DMP, that I also have a lot of other debt (in addition to theirs) so as to make my offer seems more appealing. Perhaps that was wishful thinking on my part.
I think I will stop the payments on the ones that couldn’t produce the CCA and offer on the ones that did.
I guess it’s slightly scary to stop making the payments with the letters and calls that may then follow.
Simon says
Hi, I have been doing a DMP for 2.5 years owing still 28k of loans, credit cards and small balances in the hundreds for over drafts and store cards. Sadly on the verge of breaking up and between us either selling or buying either of the other out. If family helped me to clear my DMP debt what are my chances of gaining a mortgage on my own left with bad credit? I earn around 30k a year and hoping can clear my debt for around 12k or 60% reduction.
Sara (Debt Camel) says
So your credit record has a lot of defaults or payments arrangements showing?
Have many of the debts been sold to debt collectors?
Lee says
Hi
I have an old debt of £8,000 which I had an ccj for and then after the 6 yrs were up they put an second charge on my property.
The company offered via a letter a lower amount £5,550 in feb 21, however I wasn’t in any position to pay at that time but recently I have tried to get this sorted they are playing hard ball after I verbally offered 3K then 4k, both was turned down flat there and then!
In fact they won’t entertain the feb offer of £5,550 they only what the full amount ….
I really want this sorted but can’t seem to get through to anyone please can you help advise me
Sara (Debt Camel) says
It was a mistake to offer 3k then 4K before offering the 5.5k.
It’s not likely a creditor would accept 3k when the debt is secured with a charging order, you have just made it look as though you are trying to get away with paying less than you can and do they are hoping to get more.
It’s also a mistake to try to do this over the phone.
Where did you get the money from? Have you explained this to them?
Read https://debtcamel.co.uk/full-final-settlement-rejected/.
David says
Hi Sara,
I have a number of debts with Credit Card companies and also debt management companies. If I was to offer an F&F to these creditors, is it possible to offer a lower percentage to the Debt Management companies as they will have bought the debt for far less than the full amount owing. I would have thought that they would be more likely to accept say 25% of the debt whereas the banks will probably only agree to 50%+. Or do I have to offer an equal percentage to all the creditors and give details of each settlement amount to each creditor? Can I treat each creditor individually and try to negotiate with each one without showing what I am offering the other creditors? After all, if I have a lump sum and agree 20% with one creditor, then there will be more available to offer another creditor.
Sara (Debt Camel) says
There isn’t a simple answer to this.
How old are these debts? Are you making any payments to them at the moment, if so are they token payments or larger amounts?
How much do you owe and what amount do you have available for offers?
Slk says
Hi
£4401 debit credit card if offer settlement off how do I work it out. 1 card in default how do work out how much to pay?
Sara (Debt Camel) says
It depends on the individual debt – how long ago you got into trouble with it, how much you have been paying since then, has it been sold to a debt collector?
Also where is the settlement money coming from?
If you are up to date with payments, it’s unlikely any offer will be accepted.
Mwelwa says
Hi Sara,
I made a CCA request to a DCA for debt that had fallen off my credit report. Its now 6months later and the DCA has produced the CCA. They have confirmed its now enforceable and want me to contact them. I had stopped paying after the 12+2 days but its meaningless now they have the CCA. What would be the best course of action. They had offered me 50% FFS in the past. the total debt is £4460.
Sara (Debt Camel) says
So you can make an offer to start making monthly payments again.
Do you have the money for a settlement offer? Heat other problem debts do you have, any priority debts?
Mwelwa says
Hi Sara, I do have other debts but this is the largest. I showed the letter I received to and expert and they said the document does not meet the CCA criteria. Apparently its an application/declaration and only meant to scare me (I’m unsure though). I noticed it does looks like the DCA has tried to reconstruct the CCA by mixing pages with the application/declaration. Would I be entitled to receive a last notice or claim before they decide take legal action, In the purported “CCA” letter they said they don’t want to go to court.
Sara (Debt Camel) says
Which expert did you talk to?
Mwelwa says
The expert is someone who I believe used to work for a high-street Bank or a DCA.
Sara (Debt Camel) says
Well if you trust them ask them what you should do next. Otherwise phone National Debtline on 0808 808 4000.
Bill says
Hi,
I have a couple of questions regarding partial settlements, hopefully you can advise.
I’ve recently been in touch with Lantern (who are terrible) and managed to secure partial settlements for two accounts.
The first was originally with wage day advance (current balance £578) I have agreed to pay back £400 over 3 months.
The second was originally with Lending stream (current balance £733) I have agreed to pay back £500 over 3 months. Both are due to begin 17th September.
The issue is I haven’t received email confirmation for the second account in regards to payment plan etc
When I contacted Lantern the person I spoke to said the email for the second account was sent out on the 27th August but cancelled. I told them I need written confirmation, they said they will try and get it resent.
I find this very strange and am not sure I should begin payments if I haven’t had the second account confirmed? When I originally negotiated these settlements over the phone a brief email was sent with the amounts discussed £400 & 500 against each account number.
The other issue is Lantern said they are the owners of another debt I have agreed a settlement figure with ARC for (originally quickquid) due to begin paying on September 17 current balance (£406) agreed to pay back £250 over 2 months.
Btw I asked for CCA’s which they provided.
Sara (Debt Camel) says
I too would prefer to have the agreement in writing before I started paying it.
So ARC haven’t told you the debt has been sold to Lantern? You could ask them.
Bill says
Hi Sara,
ARC did confirm Lantern own the debt, they are just collecting on their behalf
Sara (Debt Camel) says
ok so tell Lantern about the settlement agreed with ARC.
Nick PM says
I have debts totalling around £19K, £17K of which is currently within a DMP managed by Stepchange (since 2014) It has about 7 more years to run, however I am now in a position to make f&f settlement offer. None of the debts with Stepchange are on my credit record.
I have requested the CCA from several of the companies concerned & am waiting for replies.
I have one other debt, with Vanquis, which isn’t with Stepchange and is shown on my credit records. It hasn’t been sold on. My question is, is it worth trying to make a f&f offer to them too, or will they expect it to be paid in full? It’s about £1900. Would it be better, as it’s still on my credit record, to pay in full?
Sara (Debt Camel) says
Is the Vanquis debt shown as being in a payment arrangement? How much have you been paying a month to it?
Nick PM says
Yes, it’s not included in the Stepchange arrangement but I do have an arrangement direct with Vanquis & am paying £20 a month at the moment.
Sara (Debt Camel) says
How long have you been paying them that?
Nick PM says
Since 2017 – it was originally included in a DMP with Pay Plan but I cancelled the Pay Plan account and have been paying Vanquis direct since 2019.
Carole says
Hi Sarah
I want to offer my creditors 70% as a full and final settlemen.t I have sold my house and with everything paid I have 10,000 left which would be 70% of my debts. I have been on a DMP with stepchange for many years and have paid 15.000 off . Do you suggest I contact Step Change and ask them to make this offer on my behalf or should I contact each of the debtors individually? I would have another 5 years to pay the full amount off but at 60 and with a job in the voluntary sector. this may be my last chance to be debt free.
Thanks
Nick says
Carole – I was with Stepchange as well but decided to make my own settlement offers (from an inheritance). I have requested the CCAs on the ones that have been bought , and made offers on a couple of others of 50% (the ones with the original lenders). I have already had one offer accepted. So my advice is to do it yourself using the National Debtline template, and make a lower offer than the maximum you can pay, and don’t make offers if the CCAs can’t be supplied.
Maria W says
Hi Nick. I’m very interested in your experience with FFS as I am in a similar situation to you. I havent asked for CCA yet (see my post further down) I just wanted to ask, if the debt isn’t enforceable, are you still paying via stepchange? If I continue on my dmp at the amount I’m paying, debt won’t be fully paid until 2029.
Sara (Debt Camel) says
if they can’t produce the CCA, tell StepChange to remove the debt from your DMP.
Geri says
Hi Sarah,
One of my creditors has agreed to settle a £12k debt at 27%. It’s the original creditor, a big global bank. I asked them to confirm in writing before I pay so they sent me an email which says
“upon timely payment in full of the agreed settlement amount, no further attempts will be made to collect the remaining balance and your credit file will be marked as partially settled.”
Is this enough to ensure they won’t chase me for the debt afterwards or sell it on to anyone else who can?
Thanks!
Sara (Debt Camel) says
That sounds fine.
Geri says
Thank you! And for all your help getting me here. This website is invaluable and you’re an angel!
Geri says
Sorry Sara, me again! I’ve reread the email they sent confirming the offer and noticed the only mention a “full settlement”, not “full and final”. Is this a problem? Also, I’m actually dealing with a DCA not the original creditor. They haven’t been upfront about that, almost as if they’re trying to hide it. Their email seems to be sent from one of the creditors official email addresses but there is a typo in my name. And the punctuation and grammar is sometimes off.
Here’s the full text. Would you feel comfortable paying?
“Per our recent communication, you’ve agreed to pay the Full Settlement Amount of XXX as settlement of the Balance owed. Please note that other than communication regarding your agreed upon payment(s), no further attempts will be made to collect the remaining balance while you are making payments in accordance with the terms listed above Upon timely payment in full of the agreed settlement amount, no further attempts will be made to collect the remaining balance and your credit file will be marked as partially settled.”
Thanks
Sara (Debt Camel) says
It looks fine to me but if you aren’t comfortable go back and ask them to confirm that the debt remaining will not be sold to any third party.
Geri says
Thank you, that’s put my mind at ease. I’ll go back to them too.
Ginni says
Hi
I made an offer to Capquest for a F&F settlement of £1250 and they have emailed me back to say they have accepted my offer. The letter goes on to say:
“As the amount being paid to settle the their account is less than the full outstanding balance, their credit file will show the balance as satisfied with a special flag of partial settlement”
and
“Once the arrangement has finished a letter will be issued to confirm your account has been closed.”
I am wondering if I have to get them to specifically say that the balance will not be sold on to a 3rd party, in writing. Intrum said in their offer letter that I will not be pursued by themselves or any third party for any remainder of the balance.
I have called Capquest this morning and they said that once I’ve made the payment of the offer amount, that the account will be closed and they wont sell it on.
I just want to be absolutely clear that once these payments are made that I wont ever have to worry about these debts again.
Any help would be much appreciated.
Sara (Debt Camel) says
That should be fine. I would keep a copy of the email though.
Ginni says
Thanks Sara
Victoria says
Hi. I recently had a CCJ removed from my credit file as 6 years have passed since it was issued. I still have a balance with the creditor of over 10k which is paid at £40 per month. Should I continue to pay this, or would it be worth asking for a F&F settlement? Thank you.
Sara (Debt Camel) says
Do you have the money for a settlement? Do you have other problem debts or is this the only one?
Victoria says
I can obtain money to offer a settlement but I’ve no idea what I should be offering? This is my only problem debt.
Sara (Debt Camel) says
well you are paying about £500 a year. So they won’t accept a super low offer.
are you buying or renting?
Is a relative offering to help you with this? Will they need to be paid back?
You should definitely not borrow and pay interst to settle this – you then get another debt which if you have trouble repaying goes back on your credit record.
Jill Palmer says
Hi,
I have a credit card debt dating back to 2009, it has been sold to PRA. I stopped paying them in July, as I was off work after a serious accident and have since confirmed that the debt is unenforceable – they have put this in writing to me. Then today they have rung me and asked me to confirm how I intended to settle the remaining balance (£2990). I told them I was at work so it wasn’t an appropriate time. If they call again what should I do?
Sara (Debt Camel) says
This is unenforceable as they cannot produce the CCA agrement?
Joanne says
Myself and my husband have been in a DMP for 12 years we have 19,500 left on it. A relative is giving us a gift of £10000. My question is do I contact all the creditors and ask for F&F settlement figures they would accept or should I have sent CCA’s as a lot of the debts are very old?
Not sure best thing to do to go about things
Sara (Debt Camel) says
Have all the debts been sold to debt collectors?
What sort of debts were they – credit cards, loans, overdrafts, mobile bills or what?
Joanne says
Yes they are all with debt collectors, they are all credit cards, one Sainsburys loan which is the biggest at 8,100 it’s now with Westcot and 3 catalogue debts.
Sara (Debt Camel) says
There is a difference between a debt collector collecting for the original lender and a debt collector who has bought the debt.
Westcot I suspect is collecting for Sainsburys? In that case they are mucyh more likely to be able to produce the CCA agreement. And they are less likely to accept a low F&F offer.
How much are you paying a month to the DMP? Is this easily affordable or a bit of a struggle?
Ahmed says
Hi,
I have typed out my settlement letter, will it better to send by email or on paper. I have two creditors HMRC and Lowell. £7095.14 for HMRC and £1225.0 for Lowell.
Many Thanks
Sara (Debt Camel) says
Are you going to offer a lower settlement? What sort of debt do you owe to HMRC?
Sg says
Hi
I have 3 years left on my IVA
Due to circumstances changes ( going self employed with view to buying a house in 3 years or so, I am
Considering offering £8000 settlement against the £8500 owed with funds coming from my pension which I can now access as over 55, with the monthly payments I would have made to the IVA then going into either the pension or ISA
Are creditors usually favourable to settle early ?
Sara (Debt Camel) says
What does this gain you? Why not just complete the IVA and then you can take the money out of your pension if you want?
T May says
Hello!
In 2014 I lost my small business and found myself in £25k debt between 5 creditors. I have since paid off 4 creditors in full and I have now got £6.5k outstanding with the last creditor (which defaulted in 2014, so the default has dropped off my credit file and my credit score is now high – yay!). This particular debt initially was 11.5k and I’ve been paying it off dutifully with various amounts over the years from £100 per month to now £25 per month. The debt was initially with Halifax & was sold onto Moorecroft, then Westcot and since 2019, was sold onto Link Financial.
I have contacted Link asking if they will accept £2.5k as F&F (gift from my mum as she cashed in some pension money) – I sent them recorded letters to two addresses, emailed them and contacted them via their online portal which has a ‘settlement offer’ section – but have heard nothing back and now I am wondering what to do? I would really like this £25 per month gone from my bank statements so I have a clean file for when I plan on buying a property next year, but don’t want to just stop paying to get their attention, and don’t want the debt to re-appear on my credit file after working so hard for so long to get it all in order :(
How long should I wait for a reply from them about this? Is it worth me going down the CCA route, and if they can’t provide it and I stop paying, will it return to my credit file as a new debt?
Sara (Debt Camel) says
Is it worth me going down the CCA route, and if they can’t provide it and I stop paying, will it return to my credit file as a new debt?
I think it probably is.
The debt will not reappear if you stop paying bev=cause the debt is unenforceable.
David says
Lowell have combined 2 debts and chasing them as one. I asked for CCA’s and they’ve supplied one. Now received a ’30 days to pay before court action’ letter. How should I respond? As they haven’t supplied other CCA would this combined CCJ application be valid in court? Also, I have been considering a f&f offer. Should I do this now or let them take me to court?
Sara (Debt Camel) says
Have you asked them where the other CCA is?
Emma says
I have debt and a lot of it falls off my credit file in less than 2 years am I better to pay it off (it will then remain on my file for a further 6 years?) Or let it go and fall off my file in the next 2 years?
Sara (Debt Camel) says
So these debts all have defaults marked on your credit records? And you aren’t making any payments to them but you aren’t bing hassled?
If you settle the debt, in full or partially, the debts will still drop off 6 years after the default date – paying them doesn’t change that.
If you ignore them – read https://debtcamel.co.uk/no-calls-or-letters-about-debt/
Emma says
Yes they all have defaults that are pretty old and I’m not being hassled for them. I have a CCJ that came off today after 6 years and one falls off in April next year. I then have 2 more. What I didn’t want to happen was settle the debt and have them stay on my file for an additional 6 years. I want to do F& F for those that won’t fall off in the next 12 months. So even if I F& F they will still fall off at tge 6 year from default date.
Sara (Debt Camel) says
What I didn’t want to happen was settle the debt and have them stay on my file for an additional 6 years
this won’t happen.
jimbob says
If you have an inheritance of 7k and debts of 6k can you still offer a F and F for less than the original debt
Sara (Debt Camel) says
So the DRO has failed?
And you have other expenses which are urgent?
How much will that leave left?
jimbob says
Not failed yet. Just expecting that outcome based on the 2k limit. Just been informed that when i contact the DRO unit i could try to get them not to revoke. By way of special circumstances. My daughter is life time disabled and it is up to me to figure out possible examples of special circumstances to relay to DRO unit. Then just see if they may look favourably on them and not revoke the order
Sara (Debt Camel) says
and have you received the inheritance?
jimbob says
Letters of administration have just gone to the local council. They have been appointee for the deceased. Said they will do a final audit and release the funds
Sara (Debt Camel) says
ok so wait until you know how much you have, then look at what to do. And what your essential expenses are at that point.
jimbob says
Thanks for your help
Charlotte Crombie says
Hi Sara,
I have been in a DMP with Stepchange since the end of 2013, which had 4 debts in it (a loan, credit card and overdraft with Natwest) plus a credit card with Barclaycard. After working overtime and being sensible, I’ve been able to pay off 3 of the debts, just leaving the remainder of the loan with Natwest, which is now with Westcot, totalling £3.5k. It is my only problem debt, and all debts have now fallen off my credit file (bar one but after a recent complaint that was upheld, this is being rectified).
My question is, given how long I’ve been in the DMP for, is it worth offering 20% F&F to Westcot? I have the savings (just!) to be able to do this, but I’m unsure of the likelihood of this being accepted. Thanks in advance!
Sara (Debt Camel) says
how much are you paying a month to this? Are you still working overtime?
Maria W says
Hi Sara. Thanks for the great advice. I wanted to ask your opinion please and would be very grateful for your help. I have been in a DMP since March 2017. I have 6 debts in total. 3 debts that have been purchased by PRA – 2 are credit card, 1 is an overdraft. The other 3 are credit cards all managed by Link. Debts total £14k. The defaults will drop off between March and Nov 2023. My boyfriend has told me that he is willing to gift me £6k to help clear these debts via FFS. I’m wondering if it would be best to continue with my DMP, wait for the debts to fall off my credit file then make the FFS offer? I’m assuming it’s only beneficial to ask PRA for CCA on the 2 credit card debts they own? Once the defaults have dropped off, I want to be in a position to move in with my boyfriend and start saving a deposit and then apply for a mortgage without these debts hanging over us
Sara (Debt Camel) says
There is no particular reason to wait until the debts drop off before making an offer to repay them. The creditor won’t reduce what they will accept at that point. If you settle the debts they will still drop off 6 years after the default date.
Yes there is no point in asking for the CCA agreement for an overdraft.
If you are going to make offers, you want to do this several months before making any offers so the situation is clear when you do make offers.
Maria W says
Thanks Sara. Regarding the debts managed by Link, they don’t own the debts. Should I write to the original creditor who still own the debt or direct my request to Link?
Sara (Debt Camel) says
who does own the debts?
Maria W says
Hi Sara. Two debts managed by Link owned by LC Asset (they are credit card debts sold to LC Asset) and 1 debt managed by Link owned by Natwest Credit Cards
Sara (Debt Camel) says
then the request for the CCA goes to LC Asset and Natest Credit Card.
Maria W says
Thanks Sara. I’ll get letters sent. Really appreciate your opinion and the information you provide on your site. Its really helpful
Lily says
I have a debt for a Halifax credit card, defaulted in Sept 2018, no payments ever made. Sold to PRA group, I sent a CCA request and has come back enforceable. Is it worth sending a F&F offer to PRA-what %? (My dad is offering me money for this as I have health problems and he like the stress lifted.) Thank you.
Sara (Debt Camel) says
Are you in work? On benefits? Do you have much other problem debt? (These all affect what % might be accepted)
Lily says
I am in work, though only part time. No benefits, I was living with my husband but we are currently separating (finances not sorted as yet). Only one other debt, which is currently unenforceable.
Sara (Debt Camel) says
In that case it may be better to just start paying them a token £1 a month until your finances are settled and you can point out you can’t afford to pay more.
Otherwise its hard to guess what they might accept.
S says
Hello
Full and final offer. How is it worked out I woe £4401. If I offer 40% would they accept it. It’s is a credit card.
Sara (Debt Camel) says
That depends on your situation, so:
is this a card you have missed payments to?
has it been sold to a debt collector?
are you currently making any payments to it?
Dee says
Hi, I have worked really hard to settle several debts which were all sold to Lowell, and have managed to do so except for 1 CCJ. It is due to come off my credit file in May 2022, I have managed to pay £2000 with £6000 remaining. I am unable to work due to ill health, this is unlikely to change however, I have not missed a payment in 5+ years. With this is mind, do you think they are likely to accept an offer to settle in full once it has dropped off my file, I am considering trying to borrow some money from a relative, I was thinking of making an offer in the region of £1000, is this a good idea?
Sara (Debt Camel) says
how large are the repayments and can you afford them at the moment?
Dee says
I did reply but it’s disappeared, so here goes :)
Current only £13 was reduced from £33 last year to settle the other debts. I pay 1 other with Lowell @ £50pm but this ends in May. So in total I’m paying £63, with CCJ @ £6000 being the only remaining debt in May. I can afford to remain @£63 from May but this will take at least 8 years to clear I really want rid of it if I can
Sara (Debt Camel) says
I suggest that with energy prices going up a lot in April (see https://www.theguardian.com/money/2022/feb/03/how-the-uk-energy-price-cap-is-calculated-and-affects-your-bill for the news today) you probably won’t be able to afford £63.
This matters because if you offer £1000, that is only 15 months payments at £63 a month
But if you need to cut the payments to say £30 a month, £1000 looks like a lot more money you would be offering. So I suggest waiting until May and then saying you need to reduce the payments. And then a couple of month later offering a settlement.
Dee says
Thank you Sara, yes what you suggest really makes sense.
With energy prices increasing, everyday essentials like food, food manufacturing/production etc will likely also increase, so perhaps a lower settlement a few months after I reduce payments, may be in their best interests as I’m sure many, many families are going to struggle. Again thanks for your help
Mike says
Hi, I had 16k (mainly credit card and overdrafts) worth of debt in 2016 and started a dmp, which the companies defaulted in 2017. I’ve managed to keep up my monthly payments of £100 and have reduced this down to 9k. I’ve sold my house and bought with my partner. We have 4k left which we were going to use on this house. How likely would a F&F be accepted for 4k (45%) ?
Thanks
Sara (Debt Camel) says
Are the £100 a month payments affordable? Taking into account energy bills, NI rises in April etc?
T William says
Hi,
I’ve had a DMP in place for nearly 7 years now with a total of 6 defaulted creditors. 3 creditors have dropped off my credit file totalling £5K of debt and 3 remain for a couple of years totalling £2K. I’m looking to get a lump sum together from family to pay the DMP off but I won’t get the full £7K and it’s likely to come in 2 lump sums a few months apart. My plan was to pay off in full the 3 that remain on my credit file and offer full & final settlements to the 3 that have dropped off my file. I’m conscious to not have ‘partial settlement’ markers on my credit file.
I’m nervous about CCJ’s too but I hope that as I’ve paid via the DMP for so long that this is unlikely to happen.
I’m unsure if there’ll be any issues with some creditors receiving a full payment and others receiving partial settlements? The DMP company said that if I want to pay a creditor off in full as and when I can then I am entitled to do so and their share of the DMP will go elsewhere in the meantime. I just don’t want to stir the nest and for once, get things right! I’m unsure if I should a) pay off the 3 on my file at the same time as approaching the other 3 to settle? or b) pay off the 3 creditors on my file first and then when the second lump sum comes in approach these for a settlement at a later date?. The DMP company have said that their settlement team will only speak and advise when I have the cash at hand.
Sara (Debt Camel) says
The three creditors that remain on your record – are they the original creditors or have these loans been sold to debt collectors?
A partial settlement on your credit record is not a big problem. These debts already have defaults I assume as you are expecting them to drop off. See https://debtcamel.co.uk/ff-credit-record/
I don’t see why you would not make the same offer to all the creditors.
I am not sure at this point why you are concerned about CCJs? They are unusual in a DMP and you making a settlelent offer doesn’t seem like a reason why a creditor would think of one. You can explain you do not have this money and that a family member will onlt give it to you if the settlement offer is agreed.
You are entitled to make any settlement with your creditors that you can get agreed – it does not have to be repaying in full. Just tell your DMP firm when you have done this. DMP firms are often not a lot of help with settlement offers, it can be easier to just do it yourself.
T William says
Hi Sara,
Thank you for your response, much appreciated.
The 3 creditors left on my file are debt collection agencies. Of the 3 no longer on my file 2 are debt collectors and one is a high street bank, this one is the largest sum I owe on the DMP (4k).
I will be expecting further defaults to drop off in September 2022 Jan 2023 and Oct 2023.
The issue is me and my partner will be looking at mortgages hopefully autumn this year. We’ve spoken to brokers who are confident a mortgage will be doable at a standard rate if the DMP is paid off with a 15% deposit as my defaults are old. We could look at a mortgage now and the DMP paid off via the mortgage but this is a high interest rate and a 20% deposit through adverse lenders.
So, I don’t know how a partial settlement will look to a mortgage lender as opposed to paying the 3 on my file off fully.
Thanks again for your comments.
Sara (Debt Camel) says
There is no simple answer, see https://debtcamel.co.uk/dmp-partial-settlement/ and talk to the mortgage broker about this.
Also read https://debtcamel.co.uk/debt-default-date/ and see if you have a case to ask the original lenders to backdate the default sate so that the records drop off sooner.
Laura says
Hi Sara
We have 50k personal credit card debt from a failed small business. All defaulted ~5 years ago so coming off the credit file in the next year or so. We have been making small payments for 5 years (we arranged this ourselves so no DMP). We want to try to make f&f settlement offers, but can only afford 20-25%. I don’t want to poke the bear as such if they were to reject this but then start chasing us for more? Are they likely to change tactics when coming up to the 6 year mark?
Also, If they sold the debt on to a new company can they log a new debt on my credit file? Or am I safe if I keep making minimum payments?
Thanks in advance – this blog is so helpful.
Sara (Debt Camel) says
how many of the original creditors have sold the debts to debt collectors?
could you afford to pay more? does this take into account the coming increases in energy bills, council tax, national insurance, mobile & broadband, petrol etc?
Paul says
Hi,
I have approx £7,200 debt with 5 creditors. One of those is Everyday Lending which I owe £2400. My partner has offered £3000 to offer between these companies as s F&F. Everyday lending are notorious for being difficult with debtors, I was wondering if they would accept an F&F payment. I’m with StepChange and this debt wouldn’t be paid until 2029 at the rate I’m paying.
Cheers,
PJ
Sara (Debt Camel) says
I can’t guess.
But your Everyday Loan – was this affordable when you took it out? A loan is only affordable if you xan pay it and still be able to pay your other debts, bills and living expenses. If paying this loan was one of the reasons you ended up in a DMP you may have a good affordability complaint against EL. Read https://debtcamel.co.uk/refunds-large-high-cost-loans/ whichy looks at these complaints.
Paul says
Yes, I was paying the contractual payments, but I had to come out of work due to health problems and my debts spiralled after that.
The share I worked out using the StepChange F&F calculator said it’d be £999.67 to EL; this seems a bit low but I guess trying the offer is only way to find out.
Thanks for your help 😃
Sara (Debt Camel) says
are you buying or renting?
You are much more likely to get a low offer accepted if you carry on with a low DMP for another year or two…
Paul says
I am a renter (social housing). My current DMP 100 a month and it’s going to take years to pay off, I just want it gone so looking at the settlement offers.
Sara (Debt Camel) says
yes I understand that. You can make these offers.
But will you be able to afford 3100 after the April energy, national insurance, council tax, mobile, broadband increases?
If paying your share of the bills means you could afford less than £75 a month, then you may qualify for a DRO – your debts would be written off and your partner would keep their £3000.
Vik says
I have 138k in credit card, overdrafts and personal loan debt which recently defaulted.
I am just making token payments as I lost my job in Oct.
How long can I make token payments and when I get a job can I just continue with token payments?
Sara (Debt Camel) says
Do you own any assets eg a house with equity?
Were all of those consumer credit or any business debts in there?
What did you used to earn, how long will it take you to find another job and what do you hope to earn?
jimbob says
Has anybody heard of The Insolvency exchange and a link. I have opened f and f negotiations which have generally gone very smoothly. Except for Capital One. Trying to get DRO revocation on their systems but told has to be through Insolvency Exchange. Official gov IS say never heard of it. Any ideas
Sara (Debt Camel) says
I wonder if Capital One mean the Insolvency Service?
jimbob says
Apparently not. Supposedly an intermediary between Insolvency Service and them (maybe called TIX). Seems strange the DRO when granted went through their processes but not revocation. Insolvency Service said ask Cap One to request it from them so as to get the correct dept but they are adamant they will not. So they are sticking to official notification from Insolvency Exchange or no moving forward. A great shame really as all the questions i previously threw at you we have now resolved 4 of the 5 creditors with F and F settlements that have been processed accepted and paid.
Just a note about current standing. Capital One records are currently showing account is subject to an active Debt Relief Order
Sara (Debt Camel) says
Oh TIX – right, they are best know as a “creditor representative” that votes on behalf of creditors in IVAs, obviously Capital One use them for everything to do with insolvency.
Just sit back and wait, this will all probably get sorted in a month or two.
jimbob says
Thanks about the last bit of sit back and wait as we have been back and to with it many times over last few days. And my head hurts
Bob says
Hi,
Thanks for what you are doing to help.
Please, if a debt has dropped off my credit report, would future employers have the ability to find out i made a partial settlement?
I recently found out that the question is asked as part of the onboarding process at some companies.
Thanks
Sara (Debt Camel) says
No.
That is a very unusual question to be asked – I have never heard of it happening. What sort of companies are you applying to?
Bob says
Hi Sara,
Thanks for your reply.
I am applying to consulting firms. One expressly asked the question. I was in the planning stage to engage all the debtors that have dropped of my CR regarding FF settlement. As soon as I was asked the question, I held off and thought to ask you.
Sara (Debt Camel) says
The only people that can tell you have made a settlement are you, the creditor involved (the debt purchaser rather then the original creditor if it has been sold) and anyone you supply copies of your bank statements to. where the settlement shows.
I can’t see much point in holding off settlements – any employer that is unhappy with partial settlements and could see them probably will not like you having old defaulted debts that are still being repaid and would be able to see those too…
John says
I have 3 old debts from around 2010 (dropped off my credit file in 2016). I pay £10 a month to each of these and have done for the last 7 or 8 years. The debts are approx £4000, £4500 and £13000 (total £21,500). The smaller ones don’t worry me too much, but the one for £13k does, it was an old AA loan from 2008 which Link Financial have had for a number of years now. A close family member has kindly offered to give me £4k to pay this off as a F&F offer, and I have small savings of £3k to approach the other 2 lenders to pay off. In each case that’s only about 33% of the total amount due. Do you think they are likely to accept the offer? I could do with these being off my bank statement ahead of trying to move house later this year. Is 33% an acceptable amount?
Sara (Debt Camel) says
I would hope they would accept that much. Make sure the know the money is being offered by a cloase relative only if your offer is accepted.
BUT these are old debts… read https://debtcamel.co.uk/settlements-old-debts-cca/ as this may work for some of them!
G says
Hi Sara
I have a old debt aged more than 6 years which had a CCJ.
I am paying 1 pound every month. The CCJ do not appear on my credit file now. What happens if I do not pay any further due to financial situation,
Can the Debt collector agency take me to court and enforce another fresh CCJ which will appear on my credit file or get the bailiff to recover the debt. Can the debt collector agency enforce CCJ or court order twice on the same debt.
Thanks
Sara (Debt Camel) says
Is this your only CCJ? the only debt you are paying 31 a month to?
What is your current financial situation if you can’t afford £1 a month – do you have priority debts and bills you are struggling to pay?
G says
HI
Yes this is the only CCJ and only debt I am paying. I am on UC and paying my bills.
I can afford 1 pound as per the arrangement. My question is do the debt collector agency take me to court or enforce another CCJ for the same account again if the debt is not paid.
Thanks
G says
Hi
Yes this is the only CCJ and only debt I am paying. I am on UC and paying my bills.
I can afford 1 pound as per the arrangement. My question is do the debt collector agency take me to court or enforce another CCJ for the same account again if the debt is not paid. Kindly guide.
Thanks
Sara (Debt Camel) says
If you stop paying the debt collector can’t a second CCJ but the current one is still enforceable eg with bailiffs.
jimbob says
Supposedly had an accepted f and f settlement with Vanquis leaving 2k outstanding. Shock horror Moorcroft letter today chasing this balance on behalf of Vanquis. Explained should not be active. All i got was lady at Moorcroft saying we will text you phone you email you until you set up a payment plan. And basically prove it settled if you do not want constant contact. What a lovely person
Sara (Debt Camel) says
when was the settlement accepted? was this in writing?
jimbob says
Vanquis was first to settle in early March. Stepchange have done the settlements so would assume they have followed golden rule of in writing. Appears it may be Vanquis not closing account down as settled. Its just unsettling and stressful that Moorcroft are saying they are not aware of this. And until they hear otherwise they will relentlessly pursue debt and payments to it
Sara (Debt Camel) says
ask StepChange to confirm that Vanquis agreed to settle.
jimbob says
Just done. Apparently Vanquis have passed debt on in error and will recall it. Just not very nice dealing with the treatment by Moorcroft in the time while Vanquis correct their mistake. Thanks for your help
jimbob says
Had 5 debts when going down F and F option. Sent lots of medical evidence with offers. Outcome of as now is 4 creditors have accepted actioned and closed accounts down. All except Capital One. They have rejected offer. And only comment made is continue with Token Payment Plan 1 pound per month. Any ideas what happens now or may happen in future
Sara (Debt Camel) says
I suggest you carry on with £1 a month and try again in a year or two.
jimbob says
Thanks for your reply. With cost of living explosion and recent extenuating circumstances when funds put aside are returned they will be swallowed up. And very unlikely to be available again
Sara (Debt Camel) says
That’s fine. More fool Capital One for not accepting the offer. Just start paying £1 a month and use the cash for paying your priorities such as rent, heating and food etc. If there is nothing to make a settlement offer with in a year, just carry on paying the £1s.
jimbob says
Thanks for all your help. And your reply has given me great clarity to relieve any nagging doubts we had about consequences of no longer having funds. Our intermediary had many back and too with them many times recently. He was left totally surprised and shocked with all the evidence given that they came to the conclusion they did
Kay says
Hello Sara,
I have a Vanquis credit card which defaulted with a balance of £620, in March 2019 and was sold to Lowell a week or so later.
Lowell have been texting me and sending me letters, but I have not once responded and I have not made any payments to them.
Now, Lowell have made a 50% settlement offer out of the blue.
I am unemployed and on benefits so cannot really afford to pay anything other than token payments.
However, as 38% of the outstanding balance is made up of late fees, overlimit fees and interest, I was wondering if I could get the debt reduced even further.
Then I could make a further reduced settlement offer and ask friends and family for the money to pay this or I may even have a job by then to do this myself.
Could you please advise if I write to Vanquis or Lowell about getting the above charges refunded?
Many thanks
Kay
Sara (Debt Camel) says
Is this your only problem debt at the moment?
Tell me something about this Vanquis account – how long did you hgave it for, did Vanquis increase your credit limit, what went wrong at the end?
Kay says
Thanks for replying.
This is the only default on my credit files.
I am in 4 months’ arrears with an Aqua credit card but have arranged a very low monthly payment plan for this in order to prevent this defaulting.
I had the Vanquis account for 8 months.
The credit limit was not increased at any point.
I maxed out the card as soon as I got it and managed to make minmum payments for a few months, but was mostly late with these.
I was self-employed but business was bad so I didn’t have the income I thought I was going to.
I was also going through some personal issues so neglected payment of my bills around that time.
I arranged a payment plan of £100 monthly with Vanquis before the default, but couldn’t keep to it because I couldn’t afford it but felt pressured to accept it.
I then made another one for £50 monthly but forgot to set it up so missed it and then Vanquis defaulted it.
Eric George McKinley says
Hi, been reading this website for a while and decided to try for settlement offers on my 4 debts. My daughter provided the money. Three accounts have accepted pro-rat offers of the money gifted me. Link Financial have refused – despite them accepting the offer on the other account they own!
I have been paying £5pm for over 8 years. I am 68 so my financial situation will not improve. My wife still works, but is looking to retire after being diagnosed with bowel cancer last year (thankfully, it looks like it’s all been removed, but she worried about the debts we had and the one still remaining). Link are fully aware of my financial circumstances and my wife’s health situation (they took these into account, apparently…)
Should I go down the credit agreement route or DRO.? Ideally, I’d have preferred they had accepted the offer, as it seems fairer, but primarily to remove the worry my wife still has. She’d still prefer they accepted the offer. I’m thinking asking for a copy of the agreement and if they cannot provide it, then make a lower f&f as a gesture of good will (and to avoid the situation where an agreement may turn up some time later. If they still, refuse, maybe then a DRO.
Any ideas of how to handle this situation?
Sara (Debt Camel) says
the remaining debt – was sort of debt was it?
Eric George McKinley says
Thanks for replying.
Lloyds Bank personal loan, defaulted about 10 years ago after a heart battack forced me to give up work.
Terry says
Hi Sara,
In this article on Full & Final Settlements you give examples of where the money could come from but make no mention of using savings.
When I started my DMP I was advised to lessen the monthly payment in my proposed budget by showing increased expenditure in certain categories. This together with the allowed savings element within the DMP has meant that I have managed to save enough to potentially make F&F settlement offers to at least one of my creditors.
One of my creditors has an online discounted settlement facility. One of the questions asks where the funds for the settlement have originated.
Savings is one of the options listed in addition to the examples you give.
i). Does answering “savings” as the source of the funds make it less likely the creditor would accept a F&F settlement offer?
ii). Are there implications for stating “savings” rather than saying, for example, that the money is a gift from family or friends?
Sara (Debt Camel) says
How large is the balance you are proposing to settle?
How much have you saved up?
How long has your DMP been running?
Terry says
I’ve been offered discounted settlements on 3 debts that are with debt purchasers. The discounts range from 40% to 60%.
The smallest of these debts amounts to 2% of total indebtedness; the next 8% and the largest 12%.
The DMP provider stated that because I’m unable to make pro-rata offers to all creditors they would not be involved.
As things stand, I could only accept or maybe make a counter offer to the smaller of these and one of the others. Not all three.
My DMP is yet to reach its 3rd anniversary.
Why I’m asking is because part of the savings originates as a gift from a family member and the rest is what I’ve saved up since starting the DMP. The creditor’s drop box menu doesn’t give a combination of the two as a choice and so I’m wondering whether it’s better to state gift or savings, or whether it makes no difference.
Sara (Debt Camel) says
I would say it was a gift – you wouldn’t be making the offer if it wasn’t for the gift, would you.
But if you haven’t saved up much, I would be inclined to only use the gift and keep your savings. You may need them if energy bills go up a lot. And there will be other offers later on.
Terry says
Yes. Good point. The anticipated OFGEM price cap increase in September is worrying.
Thanks for replying.
Sarah says
I am in ft employment and I have £48k debt
I have default / ended on 3 credit cards from July 2020
CC1: 5100
CC2: 11200
CC3: 9300
And a defaulted loan of 6000 from the same time.
Sainsbury bank credit card at £17000 but in arrears from July 2020, original limit was 8000, but due to non payment they have added interest every month.
Car on hp for 4673 payments up to date.
I went through a bad time when splitting up with my abusive (now ex) husband 2020 which resulted in the inactivity on the debts above.
I contacted step change and they suggested a DMP of £50 per month to be shared between them and it would take 72 years to pay off (I will be dead by then!).
My parents have offered me 13000 to help out but I’m not sure of the best course of action. For example, should make offers to pay 25% off each? Or make a full and final offer to them all.
Thank you in advance for any help you may be able to provide.
Sara (Debt Camel) says
are you buying or renting?
can you say some more about the car HP – when was this started? what is the interest rate? what are the monthly payments? and when does it end?
Steven says
Hi Sarah,
In March 2020 I defaulted on my Nationwide Credit card with a balance over £5400. It was then moved to ARC Europe in January 2021 who’re managing the debt on behalf of Nationwide. I’ve been paying them £29 a month since January. Currently the balance sits around £4300 (still quiet high) and well it’ll take 10 – 12 years to clear at £29 a month.
At what point would it be best to make them an offer? I’m hoping to offer them 30% but I’m guessing they’ll be reluctant to accept that?
Would it be best to wait another year or so?
Nationwide will not speak to me so I can’t deal directly with them like I’d have hoped.
All my other debts are cleared and everything is up to date at the moment. Just worried about prices increasing for food, utilities etc..
Thank you in advance.
Sara (Debt Camel) says
It may be best to just carry on paying the agreed amount. It would be very unusual for an original lender to accept 30% after only a couple of years. And use the money you have to pay your increased living costs.
Steven says
Is there a figure they would be more likely to accept or would it be more time related before they’d even consider an offer, especially a low one?
I guess I’m thinking about the future and potentially looking at getting a mortgage but I’m aware a default on my credit file would harm my chances / rate I’d be offered.
Thank you again for your response.
Sara (Debt Camel) says
Have a look at https://debtcamel.co.uk/full-final-settlement-rejected/ which looks at why an offer may be rejected.
Sam says
Thank you for all the helpful and understandable information on this site – its really difficult to find information online that is understandable, its even difficult to speak to people about it as various companies say different things. Happy I found this site.
I have been paying the DMP for several years now and my debts have been sold to various debt collection agencies with relatively small amounts left in comparison to what I have cleared over the years. I would like to clear the remaining balances though and have been offered early settlements with a couple of the creditors (20% reduction so 80% settlement) which is a little too high. I have however just asked one of them for the CCA information and they dont have it. They have said that they will request it though, and it will take up to 90 days. Based on this, could I write to them and make a very low offer because they don’t have this info or is it better to hold off until they come back to me with the CCA (if they can get it)? I only pay £11 per month to this company so can afford to wait but hoping to get a mortgage and it will look better if I am making no payments to step change from my bank account so want to clear everything ASAP.
Thanks
Sara (Debt Camel) says
A debt purchaser will very rarely have the CCA agreement – they almost always have to ask for it. You can’t assume that they won’t be able to get. And the fact they are asking the lender doesn’t mean they are more likely to accept a very low offer.
When was the debt defaulted?
Sam says
Ok thanks, probably best to wait for now then.
The debts defaulted in September 2016, around 14 months after the DMP began. Only after reading through this website I realised that I could have potentially challenged that based on the 3-6 month guidance and could have already been in a better position with it all off my file by now. Only a few weeks to go though and all should be off my file and in a better position.
My mortgage advisor has advised though, I should try to clear off everything ASAP so that when applying for a mortgage, my bank statements don’t show payments to the DMP. Just trying to figure out the best way to proceed with it all.
Susan Elvy says
Hi can you help me I’ve recently settled my account with oakbrook finance loan, after requesting a final settlement. They sent an email saying how much my final settlement on my loan was so I got help from my family and paid the amount and closed my account with step change. Then 5 days later I got an email tovsayvyhe agent that dealt with me has made a mistake and advised I still owe £432 this was a complete shock what can I do?
Sara (Debt Camel) says
Were Oakbrook aware that the settlement amount was coming from a relative?
Luke says
Hi
I have been on a DMP for around 4 years and still owe just under £10k from around £25k originally, I have 3 years left to go. One of my debts belongs to Cabot who have offered me a 70% reduction to settle what I owe to them, reducing my overall debt by £2k. I’d quite like to take them up on this offer to get my DMP paid off that bit quicker, would you advise I speak to Stepchange who my DMP is with, or go directly through Cabot to settle directly with them? I have 7 other debts, 4 are with collection agencies, the other 3 being store cards. Thanks
Sara (Debt Camel) says
Just accept the Cabot offer*. When it’s paid, tell StepChange and they will change the DMP so your other creditors get paid more.
* assuming you can afford this. Don’t get behind with bills or have to borrow more to settle this.
RF says
Hi,
I have 3 debts (loan &credit cards) totalling £14,400 on repayment plan since 2008 and no longer on my credit file. I have been offered money by my sister for a mortgage deposit. Will this debt stop me getting a mortgage? Thanks
Sara (Debt Camel) says
yes. A mortgage lender will see the repayments on your bank statement even though they are not on your credit record.
Two options. First you could ask the current creditors to produce the CCA agreements for the debts – they must be very old and there is a good chance that at least some of them cannot be produced, in which case the debts are unenforceable. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/
Second you could offer full and final setlements.
Laura says
Hi Sara, I have been a 80% partial settlement from a debt collector from a debt that defaulted in 2018 I have been making £10 payments for 6 months, I am going to make 50% counter offer for a full and final settlement. My question is will the date of closing the account be on my record for another 6 years even though the debt defaulted in 2018?. Thank you
Sara (Debt Camel) says
No, whatever happens this debt will drop off 6 years after the default date on the credit record
Sam says
Hi Sara,
I was wondering if you could give me some advice please.
I have been in a DMP since 2019 with Stepchange. I may be in a position in a few months where I can make full and final offers to my creditors and wanted some advice on what to offer.
All the debts are defaulted and come to around £36k in total. My largest one is £14000 and I’ve been making payments of £71 a month to that one. I was thinking of making an offer starting at 40% with the ability to increase that a little bit further up to a maximum of around 60%. Do you think many creditors are likely to accept such an offer? There’s about 10 years left on my DMP.
Sara (Debt Camel) says
Some questions that may sound irrelevant but which matter…
So you are paying about £300 a month to the DMP? Is that currently affordable?
Are you buying or renting?
Where is the money for a settlement offer coming from?
Have all the debts been sold to debt collectors?
Sam says
Yes £300pm and yes it’s affordable
I’m renting
Most of the debts are still with the original lender but with their collections/recoveries teams. A couple have been sold on.
The lump sum would be from redundancy
Sara (Debt Camel) says
How difficult will it be to find a new job?
Sam says
I’m fairly confident I’d find one pretty quick. I would be keeping part of the redundancy back as a backup hence the 40-60% offer.
My big concern is that lenders aren’t likely to accept 40-60%, in your experience how like is that?
Sara (Debt Camel) says
You would have a better chance of getting this accepted if more of the loans had been sold.
Or if you wait until you have a new job and you can present a new Income & Expenditure statement with your offer. perhaps you will need to travel further tyo a new job, do your DMP payments would have to drop – that would be a good argument for creditors to accept your offer.
I suggest you concentrate on job hunting at the moment – good luck!
Ryan says
Hi Sara
I have been working to clear my debts over the past year or so and now only have one main debt remaining, which is my Tesco credit card. I have focused on paying other stuff, due to this account defaulting I have just been paying £40 a month in a payment plan
I recently contacted Tesco regarding a full and final settlement, long story short I am getting a bonus from work which will result in me having around £600 extra in my bank, so I offered them a full and final settlement figure of £640, which is my normal payment (based on income and expenditure it’s what we agreed was affordable), plus the full £600 bonus
My current balance is £1400, so this payment would represent around a 45% of the total amount to settle, I suspected thay may atleast be slightly interested in negotiating a figure close to this, however they came back and countered with £1175, which is close to 85%
Obviously i can’t afford to pay that much as I simply don’t have the funds without looking for more credit which I don’t want to do, is it worth going back and trying to negotiate to something close to my initial offer? Or is it usually a case of the offer they come back with is as good as I’ll get? We’re 40% off so I’m worried they’re never going to come anywhere near the offer I made
I’d be interested to hear others experience with tesco credit cards and F&F settlements
Thanks
Ryan
Sara (Debt Camel) says
I suggest you reply that you have offered them your full bonus in the hope to settle this and that you cannot afford any more money so you will carry on making the normal payments and use your bonus to help with the rising cost of living.