A reader, Mr W, asked: I had credit cards and got myself in a mess when getting balance transfers but keeping the old cards. Then I lost my job last year, but I am now working again. I have defaults ranging from 2015 to last month. All my debts add up to about £6,500. Many of them have offered me a discount if I clear the outstanding balance. I have been offered a 20% discount on a £3,500 … [Read more...]
Articles about Full and Final settlements
A Full and Final settlement (F&F) is an offer to a creditor of less than the amount you owe. If your lender accepts, the remaining debt is wiped out.
They are described in detail on Debt Camel's Full & Final page, together with their advantages and disadvantages, when they are most often useful, how to offer a Full & Final settlement; their effect on your credit ratings etc.
“Is it too soon for low settlement offers to be accepted?”
A reader, Mr P, asked: I have debts of around £30,000 on five credit cards and loans, which I couldn't pay from last summer. A Debt Management Plan (DMP) was set up a couple of months ago. This will take about ten years to pay off. The DMP firm suggested an IVA or bankruptcy as I'm not a homeowner but I do not really want to get into an IVA or bankruptcy as these will affect my credit score … [Read more...]
Settling old debts – ask for the CCA agreement
A reader asked: I have a Debt Management Plan where I still owe 17k to 10 creditors. I have been paying for ten years at £150 a month, so it will end in about 8 years. Most of the debts have gone from my credit record but a few are marked as “on a DMP”. I want to pay off the debts and improve my credit rating. I have been offered about 7k by a relative, so I could offer all my DMP creditors … [Read more...]
Getting a clean start after gambling debts
A reader, let's call him Mr C, asked: I have been in bad mental health and have in periods of illness suffered big losses due to online gambling. I used to earn £30,000, I now only work part-time, getting c £700 a month, and have moved back to my parents. I have debts of £27,000 with £1,000 a month repayments. Some debts are very new eg a £8,000 loan three months ago. I am very unlikely to … [Read more...]
How F&F settlements affect credit ratings
A reader has asked how Full & Final settlements (F&Fs) would affect her credit rating which is currently looking good as her debts were all defaulted and have dropped off her credit record. A full and final settlement happens when the creditors agrees to accept an amount which is less that the total owed to settle a debt, and agrees that the debtor will not be pursued for the remainder. … [Read more...]
Will partial settlement make it hard to get a mortgage?
Ms F asked: "I have been in debt management for five years after my marriage breakdown. After an inheritance, I want to pay off my DMP as it will carry on for years. I could pay in full but my house needs some urgent work and my car is on its last legs. I asked about my credit score if I offer a partial settlement and was told this would show as partially settled on credit score file. Will I … [Read more...]
Had a debt letter after a full & final settlement?
A reader asks: "Five years ago I had to default on a credit card. Two years later a partial settlement was agreed and I had a letter confirming this, saying the bank won't be chasing me anymore. A year ago I got a letter saying the other half of the theoretically satisfied debt has been sold to a debt collector. I ignored this but the debt collector has now been chasing me for a couple of … [Read more...]
Use a gift to make Full and Final settlements
You can use gifts to make settlement offers to debts you are in arrears with. These offers are often called called "Full and Final offers" and F&Fs for short. They are explained in detail here. Using a gift of money to do this is almost always a good idea! In a F&F that 2k could potentially be used to clear £3,000, £4,000 or more of debt, so it can be an excellent use of the … [Read more...]
What to do if Full & Final settlement offer is rejected?
A reader asked what she should do as her reasonable Full & Final settlement offer had been rejected. It's going to seem obvious, but the creditor rejected the offer because it didn't seem reasonable to them. You may be thinking "I paid off the amount I borrowed ages ago, their interest is too high" or "They probably bought this debt for pennies, so they should be happy to accept 10%" but … [Read more...]