Repayment offers - what %age is reasonable?

[Yog sothoth]

In the next few months, I am hoping to be able to offer settlements to try and close some of my debts out, particularly where there are CCJs and/or charges on the property, so that we can remortgage, hopefully with a ‘normal’ lender. We are currently trapped in an interest only mortgage and need to get a different package, but these things effectively stop us doing so.

We are currently paying several creditors, either by court order or by mutual agreement, various fixed sums per month ranging from £5 to £40, and two companies have a charge on our house.

Some of the payments under court order are due to go on until way after we are dead, assuming we don’t live to be 130! So they are unlikely to get the debt repaid.

What I’m wondering is, how does one go about making offers of repayment, if one can only offer a fraction of the whole?

Say, if I am paying a £10K sum at £10 a month. That adds up to 1000 months or 83 years! If I offered the creditor a one-off payment of £1K in settlement, would I be being ridiculous? It seems they could do a lot more with a grand than with a drip-feed of a tenner a month until I die (I’m in my early 50s).

And, if they took my grand in final settlement, could I then get CCJs and charges removed?

[BRIGADIER2JCS]

Hi, Full & Final Settlements, need to be handled very carefully as you could find any remaining balances coming back to bite you later.

 

With those debts that are subject to CCJs the judgement will remain a matter of public record for six years from the judgement date paid off or not.

 

You will almost certainly be asked with any type of mortgage app if you have had any CCJs (usually in the last years).

Also any lender will these days be looking at an absolute minimum of good to excellent credit management of 3 years and for mortgages probably longer.

 

To get proper advice for this you need to list the debts, their status (CCJ/CCJ and Charging order/charging order/arrangement to pay with creditor or a DCA.

The amount outstanding, the companies concerned.

 

With 'straight forward' debt with creditor or a DCA one would look to making an opening offer of 10-15% of the outstanding balance plus it being conditional on the remaining balance not being sold on to any 3rd party.

 

I have to be upfront here this will be a long hard slog especially with the CCJs.

 

What is the full amount of your delinquent debt?

[Yog sothoth]

Hi. I'm not sure just off the top of my head. I'll need to do some sums. It's in the tens of £k though.

[BRIGADIER2JCS]

May be worth making a file for each debt, with all the data for each one, amount o/s default date / CCJs post them here it will be easier to advise on where to start and what to offer.

[Yog sothoth]

OK I'll do a spreadsheet. Might take a bit of time but I'll be back on here once it's done.

[BRIGADIER2JCS]

OK I'll do a spreadsheet. Might take a bit of time but I'll be back on here once it's done.

 

OK Yog.

[Yog sothoth]

OK, after much shuffling of paperwork and organising of files, I have got things in some kind of order. Not pretty reading, although it represents a bad time in both my life and my wife’s (largely before we met).

In total, including those debts where the creditors have not been in touch for a few years, we jointly owe £51K. Terrifying, but meh, I’m used to it now.

We have 2 CCJ’s, both in my wife’s name, with Lloyds TSB and Link Financial. Both of these also have a charge on our house. There are payment arrangements on both these, which will remain in effect for many, many years.

I have 2 other payment arrangements, with Cabot and CL Finance, for small sums each month, which are fixed (non reviewable) and will go on for decades, well beyond my lifespan. There is no CCJ on these.

Of the remainder, these are all in dispute. All have had s78 letters sent, either to the current owner of the debt, or (usually) to the OC or a previous DCA. Most have not responded and of those that have, two have provided copy CAs (or at least signed application forms). Most are dormant however, with no contact in the last 2-4 years.

So it is the CCJs I am most concerned with (total £17k), meaning LTSB and Link. How to approach them, and what is realistic? We have a limited sum to play with but it’s an opportunity to get some debt off our backs and get out of our mortgage trap.

If they will play ball, then there are the other ones where we have fixed payment arrangements but no CCJs. As these payments are paltry and endless, surely they’d jump at a chunk of money? But let’s look at the important ones first: LTSB and Link.

Oh and, if a creditor accepts a full and final settlement, does that mean we can get the charge removed from the house?

Oh and one very last thing! Is it still possible and worthwhile trying to reclaim bank charges and PPI from old bank accounts? I had 12 years of PPI payments on a previous mortgage with HSBC and Bradford & Bingley before them. No idea how to go about it but a debt adviser suggested we might be able to get back a substantial sum, which would help clear more of these debts.

Edited August 21, 2013 by Yog sothoth

[BRIGADIER2JCS]

Hello Yog,

 

Let's go to your last paragraph first.

 

Bank charges ( current accounts) are no longer open to reclaim since the OFT lost the landmark test case on this.

Penalty Charges on Credit Cards and loans are reclaimable still so the should be reclaimed before considering any full & final repayment offers or repayment plans.

 

PPI on CCs on Loans most certainly reclaimable if misssold.

 

There are some site team members who are superb at helping with these reclaims if you post up the details of the accounts and the PPI details I know they can help you and with no greedy claims company taking a slice.

[Yog sothoth]

OK that's my next job! What if I no longer have account details (we're talking 80s/90s)?

[Yog sothoth]

Right Brigadier, I am engaged in a search for PPI details but in the meantime, I need to get cracking with these offers.

 

Just hypothetically, let's say I have approximately £10k to play with, to try and pay my creditors off. based on what I posted above, where should I start and how should I go about it? I presume there's a right way and several wrong ways?

[Yog sothoth]

Bump.

[Yog sothoth]

Hi folks. I really do need to make a start with these companies, so any help would be very gratefully received.

 

Should I approach each creditor one at a time, and if so, what should I offer them?

 

Obviously I want the ones with a charge on the house and a CCJ sorting first, as they are preventing us ever remortgaging. So please help!