Thread: need to ask for settlement offers help!!!

Sheracer

Notwithstanding other issues for settlement purposes this is what you need to do and its quite important you follow the steps.

Ring up each of your creditors, ask them for a settlement figure.

If they ask if you are going to settle, don't tell them how much money you have but say you are trying to work something out.

When you have all the figures add it up. This gives you a total e.g.

Creditor a = 400
creditor b = 1500
creditor c = 2000
creditor d = 20000

Total = 23900

Then divide each by the total i.e.

Creditor a = 400/23900

Doe this for all the creditors and this will give you how much you should offer each one.

Now what I would recommend is that you write it all down on a bit of paper.

Then work out what 50% of the debts you owe for each creditor.

Now the fun starts

Ring each creditor in turn and say that you may be able to offer a settlement but you don't think you have enough to settle in full.

Tell them that you are making an offer of partial settlement which is subject to all your other creditors accepting their offers. make it clear that you are offering a sum which is pro rata the debt you have with them based on the money you may be able to raise, but only offer them 50% of the debt.

If all goes well you will be able to pay the 50% to all creditors and use the balance to make payment of the loan you have.

If the worse comes to the worse you may have to increase to around 65%.

I did this and ended up paying back around 60% of my outstanding debts.

Now an bother important couple of points

Don't be surprised if they wont accept initially, when you have spoken to one or two if one doesn't accept straight away don't ring them back but continue with the rest. Go back to those who haven't accepted and tell them all the rest have accepted and if they want any money now they have to agree to your figure.

When they have all agreed to your figures you need to write to them listing all the creditors setting out that they have all agreed to settle based on a binding agreement between the parties.

Send them the cheques in Full and final settlement.

I'm going to ask someone who knows about this stuff more than me to get her to check out my comments to make sure Ive got it right.

Basically you will end up with the debts paid off and not have any liability except the 20K debt less any money you can pay off hopefully.

If you get it wrong then they wont write the rest of the debt off and you could still have some problems.

When you have sorted all this out then you can claim back any unlawful charges you have paid and hopefully within a couple of months or so you will be right back on track .

HTH

Glenn

Goerge

1st off they will likey enter defaults unless the debtor is up to date and pays off the debt in total.

Anything else and its quite likley they will be defaulted in fact id say probable.

However, if there are outstanding charges then the claimant should reclaim those and make default removal a condition of settlement, its what im doing now.

Re whether it binding, if its doen correctly it is, but it needs to be clear to the creditors that the offer of settlement is conditional to all the creditros agreeing to their individual offers.

Its one of the exceptions from the 'consideration rule' I have asked somoen who knows a lot more about this than me to comments, but i have had severalpeople confrim this and by the way i have settled with two fo my former creditors and only one raised the issue of my short settlement.

I lauighed at him and told him i was quite comfortable with the position in that respect and they paid un full. they paid contractual interest too.

HTH

Glenn

Originally Posted by sheracer

thanks for the advice, but what i want to do for my own sanity is to write to them instead of phone because i know ill go to pieces Thats fine you can write it will just take a little longer to organise, and i am ok with paying the loan as the payments will be mangaeable once the credit card debt is cleared its the interest on the cards thats cripling me. i need to clear as much of the cards as possable in one swift move. then im not paying any more interest on them as they are all like 18% whereas my loan is much much lower than this. i couldnt get 30,000 loan i could only get 20,000 so i am hoping if i say to them i can pay in full at a reduced final total they will accept! i lost my job a few months back so we are living off my partners wages, thats why ive fallen into the trap off paying credit cards with credit cards!! hence more and more interest added every month with higher and higher minimum payments. ive never missed a payment because debt terrifys me, and i dont want to start missing them so im trying to wipe them before this starts to happen.

if someone could link me with a template of a letter asking the companys to offer me a settlement due to the fact my circumstances have changed, i was hopeing i could say i can afford to clear some of my debts and will be paying and settleing with those companies who offer me the best settlement offers, maybe i could be left with debt say 2-5 grand rather than 10 grand. then i could manage. if you get what i mean
eg say i owe creditor a - £2000, they may offer a settlement of £1700 that saves me £300 and so on

Re your last thoughts, everything is possible but with 20K you should be able to clear all of these with ease i reckon, you have 66% of the debt and that woul dbe enough if you dont want to bother with haggling i understand that just work out pro rata what you owe each one and send them a letter saying you have an amount to settle and this is it or nothing.

If you do this dont tell them you have the loan, tell them you may be able to obtain 20k to settle all your debts. its none of their business where the money comes from.

You could even write the same letter to all of them with a list of all the creditors showing outstanidng balance and your offer to each so they can see what your up to.

I would recommend that you settlee with them all rather than doing a few, ive been there and its best if you can get rid of the lot otheriwse it will come back to ahunt you and you will have to find another means of removing yuor liabilty for the rest of the debts.

Oh i dont think theres a template but if you want we could knocok up somehting simple

HTH

Glenn

As much as there are no rules inthis game, perosnally i would wait until the settlements are in the bag before sending them a SAR, wouldnt want them to play hardball because they think you might be planing something.

JMHO

Glenn

Originally Posted by sheracer

eg say i owe creditor a - £2000, they may offer a settlement of £1700 that saves me £300 and so on

If these creditors are banks ccc loan companies they will all settle for around 50 - 60% of the outstanding balance especially if you are in trouble, in fact its probalby best if you were obviously in trouble since this will show them you need to pay off the balance.

As i said its important you understand that in law unless you are very careful the creditor doesnt have to settle for a lesser amount than you owe, even if they take ytour moeny you could stiull be liable.

Glenn

George its true but it has to be binding on all of them so you cant pay any till they have all agreed.

I think you will find they know how much they are allowed to accept before you speak with them.

They don't accept the first offer they try to get you to raise your offer, Abbey did this so i left them till last then told them what i had and they took it.

Most wont give you a figure but would talk percentages in principle.

MBNA funnily enough and Barclaycard were the easiest to deal with in my experience.

anyway do what you feel you must but please consider the potential issues if you don't get it right.

HTH

Glenn

Sheracer

I would write something like this

1st letter

Dear Sir/Madam

Re Acc No

I have to infomr you that i was recently made redundant (or whatever the situation is) and I can no longer maintain payments as required by my contract.

It is my intent to try to raise a sum of money to settle all of my outstanding debts and to pay off all of my outstanding debts.

I therefore need a settlement figure and would be obliged if you could supply me with a figure you require for settlement of my debt by return please.

Once I have contacted all of my creditors and understand what funds i need to settle me debts i will contact you again to arrange settlement.

Yours Sincerely

Sheracer

2nd letter


Dear Sir

Re Acc No

As I explained in my earlier letter I an no longer employed and need to make you an offer of settlement.

Since I can no longer afford to maintain the payments and fear I shall fall into serious debt, I am making this offer in the hope that you will give it serious consideration.

I have a number of creditors with whom I am entering into negotiations to reach a satisfactory settlement arrangements as I have already explained.

However following my receipt of the settlement figures from all of my creditors i find that I will be unable to raise the full amount outstanding.

On this basis i intend to offer each creditor a portion of the money I can raise which is to be distributed to the creditor pro rata on the basis of the proportion of my total debt each creditor is owed.

The offer is made on the basis that this is conditional on all of the creditors accepting the offers made to them and that no settlement can be made if one does not accept the offer.

Once accepted the settlement will be binding between all of the parties and will be in Full and final settlement of the debt outstanding.

I have set out below a schedule of my creditors, the amount owed and the proportion of the sum I can raise alongside.

If you would signal your acceptance of the offer, once all creditors have agreed to their offer i will make the payments by cheque as soon as possible

Yours sincerely

Sheracer


I need to read these through and i would like somoen else to cast her eye over it too so think abot it as a tamplate and as work in porgress.

HTH

Glenn

Originally Posted by sheracer

i really really want to get it right, im not well at the moment, and i cant take any more stress im an absolute nervous wreck. i just want to be able to survive on the money i have got coming in now and the only way i can do this is to clear the credit card debt. so doing it right is very important too me, with no repercussions (sorry cant get the spell checker to work!) in the future.

Sheracer, i know the feeling, without wishing to sound trite once you found this place help is at hand.

GLenn