Full & Final Settlement Offers - Advice please

[fredsdebt]

Hi all,

 

I am looking to get myself out of debt once and for all by making an offer to my creditors with a Full & Final Settlement Offer. Obviously once offers have been made it is a impossible to back track and therefore we see it as vital that we approach in the best way to have the best chance of getting the replies we need.

 

Help and advice requested with the following questions:

 

1. What is the best way to approach the credit card companies - individually or all together?

 

2. What sort of ££ figure or %age against what I owe should I be offering to the credit card companies?

 

3. I am looking to do this asap as I am looking to do this adding the fact (weight to offer?) that I am currently on Job Seekers Allowance.

 

4. If some work comes along then I will take it. Should I wait untill I am back in employment before trying to make offers?

 

5. If I make full & final settlement offers will the card companies see that we have the house and look/assume there must be (or likely to be) equity in there and turn down our offers saying we should sell the house or remortgage or borrow/loan against it?

 

 

Thank you for reading this and appreciate any input from the forum on how best to deal with the above.

 

Fred

Edited October 30, 2009 by fredsdebt

[blueda]

Hi Fredsdebt and welcome to CAG, i have requested site team to have a look and advise you.

[42man]

Hi FD.....welcome to the CAG forums....if it was me in your position,

 

I would give the National Debtline a call they are free, confidential and impartial - National Debtline – Free, Confidential Debt Advice – Call 0808 808 4000

 

I would first of all find out how many of the cards have PPI cover ? (any of them ? have you tried to claim ?).....if you have PPI with any of them and you have tried to claim but were not granted the coverage in case of your loss of employment then this would probably be considered missold PPI.....

 

Any excessive penalty charges at all ?

 

Secondly I would send each one a CCA request (how old are they ?).....

 

You can find a CCA request here - http://www.consumerforums.com/resources/templates-library/86-debt-collectors/581-cca-request-letter - for each one you need to send a postal order for £1 and send recorded.....

 

Bear in mind when a debt is sold to a debt collection agency they are normally sold for between 5% and 30% of the original face value of the debt......

 

I would also spend some time reading around these forums also as you will pick up some useful information....

 

Once you find out how 'enforceable' your debt is then you can make them an offer.....

[fredsdebt]

Thank you for your replies.

 

Here are some answers to the questions raised and some additional information.

 

I am in contact with National Debt line and they have been helpful with general advice only.

 

None of the credit cards have PPI.

 

You mentioned excessive penalty charges - the credit card accounts have all ben hit with so many £12 charges - for late payment, over limit that we have lost count and that along with the multiplying effect of interest it has all got completely out of hand.

 

It seems the only way that the card companies will stop charges and freeze interest is for them to pass the debt over to their debt collection agency.

 

Can you explain further the point made about the debt when sold to a debt collection agency is sold at between 5% and 30% of the original face value? I asume that from this that the if it was sold at 30% that the debt collection agency have potentially 70% of the face value of the original debt as potential profit they can make from us? Does this mean that I may need to go as high as (proberbly higher than) 30% in order to have a chance that a full and final offer may have a chance of being accepted?

 

I have been reading round the forum and have picked and read some interesting and useful information. Thanks.

 

Of the cards we have 3 were taken out prior to April 2007. These are (with slight changes to names!) Barclycard, CoOp'tive bank, Layds TS B. I have copies of the agreements signed from my CCA applications. I am looking into if they are enforceable or not. All seem to have the prescribed terms although the Layds TS B looks like the "attached terms" has been cutout and pasted and then photocopied!! The other 2 look ok.

 

I have 2 others that are 2007 but after April 2007. I have requested CCA copies but have not got these yet. The other 3 cards are dated 2008.

 

Should I try and make an offer to individual cards or should I approach all of them together with a prorata offer once I know how much I can raise (via family offer to help with money)?

 

Based on above figures etc.. and assume I am dealing with debt collection agencies rather than the credit card companies themselves what ££ or %age should I look to offer and what would/could that be worse case for it to be accepted?

 

Thank you.

[lihi]

Hi Fredsdebt

 

You can do the F&F one of three ways.

 

Use the template letter in the template library and pro-rata the amount from equity though I would wait until you know the money is coming and continue paying them at the rate of £1 pcm (which is an acceptable offer in your situation).

 

Or you can write to them, explain your circumstances briefly and ask them if they would accept a f&f and if so what would they be prepared to accept.

 

Or not pay them until it gets passed to a debt collector and they write to you with an AMAZING xmas offer. (I sort a few other close friends and relatives debts and these come out every year).

 

I personally tried the CCA route and did the blinking game, I'm still playing this with a store card and haven't and refuse to pay until they enter into negotiations for a f&f. Even though it's been quiet and I hear nothing, I hate it because I feel like I'm constantly waiting for something to happen. I write to them to tell them I've moved, which they acknowledge and then I try to push for another negotiation and then they ignore me. You may have better luck.

 

Unfortunately some won't discuss it at all unless you stop paying or you've been paying the £1pcm a while and your circumstance change. They're all different. 42man is right, the debt collectors buy for stupid prices from the original creditor and from each other so you're in a much better position to negotiate with the dca.

 

You need to do what ever you feel comfortable with. Maybe try asking them to name their price and if you don't like the response pro-rata the offer.

 

Good luck

[fredsdebt]

Thanks lihi for your posting.

 

I also think maybe I have a better chance to deal with dca's rather than the original credit card company.

[middenmess]

Use the template letter from the library to claim back all of the £12 charges and O/L charges plus interest before entertaining any F&F offer.

[Mydogsawestie]

Have you rang Payplan as they will negotiate on your behalf & sort out payments to them on what you can afford. We are with them & our interest got frozen on our cards.

 

Its only one card thats proved a prob (MBNA) to which I have had court papers served to me, I now play them at there own game having CCA them etc & now they are not getting a penny out of me.

 

Payplan have been marvelous as we are in a similar situation & have debts like yours. In time you too can decide if you want to CCA them & go down that route but in the meantime if you want to stop all the interest & harrassment calls etc we found it was a huge weight off our shoulders going with payplan who sorted it all out for us.

[IdaInFife]

you can claim back all those charges the cards to reduce the amount owed.

 

can you scan and delete any personal info on hte agreements you have recevied and post up here?

 

if you are going to make full and final offers start low say at 10% then you can always increase it.

 

Ida x

[fredsdebt]

Thanks for the last couple of postings. A couple of points:-

 

1) Is there a letter template to use to argue a case about the £12 charges? I didn't see one in the letter library?

 

2) I visited the Payplan website and this looks worth going into further - especially with the above recommendation as there are loads advertising help on the Internet so always good to hear someone who has used one of these to help as a number sound too good to be true!

 

3) I have been asked by a couple of the Credit cards for an Income & Expenditure planner to be filled out. I have had calls chasing up for this information thretening to put my file out to Debt Collectors. Looking at the above and my own thoughts on this I am tempted to withold the information so that the debt goes to a Debt Collector sooner as I feel this (ie deal with debt collector) is proberbly better in order to get a full and final offer to them accepted. Any views on this course of action/stance? - ie, is this a better option than dealing with credit cards companies who think ok, for now lets just load the account up with interest and charges and cancel your credit card then in a few weeks time (I hope!) when I am back in work we will have another go and that I will bring the account back in line. Note that I have tried doing this for years and only end up 'robbing Peter to pay Paul' and never getting anywhere as I can hardly pay the accruing interest let alone reduce the outstanding balance.

 

4) I have had 'threats' by the credit card companies to mark my credit file as behind/no payment which I hear will sit on my credit file for 6 years - I am not worried about this as my credit file BEFORE being unemployed was at 16 on Experian so I cant see I have much more credit worthyness to loose! Again as part of any full and final settlement I will try to have my credit file tidied up as best I can.

 

5) Any further view on starting at offering 10% of the debt as a full and final settlement? Also should I try offering individually or a pro-rata involving all?

 

6) One of the Credit Card companies is also our bank that we have a current account with. I am going to move our banking but we have an overdraft facility that we use to help make ends meet. I havent switched to a new bank yet as I didnt want to upset the apple cart with the bank who may see it as me leaving them with the debts as I go elsewhere. They have now threatened to just take money from my current account and pay to my credit card that I have with them without my permission? Can they do this? The time is getting close for me to abandon this bank and move our banking elsewhere - I was given a link that tells you which Banks are connected to other banks and credit cards and finance companies as it seems to make sense to go to a bank that has no connections with any credit cards I have). I will look it up again and post up here.

 

Thanks,

Edited October 10, 2009 by fredsdebt

[lihi]

Hi Fredsdebt

 

Not seen anything within templates, think you'll have to knock up your own or browse the site and see if anyone else has a good template you can borrow.

 

Found these links for you

 

The Office of Fair Trading: Current credit card default charges unfair (credit card charges)

 

I can't find anything specific to mortgages but the same principle applies.

 

Debt management firms are good like payplan and CCCS because they're free and they do take the hassle away. It's all down to personal circumstances and whatever suits you but whatever you do don't use a company that takes a cut of the money you pay them (like I did before I found CAG).

 

The majority of all credit cards will default you once you join one of these schemes but if you're holding out for them to pass you over to dca's they're supposed to default you before they do this anyway.

 

I would do as Ida says and request or post up the agreements you have (minus personal details). You can review PPI and charges and use this to get the totals down and then start f&f negotiations, it may even zero the balance. Does that make sense? Then why don't you do a sheet for both, compare the totals against each other and start with the lowest for each. They're not intelligent enough to talk and compare what you've offered unless it's the same firm.

 

PPI misselling victim has £8,000 debt written-off - MoneySavingExpert News

 

The default drops off the file 6 years from the date recorded, for me I prefer this now because most drop off in the next year but some marked my file as dmp for 4 years and then randomly defaulted me which puts me out for 10 years but it's horses for courses. Does your awarding body only state no BR or a clean credit record?

 

For the bank, don't delay and move because really they shouldn't take money but they will or they'll freeze. Sod what they think, even if they default you it will be removed when you get the bank charges back anyway. Definitely do your research and stay away with other banks connected with your own. I have a document somewhere which gives a good overview on bank accounts for those with poor credit rating, it was issued by CAB. I will load it up seperately.

[lihi]

Bank account advice attached

basic_bank_accounts.pdf

[fredsdebt]

Here is a link to which banks are linked to other trading names eg. credit cards, finance companies etc..

 

Banking Code Standards Board

 

I shall be using the above and the PDF link from 'lihi' (post #12) above to work out which banks I can apply for that are not going to be linked in anyway to existing credit cards that I have.

 

Also 'lihi' there is no PPI linked to any of the credit cards I have.

 

I like the suggestion to maybe try and sort out one or two of the smaller debts on credit cards first! I keep seeing/reading advice about doing a prorata so that it is "seen as fair" (!!) but I am wondering now to let the debts go to Debt Colector (as they would only have paid 30% for the debt (any other information knowledge from anyone if 30% is max likely debt collectors to buy debts for from credit card companies??) then go for the smaller ones first and also argue the CCA route on my Llayds TS B credit card. The others are unlikely to be able to be argued with CCA route as taken out after April 2007.

 

Thanks,

Edited October 10, 2009 by fredsdebt

[fredsdebt]

you can claim back all those charges the cards to reduce the amount owed.

 

can you scan and delete any personal info on hte agreements you have recevied and post up here?

 

if you are going to make full and final offers start low say at 10% then you can always increase it.

 

Ida x

 

Hi Ida,

 

After reading your post again I am interested in the reference to claiming back the charges on my credit cards. I have seen discssions on this forum regarding bank charges and that under The Social Security Act 1992 banks should not take charges from your benefit income. Does this also apply to credit card companies? Also, do you only have a case to argue if benefits are your only source of income - as we also have my wifes part-time earnings.

 

I would also like to raise a point regarding the fact that the bulk of the credit card debt is in my name yet the credit card companies 'happy' to include my wife and our household income together in order to seek payments. Is there any mileage or point trying to seperate the debt v income or the fact that we are married 'ties' both together with regard to debt?

 

Thanks

[fredsdebt]

Hi Ida, I have uploded to Photobucket two of the CCA's I have received.

 

I have posted a new thread on the forum here:

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/225605-lloyds-tsb-cca-enforceable.html#post2498611

 

and also here with this CCA:

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/225615-barclaycard-cca-enforceable.html#post2498696

 

Any comments? Thanks

Edited October 13, 2009 by fredsdebt

[fredsdebt]

I have also posted up on a seperate thread CCA details from MNBA.

 

Link here: http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/227085-mbna-cca-enforceable.html#post2515301

 

Any more comments/advice on full and final settlements?

 

Thanks

[Bigdebtor]

I can really empathise with Fred - being in much the same position although with a much higher level of debt and also higher equity in my house.

 

From the lots of debt advice I have had (from CCS, lawyers, this site) I would suggest:

 

First point - DO NOT SELL your house other than to avoid repossession as you will probably NOT get any other mortgage with your current credit rating. Try to get mortgage on to interest only for a time - you can then keep this going - and probably extend it - while you rebulid equity in your own home. CCCS gave me this advice and I have managed to use the repayment amount saved to get all debtors (apart from RBS/Direct Line - see other thread) to suspend interest and take lower monthly payments. In any case renting will probably be higher costs than current interest only mortgage payments.

 

Second point - as already advised get all agreements to see what is actually enforceable and chase for unfair charges refunds now.

 

Third point - If things get dire then how about renting out your own house and moving into a cheaper one you rent for a time?

 

Final point - it would be really helpful to me - and probably to Fred -and no doubt many others too - if other CAGGERS would tell us just how low F & F short settlements they managed to acheive and if this was with the original creditor or debt collectors and before or after seeing agreements. May be worth starting a new theread "lowest F%F settlements"?

Edited October 21, 2009 by Bigdebtor
typos

[fredsdebt]

Hi 'bigdebtor'

 

Thank you for your input which I read with interest (its the only "interest" thats good for me at the moment!!).

 

I take your point about not selling the house. Reading your comments we have only decided to do this as we cant see any other way to have a chance to get out of all this mess once and for all. We have been 'robbing Peter to pay Paul' for years trying to keep up with the monthly credit cards and the debt and it has taken its toll on us all as a family. We are now able to claim the Morgage Interest Relief as I have been on Job Seekers Allowance for over 13 weeks - although the form filling and hoops to jump through for this is a joke/disgrace imo.

 

We are looking at those CCA agreements for the credit cards that are prior to April 2007 and will try that angle. With the other couple of cards that are after April 2007 we are looking to see if we can get a Full & Final offer accepted. A close family member has offered (and has access to cash quickly) to lend us money quickly if any offers are accepted.

 

Not wishing to 'milk' my current circumstances (on Job Seeker Allowance and wife working part-time hours + o/time) but maybe it could add some weight to offers made ie. they get an full and final offer from us (start low and negotiate from that) else continue to get £1 each month.

 

I think it worth going at the full and final route now on those cards that are dated after April 2007 so that when work comes along again hopefully we can have money to start again rather than using credit cards. The bottom line is the credit card debt has to go. We dont really want to just keep paying reduced amounts or nominal amounts as the debt will still be there for the rest of our lives.

 

I would also when I get back into work feel that I achieved something positive whilst being out of work whilst I have the time on my hands to research, make phone calls, write letters etc...

 

So hence looking form help, advice on the best way to approach full and final settlements. Reading your comments 'bigdebtor' I agree it could be a good idea to start a thread on full and final settlements - general advice rather than specific to individual Caggers personal circumstances. I will do this after posting this reply.

 

Thanks,

[Bigdebtor]

Fred

Thanks for the reply. Good idea to set up a new F&F thread. I'll certainly put in my experiences so far once it's up.

 

BTW- you didn't say if you had definitely changed your mind about selling the house?

 

BD

[Bigdebtor]

Fred

 

Winston 44 has just set up such a thread - "What's the lowest full & final settlement?"

 

BD

Edited October 22, 2009 by Bigdebtor
Typos

[andie_303]

Hi there,

 

Just to add a little info here sometimes you can get away with sneeky offers in the hope that they don't actually read the letter before banking the cheque.

 

Some big companies have mail systems that when letters are opened they seperate the cheque out and send it to finance to be banked and the letter goes off to some other department to be read.

 

There is case law out there that says if a cheque comes from a 3rd party and is banked then that is that - it is deemed the accepted the offer and they cannot pursue it any further.

 

I have done this twice now the first being a 20% cheque the second just 10% both were from a friends cheque book and the letter stipulated it was in full and final settlement on my account number and should they not agree to this the cheque should be returned within 7 days and my credit file to be updated to show the account as fully settled and negative information removed.

 

Both cheques were banked and whilst one company tried to put up a bit of a fight when they read the letter after the cheque had been banked they realised that there wasn't much they could do and so closed the accounts and ammended my credit file accordingly.

 

Just something for you to think about - you have nothing to lose.

[Bigdebtor]

Andie

 

Brilliant idea! Any copies of the letters which accompanied the cheques?

 

Anyone else got similar success stories?

 

BD

[fredsdebt]

I have been looking round on this forum for advice on Full & Final Settlements. I read with intrest several threads where other Caggers have asked for help but taking into account their own personal circumstances.

 

I think it would be very helpful to not only myself but other Caggers is some more general information and advice but not getting too deep into anyones personal circumstances nor stating fairly obvious stuff like 'make sure you get it in writing' either. Also not looking to get too bogged down in the e.g 'have you sent off under CCA for a copy of your credit card agreement?'.

 

I think it would be useful to those that eg. have credit cards post April 2007 - so CCA requests are not worth applying for, but there is still a debt to sort out and maybe a Debt Management Plan (not knocking these) is ok for some circumstances but maybe not for others (like me) who want to try and get rid once and for all - even if it means selling up (release house equity etc,,) and using a lump sum to sort it out rather than paying off small amounts for years to come.

 

Points I would like to see covered:-

 

1. Any rule of thumb - %age of debt to allow for as a max plus how low should one start.

 

2. Must do points - eg. direct funds via a third party (close friend/family)? The correct approach to making the offers.

 

3. Are there different approaches to deal with the original creditor or debt collection agencies? Are there different approaches depending whether its credit card debt or other unsecured or secured debt? - perhaps if there are major points then split the tread into unsecured debt approach and secured debt approach?

 

4. Legal issues regarding making full & final offers - being accepted/agreed and how to make sure they dont/cant come back because of a technicality or some minor legal angle which you didnt cover.

 

5. Tidying up your credit file afterwards - wording etc.. to ensure this is done as part of the full & final offer. ie. correctly worded letter templates or links to where they can be found.

 

6. Any other points or comments - eg. if you feel you have a case to dispute a debt and make full & final offers which are rejected and you end up in court can you use the fact that you have tried to settle the matter outside of court without sucess - would the judge look more favourably asuming offers reasonable(ish!) to be more sympathetic to you rather than your creditor?

 

7. Is it better to involve professional help eg. Solicitor rather than do it yourself and perhaps not be taken seriously - just be given the run around eg. ignoring letters (taking an age to reply) and leaving you 'dangling on a string' not knowing if your offer has been accepted or not.

 

8. Taking into account the recent events in the financial banking world and the recession etc.. Has this made things easier for debtors who owe significant amounts do a full & final settlement deal today that say 2 years ago?

 

Just a couple of points - I am sure there are many more.

 

I am hoping one of the Site Team will help collate all and any usefull information and post up as a 'Sticky' guide outlinning how best to approach full and final settlements.

 

Maybe there is a view that this should not be done as we know that not just Caggers read this forum!! and maybe having something like this could give up too much information to those that dont need it but could find it useful?

 

If it is viewed as not a good idea then I will happily ask for this thread to be closed down or I will simply edit/remove the above.

 

Thanks,

Edited October 22, 2009 by fredsdebt

[fredsdebt]

Hi 'bigdebtor' here is a link to the thread I have started to try and collate together advice on full & final settlements.

 

I see there are other threads most get tied up in that particular Caggers personal circumstances and these then get lost in amongst all the many postings. What I have asked for is a 'Sticky' guide to how best to do 'full & final' settlements and hope we can pull together the best advice as a summary.

 

http://www.consumeractiongroup.co.uk/forum/getting-out-debt/227600-final-settlements-how-approach.html#post2520765

[fredsdebt]

Andie

 

Brilliant idea! Any copies of the letters which accompanied the cheques?

 

Anyone else got similar success stories?

 

BD

 

I read with interst 'Andie_303' suggestion I am a little concerned that someone may take this advice and get in a real mess with it. What we need is the facts and best addvice first then take and apply to your own circumstances rather than taking chances (which I think this advice would be) that you can do it 'sneaky' and get away with it. This is especially true where you are considering sending chunks of cash which if you get it wrong the creditor could easily say "thanks for the payment, you still owe us £££££ as we dont recognise what you have done and our legal advisers say you are wrong - thanks for the payment on account though".

 

The letters 'andie_303' used though would be useful as would more on the case law used!!

 

Thanks,