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Lloyds TSB - Full & Final Settlement Offer


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Lloyds TSB - Full & Final Settlement Offer

 

I received a letter from Lloyds TSB today headed Full and Final Settlement Offer - without prejudice.

 

They are offering me a discount of 65%, leaving me with just the 35% of the o/s balance to pay.

 

I have 10 days to decide.

 

On receipt of cleared funds they will advise the Credit Reference Agencies to amend my records to show the account as partially settled.

 

It goes on to say that by paying this reduced amount of 35%, I will relieve myself of the responsibility for repaying the remaining debt.

 

I don't have a scanner, but that's the main points of the letter.

 

(1) Can anyone tell me please, are there any pitfalls to accepting this offer?

(2) Can they stitch me up some other way?

(3) If I was able to accept, do I need something else in writing from them?

(4) The 35% they are looking for is still quite a lot for me - is it worthwhile trying to negotiate a lower amount that I could afford?

 

Thanks in advance.

Florish

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1) Can anyone tell me please, are there any pitfalls to accepting this offer?

Without Predudice means that you could never use the letter as evidence in court.

(2) Can they stitch me up some other way?

As above

(3) If I was able to accept, do I need something else in writing from them?

They don't actually state they will remove the default.

(4) The 35% they are looking for is still quite a lot for me - is it worthwhile trying to negotiate a lower amount that I could afford?

That seems a low figure for them, if this debt is covered by the CCA 1974, have you done a Section 78 request to see if they actually have any legal right to collect this debt?

 

Don't worry about the 10 day deadline, it's a bit like the sale that ends tomorrow, then of course another one starts.

 

I am not expert of F&F's, this post will bump you up the list so others will see it.

 

David

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What a coincidence, I got exactly the same letter today. Offering to save me over £5k :) Maybe they are getting in the festive spirit a little early.

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Without Predudice means that you could never use the letter as evidence in court.

 

Not to be trusted then!

So does that mean if I accepted their offer, and they changed their minds

about not chasing me for the rest (discounted amount) of the debt,

I couldn't do anything about it, because of the 'without prejudice' in

their 'offer' letter!

 

 

Thanks for both of your replies Cashins

Florish

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You would be entitled to hold them to the agreement.

 

The rationale behind 'without prejudice' is that parties should be encouraged and free to embark upon negotiations to resolve a dispute without risk that their position on negotiations should be revealed to the trial judge.

 

If there is no dispute, the inadmissable status of the letter does not apply.

 

Further, once those negotiations have concluded in an agreement, the 'cloak' of without prejudice is lifted and the couret may examine the corespondence in order to ascertain the status of that correspondence. A straight acceptance of a 'without prejudice' offer concludes the negotiations and the court may look at the correspondence to see whether it demonstrates the existence of a concluded agreement.

 

Thus, on concluding an agreement, a letter in which an offer is contained which is marked 'without prejudice' and which is subsequently accepted, may be relied upon in court as evidence of there having been offer and acceptance and of the existence of a concluded agreement [Rush & Tompkins Limited v GLC (1989)]

 

x20

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you should make sure it is marked in full and final settlement of the whole amount, as if you are making a 100% payment, not a partial payment. They will 'write off' 65% of the debt and can always use this to offset against any money they owe you in future, i.e. charges, compensation etc.

 

plus, make sure the settled amount doesn't include any penalty charges, PPI etc that you want to claim back. Then make a 35% offer on the remaining balance. If there are open issues on the account, don't settle it. They use the write off later on. It never disappears.

 

i've been stung by this a few times, lost thousands and ended up paying more than the 100% on some accounts.

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And make sure that you get someone else to pay it on your behalf - There is some statute somewhere(I keep getting directed to it but forgot to copy it) that says if you do it, they could come after you for the "balance" but if a third party pays it for you the contract is with them so the F&F will stand...Or something to that effect, but don't quote me on it...I'm sure one of the experts can clarify this - It was Sequenci who posted the legislation but I can't remember where...:D

:)** Any opinion expressed by me is given with the best intentions - But I could be wrong so bear that in mind**:)

Missed Call Checker - http://whocallsme.com/Phone-Calls.aspx/077/m

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I'm not clear what Sequenci may have posted but I suspect that payment by a third party is suggested in order to avoid what is commmonly called 'The Rule in Pinnel's Case', a case decided in 1602.

 

The rule goes something like this. If A owes B £5.00 on Monday and on Tuesday, B says 'Give me £4.00 and we'll call it quits', A is not released from the liability to pay the remaining £1.00 for lack of consideration. The lack of consideration is found in the fact that B has given up the right to £1.00 and received nothing in return.

 

Overcoming liability where the debt is discharged by the payment of a lesser sum may be achieved by involving a third party. Taking the above example but extending it to involve C, if B accepted £4.00 from C in discharge of A's obligation to pay £5.00, in effect, a collateral contract is created, the consideration for which is that B promises to C to release A from the obligation to pay £5.00 in consideration of £4.00 received from C.

Note however, that for payment by a third party to be effective, the receipient has to agree to accept the payment from the third party and release the debtor from further liability. The Rule in Pinnel's Case is not avoided simply by C paying B £4.00. C has to make it clear that the payment is tendered with the intentino that upon its acceptance A is released by B.

 

All the above is of application where there is no dispute. If there is a dispute (and hence proper use is made of the 'without prejudice' cloak) the involvement of a third party will not be necessary.

 

Fast forwarding 400 years from Pinnel's case to the case of Bracken and Trickett v Billinghurst (2003) provides a modern insight in to the field of without prejudice negotiations and settlement by the payment of a lesser amount.

 

x20

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That's the one...I think he did say that the third party had to agree directly with the lender now I think about it...

 

I really just wanted to clarify if it is a good or bad thing to do and I think you excellent response clears it up. In a nutshell, in this instance there is no value to it - And probably in my disputes...:D

 

Thanks again X20 for a very understandable explaination..Much appreciated..M

:)** Any opinion expressed by me is given with the best intentions - But I could be wrong so bear that in mind**:)

Missed Call Checker - http://whocallsme.com/Phone-Calls.aspx/077/m

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I'm not clear what Sequenci may have posted but I suspect that payment by a third party is suggested in order to avoid what is commmonly called 'The Rule in Pinnel's Case', a case decided in 1602.

 

That'll be the one.

 

Pinnels Case + Foakes v Beer, HL, 1884 (which again was looked at in D&C Builders v Rees in 1966)

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