Full & Final Settlement Offers

[Chris4918]

My Fiance and I have recently had a property repossessed and owe £41,000 to the mortgage lender. When we received the first phone call chasing the payment or suggested payment plan we were told that the lender may accept a lump sum payment to close the account down. This sum was in the region of £7,000. Due to the arrears and subsequent repossession we have fallen behind on other payments (Egg & HSBC loans). We had spoken to an IVA company who not only wanted to charge us a fortune for their help but told us we would still be paying out for years to come. They did however advise us that most companies will take a lump some payment of around 25% of the outstanding loan amount (HSBC will want 40%).

 

We have since been speaking with family members who have offered us £15000 to try and clear all the debt before we end up going bankrupt. It breaks down as follows:

 

Mortgage owed £41,000 - Offered £7,000

Egg Loan owed £11,000 - Offered £3,200

HSBC owed £8,000 - Offered £3,500

 

As you can see apart from the mortgage offer, the other two offers are over what we were advised by the IVA company.

 

Has anyone here had any previous experience in this and what are our chances of having these offers accepted?

 

Thank you,

Chris

[loobyloo85]

Hi there,

 

Have you looked into doing an IVA with Payplan, they are free of charge. The creditors overall like to see about 20-25% of the debt being settled. Even if you dont try the IVA, you could go into a DMP and complete a full and final settlement with them. This way your case officer would contact all creditors on your behalf, ask how much they would individually be willing to accept, and then await their response. This way you know how much to offer them and what they are likely to accept.

[Chris4918]

Thanks for your response.

 

I actually have a plan with the CCCS at the moment for debts in my name. They started at around £28,000 and now down to around £15,000 so this is being paid off slowly.

 

My Fiance has the 2 loans with HSBC and Egg in her name only and the £41,000 owed to the mortgage lender is in joint names. I actually had a response from the DC regarding the mortgage today in response to the £7,000 offer we had made. They have come back with a counter offer of just over £10,000 but i have had to tell them that we can only come up with £7,000 otherwise we will have to go BR and then they won't get anything! Just need to wait for their response tomorrow.

 

What i really need to know is what sort of percentage the lenders will accept as a settlement figure especially if they realise that we are considering bankruptcy.

 

Thanks,

Chris

[Chris4918]

Have just received a letter in receipt o £8000 i paid in f&f settlement. And my credit file has been cleared. RESULT!!!

[Stressed150]

Congratulations Chris....well done, I am in a similar predicament to you, I am in the process of offering full and final settlement with creditors, have u any advice as to the best step forward? I have been advised to go in and offer 25% of the balances owed, did this work for you? How did u manage to get ur credit file cleared up?

[Chris4918]

I had £42,000 negative equity when my house was reposessed so i made an offer of £7,000 to clear it or i would go bankrupt. We agreed at £8,000 and based on the settlement they would clear my credit file. Although i still have the reposession on my file, it does show that i settled the amount owed in full.

 

In regards to your offer, if it has been bought by a debt collection agency (DCA) then they will always accept less than the original creditor as they buy the debt of them for a lot less. If it hasnt been bought by a DCA then it may be worth waiting for it to go that far first (this only depends on you being in arrears). Keep me posted on how you get on as i have a couple of others in my fainces name pending...

 

Thanks

[Stressed150]

Thanks for that Chris, will keep u posted, I put in an offer to pay 25% off my balance with a DCA, they rejected it this morning, I advised them my only other option is BR, so am waiting for them to get back to me to say they will accept, which no doubt they will!

[Chris4918]

Which DCA is involved?

[meerkatsmimm]

Thats great news Chris, im sure you are both very relieved to have that mortgage company off your back!

[phoenix11]

Hi Chris - well done - it's fantastic to hear of good news.

[Stressed150]

Hi Chris, I'm involved with Hillesden Securites who own my debt (rejected my offer), and CSL who are collecting on behalf of Barclaycard, and also Fredrickson International collecting on behalf of Alliance and Leicester...