Full & Final Settlement offer advice on how to clear asap

[sequenci]

I'll be able to expand further once I'm home but it might be worth looking at Willams v Roffey (possibly relevant - trying to recollect!)

 

edit: Williams v Roffey doesn't apply to part-payment of a debt.

[nodefaults2010]

Hi BD,

 

I am not quoting "irrelevant generalities and acadaemic dicussion on the finer points of law", on the contrary, the points I raise are all very valid and relevant. If you don't know the answer then just say "I don't know the answer"!! No shame in that, but don't present what I am saying as (i) advice to panther to intitiate court action or (ii) idiotic and also please don't post as if the strategy you outline is the only one out there. I am very happy for you (genuinely) that you have had success with your debts.

 

For the record, I have had success with having all of my debts (nearly £100k total with numerous creditors) paid off by 3rd party cheque and have had no creditor come after me in any meaningful way despite paying them in this way quite some time ago. Nor do I expect them to, they are perfectly aware of the error of their ways and where it leaves them legally. I won't go into further detail by showing all of the replies from the various creditors but these serve to illustrate my claim here, suffice to say as does their failure to pursue me after such a long period of time. I have even had a number of the entries at the CRAs deleted.

 

Further, the amounts paid have been a fraction (i.e. significantly less than 35-50%) of the amount claimed by them. So I have been extremely successful with my own approach. I don't however claim that this gives me authority to dictate what is the best approach to all on this site nor do I feel that means I have to stop exploring further options or areas of law that relate to my issues.

 

Panther can do whatever he/she wants and doing nothing at this juncture is certainly a very good and workable option but I don't see at all why this has to kill a discussion on where such situations leave one in legally and what options are available to all.

[nodefaults2010]

thanks sequenci, any further info, links to case law, etc. is much appreciated

[sequenci]

I may have quoted the wrong case! I'll dig out my stuff once I'm home, there is certainly a fair amount of stuff re: contracts, obligations and third-parties. It's been a while since I looked at it!

[victoria_siempre]

Hi nodef

 

I did not intend to argue against argument and fully agree with testing the logic and practice of law.

 

x

 

v

[nodefaults2010]

well my apologies sequenci but also thanks! Appreciate you looking into this.

 

and Victoria, totally agreed, argument is good if it highlights any useful issues! If nothing else, it may simply back up BD's argument about it being best to sit back and let the (ex) creditors chase. I don't necessarily dispute this but just feel it is in everyone's favour if we can thoroughly scrutinise the rationale and relevant tenets of law.

[the_shadow]

I dug out all my contract law books last night and will spend a few days trying to re-learn it all! I cannot believe how rusty I've become in a few years.

 

haha I think you've forgotten more than I ever learnt

 

S.

[sequenci]

haha I think you've forgotten more than I ever learnt

 

S.

 

Oh it's all in there somewhere, it's just that my recent work has been far, far away from contracts. I love contract law so any excuse to read it all again is welcomed (yeah, I'm a geek)

[nodefaults2010]

whilst waiting for sequenci's feedback on the questions I raised, does anyone else out there have specific answers to any of these points? thanks

[sequenci]

whilst waiting for sequenci's feedback on the questions I raised, does anyone else out there have specific answers to any of these points? thanks

 

The more people with a view the merrier on this one for sure!

[sequenci]

Ok - Re: The Contracts (Rights of Third Parties) Act 1999 allows for a third-party to enforce a contract that was made for the benefit of the third party, so long as two conditions are satisfied:

 

- either the contract expressly provides that the party can enforce the contract

or

- the contract purports to confer a benefit on that third-party

 

Section 6 of the act does make clear that it cannot be applied to a bill of exchange or a promissory note or any other negotiable instrument.

[Bigdebtor]

S Can you please elaborate (or simplify your answer) to explain how this affects situations like Panther's? BD

[Bigdebtor]

Nodef I don't think we're now actually too far apart - given the further clarification/modification you have made to your earlier post. I therefore suggest we agree to differ on the merits or otherwise of an LIP rising being a claimant. I am pleased you acheived the very low % F&F's mentioned. I based my acceptances of 35-50% on what I felt I was still morally obliged to settle for, based on a recalculated outstanding balance due after removal of all unfair charges and modification of interest rates to a more equitable figure. I was not simply wanting to settle for as little as possible where I had been treated resaonably by the OC - as I agree with CAG we shouild not be advocating debt avoidance universally. However the remaining creditors (all DCA's now) will have a big fight on their hands to get another penny - as they are NOT treating me reasonably - and my views have hardended considerably over the last few years given teh continued profiogacy of the big banks and their persistent bonus cultures, while writing off a further £1500 per UK family (£40 billion) since the 2007/2008 rescues of Northern Rock, RBS, BBS and HBOS etc. BD. PS - I am away from home this week and using a Public library PC - which does not seem to punctuate my posts correctly. Apologies for any difficulty in reading them.

[nodefaults2010]

Sequenci - is there a clear legal definition (either statute or case law) that defines a loan or credit card as a bill of exchange or a promissory note or any other negotiable instrument? If so where is this?

 

Or are you referring to the fact that a cheque was used in the full and final settlement? If the latter, then I query how it applies as the contract in question relates to a credit card or loan debt. Not to a cheque. The contract terms were contained and verified in the letter accompanying the cheque, whilst the cheque was used to make payment (to give consideration to the creditor for accepting part payment of the alleged debt as full and final settlement) as per the terms of the contract, not as a contract in itself.

 

By cashing the cheque and by not rejecting the payment and contract offer in sufficient time, the creditor demonstrated by its conduct that the contract was accepted and binding. By then failing to honour this contract, the creditor has created a situation whereby the third party is to have a right to enforce a term of the contract.

 

This may be incorrect logic (if indeed the exclusion noted above does in fact apply to 3rd party settlement by cheque) or untested. Do you know if it is explicitly stated or demonstrated that the exclusion does relate to a contract in which payment is made by a cheque rather than the cheque itself being the contract? In my view, the exclusion applies or is intended to apply to a contract that dictates funds should be transferred from one party to another. Not to a contract that sets out terms but then uses a cheques merely as a method to transfer payment (i.e. confer consideration from the promisee to the promissor).

 

With a cheque there are three parties - the person holding the bank account who gives the cheque (the drawer), the party the cheque is made out to (the payee) and the drawer's bank which promises to pay the money to the payee (the drawee). I believe the Act may in fact have been intending to exclude the drawee from enforcing a right under this Act, as a cheque is generally used as a contractual payment between the payer and payee.

 

I appreciate that it could be argued that as the cheque is referred to in the letter and as the acceptance of full and final settlement is partly contingent upon the cheque not being cashed and returned, that the Act may then be viewed as applicable but is there anything that clearly and beyond doubt illustrates this?

 

Anyone have any thoughts on this?

[nodefaults2010]

BD - like I said, very happy that you have found success with your efforts to settle your issues. On the note of moral obligation, I will be honest and state that part of me would of course like to pay as little as possible but despite that I do have a (I believe at least!) fairly high moral code too and was quite prepared for a very long time to pay what I saw as a fair amount.

 

However the credit companies generally do not, in my experience, have any such moral code and any attempts on my part to reach a genuine agreement prior to my final approach merely resulted in them attempting to completely screw me irrespective of the end results for me or for my family. I therefore have very little sympathy for them and know for a fact that they play a numbers game that involves squeezing the most that they can from each consumer.

 

Anyway, best of luck with resolving your remaining issues.

[sequenci]

BD: Will do! I think I need to set aside a few hours so get a really decent understanding as there are various factors that need to be taken into consideration. The Meeting of minds aspect, the 3rd party aspect + privity of contract aspect, the actual F&F settlement + consideration aspect. I hope some others can give their learned opinions too!

[sequenci]

No Defaults: I was quoting Section 6 of the contracts (rights of third parties) act. I think I was referring more to the cheque rather than the other stuff, but now you've mentioned it - it's really interesting.

[sequenci]

I took a look at this last night again.

 

It was held in Welby v Drake that part-payment of a debt via a third-party would be contractually binding. I think Bracken v Billinghurst has already been quoted as the leading modern authority; not only was the payment made via a third-party - it was paid by cheque.

 

So, I'm pretty sure that as long as the traditional process of making a contract (e.g. offer + acceptance of that offer based upon clear and unequivocal terms) is followed there can be no arguments.

[IainHL]

Hello there NoDefaults. I would be very interested to hear about the approach you took with your 3rd party F&F settlements. Was it directly with the OC or a DCA? What sort of percentage of the balance did you offer? Was it in response to an offer from them to consider a short settlement, or did you just take it upon yourself to send it to them? Did they all fall for it and accept your 3rd party cheques or did some reject your attempt to settle? If so how did you then proceed? Having fallen for it did they then mark your records at the CRAs as settled, or did you have to fight to get them to do that?

 

My position is that I have a number of credit cards where the companies have been unable to provide a compliant agreement. Therefore at the moment they are not receiving any more money from me. (This was after a number of years on a DMP making reduced payments, the current outstanding balances being, I am sure, less than the interest added.) I was quite prepared to sit it out for 6 years till they all became statue barred (I'm currently at 2 years 4 months), however however due to other circumstances it behoves me to try and get as many as possible of these to an agreed write-off or (partially) setted position in the next 9 months or so.

Edited August 25, 2011 by IainHL
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[Bigdebtor]

No defaults. I agree with both your recent posts. I too have changed my views - especially in dealing with DCA's - now very similar to your own. I shall resist every attempt by them to extract any more of my hard earned cash from me - other than the token payments currently in place. Incidentally please put a note in your diary to come to my FREE FROM DEBT party to be held in approximately 1980 months' time when the last monthly £5 will have been paid over!. There will be a valet on hand to park zimmers and a creche for carers! Besty of luck! BD

[horsemad1]

Crikey, I see my thread has grown legs since i last posted !!! Well looking for a bit of help again really. One of my largest debts which was settled by F&F has resurrected itself over 12 months later in the form AIC whom I believe are a particularly nasty bunch. I got a telephone call out of the blue from them about 3 weeks ago to which i sent my scanned copy letters of F&F with cheq. etc. and they have written back today to say they have been in contact with their client and a F&F has never been agreed between their client or their previous agent and have produced a copy of a letter form the previous DCA to whom i did the F&F which is dated 19th may 2010 (2 days after my F&F letter) declining my F&F saying it would instead be used as an installment !!!! Firstly I received no such letter last year and secondly this is the first contact about this in over 12 months.

 

legally i think i am on firm ground, given that The Mould & 4 different Solicitors said the contract was formed on banking the cheque and that there is no legal contract between us now, however, the fact this has resurfaced along with this letter and maybe thrown a curveball into the equation has got me a bit unsure as to what to do> i will ask for a proof of delivery for this letter because that is the only way they can prove I received it and for me to prove it hasn't just been written now and backdated, but how should i reply to AIC. I remember Mould speaking to them last year over another F&F on my behalf and they were extremely rude, aggressive and downright obnoxious so I do not want to let this just lie. Any suggestions?

[Wanting Out]

I did some full and final offers that worked well - I only paid 10% of a £12k alleged debt to one. In fact I only paid £2,300 out of the £53k they were asking. I wrote the book after using this great site and realising it would help others if I pulled it all together. You can buy the book (How I Got out of Debt by Playing the Banks at their Own Game by Linda Franklin on my website and there are template letters there to help in other situations. Good luck! Linda

[panther12]

Crikey, I see my thread has grown legs since i last posted !!! Well looking for a bit of help again really. One of my largest debts which was settled by F&F has resurrected itself over 12 months later in the form AIC whom I believe are a particularly nasty bunch. I got a telephone call out of the blue from them about 3 weeks ago to which i sent my scanned copy letters of F&F with cheq. etc. and they have written back today to say they have been in contact with their client and a F&F has never been agreed between their client or their previous agent and have produced a copy of a letter form the previous DCA to whom i did the F&F which is dated 19th may 2010 (2 days after my F&F letter) declining my F&F saying it would instead be used as an installment !!!! Firstly I received no such letter last year and secondly this is the first contact about this in over 12 months.

 

legally i think i am on firm ground, given that The Mould & 4 different Solicitors said the contract was formed on banking the cheque and that there is no legal contract between us now, however, the fact this has resurfaced along with this letter and maybe thrown a curveball into the equation has got me a bit unsure as to what to do> i will ask for a proof of delivery for this letter because that is the only way they can prove I received it and for me to prove it hasn't just been written now and backdated, but how should i reply to AIC. I remember Mould speaking to them last year over another F&F on my behalf and they were extremely rude, aggressive and downright obnoxious so I do not want to let this just lie. Any suggestions?

 

It does seem a bit of a coincidence that over a year later and a new DCA can now produce a letter said to have been sent from the previous DCA just 2 days after cashing the F&F. If that’s the case then why did it take a year for them to do anything more about it. Does the letter look kosher from the previous DCA (compare the style & format against previous letters received from them).

[Wanting Out]

If you can show you've paid a F&F it is unfair practice for anyone else to be demanding payment. You should write to them reminding them of this and evidencing your full and final payment and threatening to tell the OFT this is unfair practice.

[nodefaults2010]

Hi Iain - settlement was made in all but one of my cases with the OC, only one DCA. I won't quote the exact percentage but it was small (well below 10% in each case). Most of them had at some point made an offer to consider short settlement but had not made a specific offer that was taken up and tied in to the full and final settlement that was made in the end.

 

There were several rejections and in one case it was rejected but then accepted when a 3rd party cheque and accompanying letter with the terms laid out by the 3rd party were resent shortly after the initial rejection. Some of the OCs have correctly recognised now after a significant amount of post-settlement correspondence that the debt is fully and finally settled and have amended the corresponding entry at the DCA. Some have marked the debt as settled at the DCA but have not removed the default markers and some are still being battled and do not recognise it as of yet.

 

It is important to note that whilst my credit file is still not in great shape (because of course even one default marker is a virtual death knell to a credit record or at least entails that any credit granted will be on very punitive terms), it is much better than before reaching full and final settlements with my former creditors and most importantly, none of then have sought to chase me in court or in any other meaningful way. I very strongly believe that if they had any grounds at all to do so then they would have by now.

 

Although in a worse case scenario I might have to wait a few more years for a clean credit record again, I feel much happier now that the debts are settled and that I cannot be legally forced to make any more payments. I am looking into the ins and outs of having the creditors recognise these settlements fully and in line with the agreed terms so that I can have my credit file cleaned more quickly but the main benefit is that I don't have to stress anymore about debts owed. As a final point, you mention partial settlement - I would not bother with that and go for full and final settlement if I were you, to avoid any possibility that they or any DCAs they pass it on to may chase you in the future for any remaining balance. Good luck with it all.

 

Hello there NoDefaults. I would be very interested to hear about the approach you took with your 3rd party F&F settlements. Was it directly with the OC or a DCA? What sort of percentage of the balance did you offer? Was it in response to an offer from them to consider a short settlement, or did you just take it upon yourself to send it to them? Did they all fall for it and accept your 3rd party cheques or did some reject your attempt to settle? If so how did you then proceed? Having fallen for it did they then mark your records at the CRAs as settled, or did you have to fight to get them to do that?

 

My position is that I have a number of credit cards where the companies have been unable to provide a compliant agreement. Therefore at the moment they are not receiving any more money from me. (This was after a number of years on a DMP making reduced payments, the current outstanding balances being, I am sure, less than the interest added.) I was quite prepared to sit it out for 6 years till they all became statue barred (I'm currently at 2 years 4 months), however however due to other circumstances it behoves me to try and get as many as possible of these to an agreed write-off or (partially) setted position in the next 9 months or so.