Help needed - How likely am I to be able to agree a F&F settlement?

[2schnauzers]

Hi,

I'm a newbie but have been lurking on these boards for ages. I've plucked up the courage to really deal with our debt, and I would very much appreciate some help from the experts here! I've read a lot about the possibility of a reduced full and final settlement, and am very keen to know how likely I am to secure such an agreement with my creditors.

I shall tell you a bit about my situation:

My OH and I have debts totalling about 37k with 5 creditors (Santander loan, Abbey cc, RBS cc, Cap1 cc, M&S cc) which I have managed to keep in pretty good order (only a couple of late payments) despite crucifying interest rates that are now being levied on the debts - until now, that is. I have recently had a baby and been unable to find decent paying work, so I can no longer pay the minimum payments. This month will be the first that I can't make them.

 

I am not one of these people who is looking for an easy way out of debt that I know we have run up ourselves, but I can't see a way out of this without some compromise on the part of the creditors. I have asked my parents for some help, and they are able to offer me some money as a lump sum (probably no more than 60% of what we owe).

 

So, my question is how likely do you think I am in succeeding with an offer like that to my creditors? Will it make a difference that I haven't defaulted on the accounts? I read on one thread that starting down the road of requesting the CCAs etc means they get nasty very quickly, and I'm not looking for a way to run away from the debt, just a way to resolve it to everyone's benefit (does that sound holier-than-thou? It wasn't meant to!)

 

I have been living with this debt hanging over me for probably 10 years, and I just want an end to it. Can anyone offer me some light at the end of the tunnel?!

[locutus]

The flip side of requesting a CCA is that they may not have any paperwork, especially on any older debts, and that puts you in the driving seat with any F&F offers.

 

Failing that, 60% is a very healthy offer. Best of luck.

[2schnauzers]

Thanks for the reply, Locutus.

 

Another question - do you think if I was able to offer them somewhere around that figure (60% ish) that I might be able to insist they mark the debt as fully satisfied (rather than partial or short settlement)? I only ask, not because I want to be able to get credit cards or loans again (never want to have a relationship with these companies again!), but in case we need to remortgage in the future (we're on a variable rate at the mo, after our fixed rate finished, which is fine right now but I suspect will quickly become very uncompetitive as soon as base rates rise).

 

Thanks so much.

[The Mould]

Hello 2Schnauzers

 

Firstly, you need to inform your 5 creditors that you are in financial difficulty, state what your circumstances are and offer them a token payment of £1.00 per month. (if you can afford say £5.00 or £10.00 per month, then offer that amount instead)

 

In your letter to your creditors request that they provide assistance to you by way of accepting your token payment offer for a period of six months and that they also freeze interest and charges on the account for the said period. Ask them to review your account at the end of the six month period with a view to extending this arrangement should your circumstances show no sign of improving.

 

You will need to include a financial statement with your letter, this will show what your income and outgoings are.

 

List your other creditors and the amount outstanding on those accounts, include this list also with your letter.

 

Send a CCA request to all five creditors (£1 fee).

 

Send a Subject Access Request to all five creditors (£10 fee).

 

In your SAR letter, state that you want a comprehensive list of all charges applied to the account, to include the date, the breach relied upon and the amount applied.

 

How old are your accounts/agreements?

 

You could ask your creditors if they would be willing to consider a composition agreement, this would mean that the lump sum that your parents are willing to make available is divided amongst your creditors on a pro-rata basis. This type of Settlement Agreement is particulary good, because if one creditor should accept, then they all must accept.

 

Anyway, try and get those letters sent off first, then we shall take it one step at a time, do not try and rush a Settlement Agreement, I will help you along each stage of the process, it won't happen overnight, so please be patient.

 

Kind Regards

 

The Mould

[2schnauzers]

Thank you very much for your thoughtful and supportive message, The Mould. I should add that there is a complicating factor inasmuch as we are (temporarily) abroad for my husband's work, and the creditors have my parents' address as my UK address. I would really like to avoid my folks being pestered constantly with phone calls and (please god, no) doorstepping. They have been kind enough to offer to help us out - I don't want to put them through that kind of harassment on our behalf. Am I overreacting? It's just that I've read a lot about how unscrupulous these people get as soon as you are in trouble.

Should I give my creditors our foreign address in these letters about my financial difficulty, or is that asking for trouble?

In response to Locutus' question - all the debts are in my (maiden) name and are well over 5 years old - some probably closer to 8 or even 10. (It's so shaming that I can't even remember!)

Is there a template that I should use, or is it better to just write something personal and specific?

thanks again - what a wonderful (virtual) place this is. I'm quite sure you lovely folks have saved many people like me from very dark thoughts indeed.

[2schnauzers]

Hi there,

Any thoughts on the address issue before I write these letters?

Thanks!

[The Mould]

Hello 2schnauzers

 

Do you know if any of your creditors have your parents telephone number?

 

By all means have a good read of the template letters that are available here on CAG, however, I would always advise that you should write your own personal letters to your creditors.

 

I think that you should also inform your creditors that you are attempting to raise funds to clear your debts/accounts by way of assitance from a third party, because you believe that your financial difficulties are going to be long term rather than temporary.

 

You should at all times during correspondence with your creditors be absolutely truthful (no matter how mean or nasty they might become or act towards you). So simply stating the facts of the matter/your circumstances is perfectly alright, inform your creditors that you are not in the United Kingdom at present.

 

What are your parents thoughts regarding delivery of written correspondence to their address?

 

Come back, Roger.

 

Kind Regards

 

The Mould

[The Mould]

By the way doorstep visits are not permitted without a prior agreement to such an appointment.

 

Debt Collection Agencies (DCA's) have no legal rights of entry into your parents home, as a matter of fact, DCA's have no legal right at all to enforce any agreement/contract that may exist between you and your creditors, unless your creditors legally assign the agreement to them or there is novation of the agreement.

 

I understand that you would feel distress at the thought of someone knocking at your parent's home making a demand for payment, but that is not going to happen because CAG will help you to understand your full legal rights and what the DCA's can and cannot do.

 

Kind Regards

 

The Mould

[The Mould]

You will need those CCA's and you also need to see if any charges have been applied to any of your accounts.

 

In Full and Final it is extremely helpful if you can show that there is a genuine dispute on the account.

 

Kind Regards

 

The Mould

[The Mould]

Blimey, I have become 'classic'.

 

Sorry about that 2schnauzers, I just wanted to say that thing about classic.

 

Kind Regards

 

The Mould

 

PS. I drafted a letter on one of the Bank forums regarding Subject Access Request and the comprehensive list (breakdown) of all charges, I will try and remember where it is and then let you know so that you can have a read of it in order to help you draft your own letter.

[2schnauzers]

With regard to correspondence - I think that my parents would be willing to forward mail, but this would obviously increase the time between my creditors sending me something and me being able to respond. Do you think this would matter (I suppose I'm envisaging some 'time limited' offer or them getting annoyed that I hadn't responded quickly enough to some letter or other).

 

I think it's quite likely that at least some of them have my parents' number as I lived there for a period a few years ago (boomerang child!) - though I have tried to update some of them so they have my mobile number instead. My parents aren't ex-directory either, so they would fairly easily be able to get their number, if they were so inclined.

 

I think I could also ask my folks to send the SAR and CCA letters as they will require postal orders won't they? I suppose I don't want them to feel that they are being drawn into my mess more than is absolutely necessary, but then they are offering to raise a lump sum, so they already know it's bad!

 

I'll have a look around for those templates, but then draft my own initial letter. As for income and expenditure - how detailed do I have to be? And are there guidelines for what they are going to consider 'reasonable'?

 

Congrats on the 'Classic' status, The Mould!

[2schnauzers]

Oh, yes, one more thing...how about email? Do creditors in general engage in any of these kind of negotiations via email, or is snail mail the only way? (I've been paying attention to these boards not to phone!)

[The Mould]

OK 2schnauzers

 

Email will be fine, facsimile also.

 

Ask them to allow an extra 7 days in respect of postage as you are out of the country at present.

 

Reasonable? Do you mean reasonable Full and Final Settlement payment?

 

Yes, unfortunately your parents are going to be involved, request that no telephone calls are made to the address that your creditors have on record for you as it is your parents address and you do not want any needless and unnecessary distress caused to your parents.

 

I think 'classic' just means that I have past a certain marker regarding the amount of posting, so nothing special there, but thank you for the congratulations anyway.

 

Kind Regards

 

The Mould

[2schnauzers]

Re: reasonable - I just meant on the income and expenditure list that I'm going to include, is there a guideline on the kind of levels of expenditure that they would happily accept. How detailed a breakdown do you think I need to include?

[dx100uk]

NO

do not send any I/E sheets

NONE of there business

only a judge can demand that!

 

 

now on F&F's

 

if the creditor will not remove ALL negative info on a debt you want to do an F&F on, then its not worth wasting the money

 

they might as well have £1 PCM till you die.

 

a 'settled' account with default or late/missed payment markers is just as bad as a CCJ sadly.

 

so becareful not to waste your money here

 

on those that you do sucessfully manage the above

 

 

i'd then look at reclaiming any unlawful fees [over-limit/late payment] etc etc

 

and any mis-sold PPI AFTER you F&F

 

if they wont remove neg markers - then do the reclaims anyhow

 

dx

site team

[2schnauzers]

Gosh, I'm a bit confused now. In general I'd prefer to avoid defaults on my account if at all possible - even if this means having to pay a bit more in F&F now before I start not being able to make the minimum payments. Or is this silly of me? In an ideal world I'd keep a decent-ish credit record (just in case of needing to remortgage - does anyone know how hard/easy remortgaging is with settlements on your record?) but perhaps that's the proverbial cake and eating scenario, is it?

I'm hoping to get some letters/emails sent off tomorrow (Monday) if possible, so any further thoughts about what my strategy should be?

Probably a stupid question, but if I agree a reduced payment and frozen interest with my creditors will that automatically mean a default on my account?

thanks so much for your help everyone!

[sillygirl1]

There is NO NEED to include a complete list of creditors when you write, it is not legally needed and will only give the companies more ammunition to immediately instigate court action, especially if serveral of your creditors share the same parent company (you would be surprised how many do in your list.... they may seem 'independant' but they are NOT).

 

The same goes if they ask for income and expenditure forms, some companies are now sending out five page documents with incredibly intrusive questions on them, questions even a court of law would not ask in a formal oral examination of your means.

 

Otherwise the general advice is good, write to the creditors and state that you are interested in coming to a deal, and if not they will have to go 'into the pot'

 

As for remortgaging I think there is little chance in the current economic climate, it would only invite more problems, one option is to speak to your lender and ask what options they could give you - they are supposed to behave reasonably if you are on a fixed rate going to variable rate.

[sillygirl1]

The income breakdown can be as simple as

 

Income XXX

Priority debts (coucil tax, mortgage, gas, electricity, water) xxxx

Basic Living expenses (food, fares, lunches at work, clothes upkeep etc xxx

 

Remainder XXX to be divided amongst XXX creditors.

 

You can pro-rata the payments but quite honestly I worked on the basis of 'them what shouts loudest gets least' and sat back, the loudest shouter was one of the first to offer a 'substantial discount' should I wish to settle, ended up settling for a lot less than they claimed originally.... which was the origial amount borrowed x 5!

[2schnauzers]

Okay, so I've contacted them all (in writing!) offering them 40% and explaining in broad outline my situation. I don't expect them to accept that amount, but if they decide to be really sh&%y and refuse any kind of negotiation or reduced monthly payment, then I'll CCA and SAR them and get into all that stuff.

Will let you know how it's going in a couple of days.

thanks for all your help - I feel more capable of dealing with it all now. OH was so unhappy when I revealed the full extent of it. Why do we always feel the need to hide these things from those closest to us?

[The Mould]

There is no need for any confusion on this subject.

 

It stands to reason, that a creditor is going to want to know what the circumstances are for the debtor to be seeking Full and Final.

 

By providing information regarding the reason(s) for Settlement, the creditor will be able to determine debtor type, i.e genuine or attempting to whelsh on the debt.

 

In my opinion, it is far better to reach an agreement to Settle with a marker on your credit file stating 'partial settlement', than to offer a £1 per month for life, because the creditor will take legal action and secure a charge on the debtor's property, providing of course that the credit agreement is in order.

 

The creditor is not obligated to accept Full and Final offers, it depends on each creditor and the set of circumstances that the debtor now finds himself in, the key is, in all correspondence one must be truthful, legally binding Settlement Agreements are reached by way of discussion and negotiation, there are two parties involved, both parties must agree to the Settlement and the terms thereof.

 

Many, many factors involved to these such Agreements/Contracts.

 

Sometimes Settlements are achieved relatively quickly, sometimes it can take months of discussion and sometimes they cannot be achieved.

 

Kind Regards

 

The Mould

[2schnauzers]

So, Cap1 responded to my email asking me to call them. Saying if I don't they can't do anything about freezing interest and charges. Also no mention at all of my F&F offer. No surprise, but I presume the advice would be not to call them, just to write again?

[The Mould]

2schnauzers

 

Write to them, discussion in telephone coversations are practically impossible to prove.

 

Kind Regards

 

The Mould

[2schnauzers]

Quick update: Got responses from Cap1 and Abbey that they would be passing my case on to their 'specialists' - I wonder what exciting news they are going to impart to me? I reiterated that I would only be dealing with them in writing. Cap1 still called my parents this morning. To be expected I suppose. Nothing whatsoever from M&S.

Have also sent a complaint to Santander about the ridiculous interest rate hikes on my flexi loan. Not expecting much from them, but if it comes to it, I might take my complaint to FOS about that as some on these boards seem to have had success arguing the unfairness of those increases.

[2schnauzers]

Okay, so I've heard back from MBNA (Abbey) saying that they cannot consider my offer due to recent transactions on my account. Any idea what this might mean? Is this some standard manoeuvre or have they really looked at what I've used my card for and concluded something from that?

Thoughts?

[dx100uk]

smokescreen me thinks

 

dx