Urgent advice needed re offer pay off credit card

[rustyboxx]

I wrote to Lloyds TSB Visa Card Services on 13th March and volunteered a full and final settlement of the balance at a reduced figure to clear the debt. I invited them to consider my offer and write to me with their answer. They did not respond so I wrote a final letter repeating my offer on 23 March giving them until tomorrow (30 March) to repond, agree or refuse the offer stating that I would pay my offer into the account on 30 March as full and final settlement and that if they did not reply by this date then I would deem their lack of response as acceptance of my offer.

 

Anyway, my deadline is tomorrow and before I pay nearly 7 grand into the account to clear a debt of nearly 9 grand, I have a few questions.

 

Am I likely to be off the hook and no longer liable for the remainder of the balance? Are they likely to hound me for the rest of the money despite their lack of any sort of response to my letters?

 

What I don't want to do is bung a load of money into the account and still be liable for the rest.

 

I can post up copies of my letters if anyone wants to check the wording.

[Advoc8]

It's a little complicated. Is the account still operating or is it disputed/closed and are they taking steps to recover the whole amount from you?

 

If the account is still operating as normal I'd suggest that this money would just be accepted as a normal payment, the contract would continue and you'd still owe them £2K.

 

If the latter then the position is that it's effectively the actions of the creditor that determine whether a payment is accepted full and final or not. E.g. if you pay it they can then turn around tomorrow and say "thanks for the £7K, when do we get the next £2K". The longer they leave it before responding to affirm the debt for the rest of the money (this could be something as simple as sending you a statement showing £2000 outstanding) the more the chance that they can be deemed to have accepted it as full and final settlement.

 

In other words unless you have a very strong indication that this payment will be accepted as full/final and that the account will be closed I'd say the bank would still be entitled to go after its money.

[rustyboxx]

Thanks for the quick reply.

 

The account is not in dispute but it is effectively closed. I haven't been that brilliant at paying regular amounts into the account but they have been grabbing £178 a month out of my bank account without my consent.

 

There is no way I can afford to pay the other £2K and without any other means of a reasonable resolution to the situation I thought I'd make good use of some limited funds I recently received and make an offer.

 

As yet they haven't started formal recovery of the full debt. I don't intend to pay any more off it after tomorrow. I suppose they could take me to court but would the judge consider that I gave them fair warning of my terminating the contract?

 

Here are the letters I sent.

 

Cheers.

 

13 March 2007

Dear Sir/Madam

SETTLEMENT OFFER

 

Further to my telephone call to your customer services department on 18th February 2007 and 12th March 2007 regarding settlement of the outstanding balance on my MasterCard, I was advised by the customer services representative to write to your department with my offer of settlement.

I have recently obtained limited funds and intend to use them to address my current debts, one of which relates to the above account.

The outstanding balance on 6th March 2007 was £8973.01. I have calculated that I have been charged £254.00 in late charges, £4395.96 in interest charges and £1822.95 in payment protection cover (PPC) during the life of the account. The total charges levied to date amounts to £6472.91. I have, to date, repaid a total of £7417.79.

I am aware that the late charges levied to my account are unlawful. Should I choose to reclaim these charges, the current value of the claim would be £516.75. Obviously, this would reduce the current outstanding balance to £8534.15. I will agree not to pursue recovery of these unlawful charges if my offer is accepted.

It is clear that were it not for the monies I have recently received I would be unable to address the outstanding debt. Whilst I accept some responsibility for the way in which I have handled my account, I consider that I have been encouraged to some degree by yourselves to increase the debt through periodic raising of the credit limit without having been asked by me to do so.

Therefore, I respectfully ask that you consider my offer of £6700.00 as full and final settlement of the account. I am sure that the figures detailed above demonstrate that this offer together with the total amount paid to date represents a sum significantly greater than the total purchases and cash advances made with the card. Ultimately, the shortfall would represent around £1800.00, a figure more than compensated for by the interest charged and PPC levied on my account.

I am now able to make a substantial offer to finally resolve this matter and ask that you give it your favourable consideration. I cannot raise further funds to clear the debt in its entirety nor will I have any spare income to pay off any residual balance over time. However, I am in a position to provide immediate payment of £6700.00 to settle the account.

I hope that my offer can be agreed with the account being settled and closed as soon as possible and respectfully ask that you respond promptly to avoid further charges being added to the account. Should my offer be accepted, I would be grateful for written confirmation of your acceptance and an undertaking that you will not register a default with the credit reference agencies.

Please feel free to contact me on my mobile number if you wish to discuss this matter.

23 March 2007

Dear Sir/Madam

SETTLEMENT OFFER

 

Further to my letter of 13th March 2007 in which I offered a reduced settlement figure as full and final settlement of the above account, I note that I have not received a response from you other than a letter confirming my cancellation of the direct debit.

I have enclosed a copy of my original letter and remind you that my offer of £6700.00 as full and final settlement of the account still stands despite you having debited £178.00 from my bank account on 13th March.

I am keen to resolve this matter and hereby give notice that I intend to deposit the sum of £6700.00 into my account no. #### on 30th March 2007 as full and final settlement of the account. If I do not receive confirmation from you regarding my offer by 30th March 2007 I will deem this as unconditional acceptance of my proposal.

Following clearance of the deposited funds I would be grateful if you would close the account and confirm to me in writing that this has been done together with confirmation that there are no outstanding monies owed and that a default will not be registered with the credit reference agencies.

I believe that I have taken a responsible attitude and provided an effective and fair solution to resolve this matter. I am disappointed that you have not responded in a timely manner as your delay serves only to inflict an unnecessary increase in the outstanding balance through additional interest and late payment charges.

I trust that this letter further demonstrates my desire to bring about a speedy resolution to this matter and to finally bring an end to our relationship.

To recap, if I do not hear anything from by 30th March 2007 I will consider that my offer and request has been accepted unconditionally and will deposit the sum of £6700.00 as full and final settlement of all outstanding monies related to account no. ####

[Advoc8]

Thanks.

 

Having read the letters I still think that without some clear indication from the bank that the payment will be accepted as full/final settlement and the account closed you run a high risk that the bank will just say 'thanks, where's the rest?'.

 

I think that the bank's silence speaks volumes.

[rustyboxx]

Oh bugger!

 

So what should I do? I'll still get screwed for interest and the debt gets bigger even if I make the minimum payment or deposit a lump sum.

[Advoc8]

Obviously I don't know much about your general financial situation but my inclination would be to pay off what you can so at least there's less interest piling up and a lower monthly minimum payment being taken. I'd then start a claim to get the charges refunded and offset against the remaining balance. I'd also look at whether there's any possibility of a claim for mis-selling of PPI and get that back

 

Any chance of getting a lower interest rate product to switch the remaining debt to so you can at least make a bigger dent in it with what you can afford to pay back?

 

There's also no reason why you can't try to get them to accept the payment as full/final and write off the remaining amount after you've made a payment, especially if you can also make claims for charges and PPI.

[rustyboxx]

Excellent ideas, thank you very much.

 

I think I'll stick to my guns and pay the money in. If they make a drama out of it and insist on the balance being repiad I'll claim the PPI and charges as you suggest. Hopefully that will act as a bargaining tool and they will back down.

 

I think if it ever got to court at least I could demonstrate to a judge that I did my best and stuck to my promise.

 

Thanks again for your time, you've been very helpful.

 

Rusty

[Advoc8]

Hope all goes well, remember to keep all the paperwork! Annoyingly this is a situation where you might have been in a better position if they were trying to obtain the full amount.