Offering full and finals to creditors

[tagal]

Hi, wonder anyone knowledgeable can offer some advise.

 

We have been in a DMP with Payplan for 6 months but having a bit of a rough time with creditors one is going for a C.O other is threatning. This has made me ill and I can't really cope this way.

 

So we have applied to remortage which is at the moment going through. We owe 71,000 and are able to borrow 50,000 and we will be paying the same out as we are paying now with old mortgage and payments to Payplan. So we wish to clear our debts and start again.

 

I understood that it would be possible to offer F&F to creditors which would be in our case 70%. Payplan seem to tell us that this won't be enough for F&F and they would need to offer whole amount. Or they could offer short settlement of 75-85%, but we only have 70%. I don't really understand this atall. I thought I had read that we could offer F&F for less than whole amount, and creditors may accept.

 

So should we go this alone and contact creditors and offer them all 70%, what if, say 5 out of the 10 accept. Do we pay them and then re-negoitiate with others. We need to clear the total debt. I understand you should do this through a third party and we hope that Payplan may be able to help us, if not we will have to do it ourselves I guess. But would appreciate some advise.

[tagal]

Sorry, one more thing. A bank is one of our creditors whom we are paying a monthly amount through Payplan. I don't think we should offer to settle the debt yet as the account is in dispute and is being looked at by the Ombudsman to claim back charges which would completely clear debt. Payplan say we have to treat them the same as other creditors which I understand. But they owe me 10 times the amount I owe them, so seems unfair we have to offer to clear debt when a refund of charges would clear it. What do you think. Thanks X

[sequenci]

We have been in a DMP with Payplan for 6 months but having a bit of a rough time with creditors one is going for a C.O other is threatning. This has made me ill and I can't really cope this way.

have you challenged the creditors and their agreements via sending them a CCA request, do this urgently. Has anyone obtained a CCJ against you yet?

So we have applied to remortage which is at the moment going through. We owe 71,000 and are able to borrow 50,000 and we will be paying the same out as we are paying now with old mortgage and payments to Payplan. So we wish to clear our debts and start again.

You're not starting again, you will be turning unsecured debt until secured debt, this means if you get into problems again you will be at risk of losing your property. Also you will be paying interest on the loan, how long is it over?

I understood that it would be possible to offer F&F to creditors which would be in our case 70%. Payplan seem to tell us that this won't be enough for F&F and they would need to offer whole amount. Or they could offer short settlement of 75-85%, but we only have 70%. I don't really understand this atall. I thought I had read that we could offer F&F for less than whole amount, and creditors may accept.

go in at a low amount, say 50% you can alway increase it, some may accept the lower amount, are the creditors the original lenders or have they been passed to debt collection agencies?

 

So should we go this alone and contact creditors and offer them all 70%, what if, say 5 out of the 10 accept. Do we pay them and then re-negoitiate with others. We need to clear the total debt. I understand you should do this through a third party and we hope that Payplan may be able to help us, if not we will have to do it ourselves I guess. But would appreciate some advise.

 

settling some of them would reduce your overall debt level. have a look at this fact-sheet for a bit more help

 

National Debtline England & Wales | Debt Advice | Factsheet 24 Full And Final Settlement Offers

[alexteh]

We did exactly what you're thinking of doing a few years ago and got ourselves into a world of crap when the interest rates started going up and we ended up selling the house (at a small loss) and moving back into rented accomodation. What I recommend is that you start reading up and start sending out the CCA letters as well as SAR's to all of your (alleged) creditors - find out if any of the others owe you back illegal charges (mortgage companies, loan companies, credit card companies, etc) and then look to see if they actually hold valid Credit Agreements for the debt.

 

If you are not too far down the line already, I would very strongly advise against converting unsecured debt into secured debt! I know I speak from experience and if I'd known about the CAG when I did it I would be in a much better situation today as a result.

 

As for offering full and finals to the creditors - make sure they can PROVE that you owe the debt first!

[sequenci]

wise advice there

[rory32]

I would advise that you go down the CCA route before making full and final settlements. How low were the payments you have been making over the last 6 months? Were you making reduced payments before the DMP?

 

I agree that you should make a low offer as full and final. However, if you have been on reduced payments for some time (and they are significantly reduced payments) I would suggest an initial offer of full and final of around 10% and let them work you up to between 20 & 30%. This way they feel they have got a better deal than they actually have.

 

Are the debts in joint names or in individual names?

[alexteh]

I just wish I'd taken it myself - only now starting to slowly dig myself out of a hole and sent of some SAR's and a claim for bank charges in the last few weeks. I will be blitzing my entire creditor estate (and believe me, there are a lot!) over the next few weeks/months

[dx100uk]

good luck

you have a talented team here helping you already.

 

i cannot concur more strongly with this point about changing unsecured loans in secured ones............DON'T DO IT!.

 

another point to bear-in-mind is that there is no such thing as a full & final settlement in uk credit law.

 

it still keeps the marker on your CRA there for 6yrs as it is typically tagged as 'settled' which in many eyes is as good as a default.

 

i would attach strict conditions to any F&F you make. i'e ALL ref to the debt be totally removed from CRA files & neither the original debtor nor any subsidury can ever claim the [still] outstanding balance.

 

there is somewhere on here [debt collectors forum?] a set of letter templates, in this are several pleading letters asking that the debt be written off. try that first.

 

any how

 

good luck

 

dx100uk

[diskmandave]

I just wish I'd taken it myself - only now starting to slowly dig myself out of a hole and sent of some S.A.R - (Subject Access Request)'s and a claim for bank charges in the last few weeks. I will be blitzing my entire creditor estate (and believe me, there are a lot!) over the next few weeks/months

 

Good for you alexteh , i've a funny feeling that you'll be finding a lot of charges to claim back in the coming months and bringing that horrible big nasty figure down somewhat!

 

Now that you seem to have got to grips with the S.A.R - (Subject Access Request), here's the CCA request letter;

http://www.consumeractiongroup.co.uk/forum/general-debt/20758-creditors-dcas-letter-templates.html#post162367

Amend to suit your personal and creditor details etc and send by first class signed for along with a £1 postal order. Once you have a delivery date from Royal Mail Tracking they have 12 working days from the day after delivery to supply a copy of the original agreement after which a default occurs and the account cannot be enforced in or out of Court, after a calendar month in default a summary criminal offence is committed which is reportable to Trading Standards.

 

Trading Standards are a great reference to have to hand, you can find your local office here;

Trading Standards Central - Trading Standards and Consumer Protection information for the UK

 

Also, if I may say, as no-one has. If Payplan isn't working for you. Have you looked at the Consumer Credit Counselling Service (CCCS) ?

CCCS - Free Debt Advice from the UK's Leading Debt Charity

 

Good luck & best wishes! You're in the right place now!!

 

Regards, Dave.