Settlement offers

[winnie-uk]

Not sure if this is right place.

I decided to try and go for settlement with my creditor in regards to my debt.
What would be good ideas to "present" as why i dont want to pay full amount? Obviously because i cannot, but what else can i put down as reason?
What would be good catch for my creditor to go for my offer?

[Sapphire]

Re: Settlement offers

Hiya

The best thing you can do is tell the truth, ie: hours cut at work.

Write an outline letter in here and we'll all jump in and give an opinion and give you a hand.

[winnie-uk]

Re: Settlement offers

I got letter ready - just need to say why i cant pay my debt in full. I owe rent monies to my previous landlord (commercial premises). So far only ide is that i have to close my company since its not making any monies anymore.

Dear Sir or Madam,
Re: XXXX

The Creditor and Debtors agree that the current outstanding debt is ____________. Creditor agrees to accept less than the full amount of the debt, provided that Debtors makes payment on or before ___ / ____ _/ ______ . Both parties agree that the Creditor will accept a cash payment of ______________ towards the settlement of the debt in full.
If the Debtor fails to send in the amount agreed by _____ /_ ____ / ______, the Creditor shall immediately demand the payment of the original amount owed by the Debtor.
This agreement for debt settlement shall be binding upon the Creditor, Debtors, and their successors and assignees.

Dated: _____ / _____ / ______

[Sapphire]

Re: Settlement offers

Quick question is the company Limited or are you a sole trader ?

How about

Dear Sir/Madam

Re: Your Account Number: xxxxxxxxxxxxxxxxxxxxxxxx

We write with reference to the above mentioned account number.

We confirm that we are unable to offer the full amount repayable, we are, however, able to raise a total of £................. and wish to offer this as an ex-gratia payment in full and final settlement of the above account.

I am making this offer as due to the recession, I am unable to keep my business trading, therefore this now leaves me with limited funds and I am now unable to meet my commitments.

This offer is made on the clear understanding that, if accepted, neither you nor any associated company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released from any liability.

We also request that, if accepted, you inform the relevant credit reference agency and mark our file relating to the above account as "satisfied”.

Payment can be made within 2 weeks (you put the time scale) of receiving your written acceptance of these proposals.

We look forward to receiving your reply.

Yours faithfully/sincerely

[winnie-uk]

Re: Settlement offers

Thank you, very nice letter

[bladerubber]

Re: Settlement offers

You prob already know this but if you have not already provided them with one; You will need to provide a breakdown of your personal survival budget to clearly illustrate why you cannot pay. Sometimes people cite health factors as this is something that can affect the financial landscape and is a great detriment to you (e.g. on medication for anxiety and depression etc) I would assume one of the main things your creditors will be interested in is also the Likelyhood of your financial scenario changing, so for e.g. if you have only recently closed your business and are now seeking employment they may be disiclined to accept f&f settlment until they are satisfied your finances are unlikely to improve. This is one of the factors when looking into a debt relief order also.
I would also imagine they will want to see what (if any) assets there will be from the business combined with your own, as without this they cannot properly asses your financial scenario.
As sapphire says-I really do think that being upfront and honest is the only way to go as at some stage you may have no choice anyway (DROs being one)
Hope this is some use.
My advice is based on my limited experiences... which have yet to be concluded,:doggieyes: nothing more.

[FlamingParrot]

Re: Settlement offers

Not sure if this is right place.

I decided to try and go for settlement with my creditor in regards to my debt.
What would be good ideas to "present" as why i dont want to pay full amount? Obviously because i cannot, but what else can i put down as reason?

• What would be good catch for my creditor to go for my offer?

• The fact that your circumstances are not likely to change anytime soon
• The fact that, should they not accept your settlement offer, all they could get is £1/pcm, even if they took you to court!
• The fact that you haven't got many assets and you may consider BR which would wipe off the debt and leave them with nothing
• If the debt has been sold to a debt purchaser, they probably paid 10p in the pound or less, so even a low settlement would make them a profit
• You could say you have a lump sum available to you at the moment but it will not be there forever and you have other creditors who may accept an offer from you and they would be missing their chance if they don't accept your offer.

You need to make sure that if they accept it, it really is a full and final settlement of the debt and they won't pursue it for the rest or sell it to another debt purchaser who will chase you for it. That does happen quite often, happened to me with a small debt where I accepted their offer to settle for 1/3rd of the amount claimed by the DCA, paid over the phone by debit card, then got letters saying I had 'dishonoured' the agreement. I just ignored them and they eventually gave up but it's best to cover yourself against that possibility. There are ways to minimize the chances of them pursuing you for the rest, do post up here if you think you are reaching a stage where your offer is about to be accepted. If you have other debts, it may be an idea to show you are being fair and making a pro-rata offer to all of them.