Full and final settlement - secured loan

[Mancs80]

Re: Full and final settlement - secured loan

Someone mentioned a CCJ, this was probably due to confusion because to obtain a charge on a property for an unsecured debt, the creditor would need to obtain a CCJ first, however, as this was a secured loan to start with, the charge would have been recorded with the LR at the start of the loan, a secured loan is like a second mortgage.

Can you not get a personal cheque? With cashiers cheques, you have to pay for them at the counter, they are not drawn from an individual's bank account, so they would only have the name of the payee which defeats the purpose.

Banker's drafts used to be used to send money abroad and it used to be difficult to get them cashed, that was in another millennium though.

Hi,

ah, I think I know where the confusion lies. When you say third party cheque, a personal cheque, you are referring to a friend who would write a personal cheque out to the company? If that's the case I am not sure how to proceed, as I don't really want my friends knowing the state of my finances lol.

i thought that a counter cheque would be classed as a third party cheque, as it doesn't have my name on the signatory bit? Is there another form of cheque I can request from the bank branch?

sorry for all the questions!

[FlamingParrot]

Re: Full and final settlement - secured loan

Hi,

ah, I think I know where the confusion lies. When you say third party cheque, a personal cheque, you are referring to a friend who would write a personal cheque out to the company?

Yes, that's exactly it! You get someone else to make the payment on your behalf, that's what the case I posted above refers to: http://www.e-lawresources.co.uk/Hira...d-v-Temple.php

If that's the case I am not sure how to proceed, as I don't really want my friends knowing the state of my finances lol.

You can ask a relative/partner/sibling, etc. to write the cheque for you without having to explain the full story, which they don't need to know if you offer to pay them back and say this is just for legal purposes. They won't need to know the full story!

i thought that a counter cheque would be classed as a third party cheque, as it doesn't have my name on the signatory bit? Is there another form of cheque I can request from the bank branch?

sorry for all the questions!

The idea is to get a third party to make the payment on your behalf to make it legally binding. I'd say this is particularly important since you are settling a secured loan, you want to make triple sure that they are actually going to remove the charge without asking you for the balance.

Creditors DO that, they've done it with me, albeit for a small amount that I couldn't be bothered with so settled it over the phone. I still get letters asking me for the balance after agreeing to my payment allegedly in full and final, this was probably in 2008!

[seduraed]

Re: Full and final settlement - secured loan

If you have a building society account then ask for a counter cheque. There may be a charge . The nationwide charge £10 but you have third party cheque and the funds are guaranteed to the recipient.

[FlamingParrot]

Re: Full and final settlement - secured loan

If you have a building society account then ask for a counter cheque. There may be a charge . The nationwide charge £10 but you have third party cheque and the funds are guaranteed to the recipient.

The funds are guaranteed, that's not the issue, but the fact that this wouldn't count as a third party cheque for the purposes mentioned above, the bank or building society issuing the cheque do not count as a third party.

[Mancs80]

Re: Full and final settlement - secured loan

The funds are guaranteed, that's not the issue, but the fact that this wouldn't count as a third party cheque for the purposes mentioned above, the bank or building society issuing the cheque do not count as a third party.

Bugger, I thought that may be an easy way to get a cheque. I'll put my thinking hat on!

[seduraed]

Re: Full and final settlement - secured loan

How do you work that out? The chque is drawn against the central fund of the institution in question and is removed from the members account and placed in theirs.

[Mancs80]

Re: Full and final settlement - secured loan

How do you work that out? The chque is drawn against the central fund of the institution in question and is removed from the members account and placed in theirs.

That was what I was thinking, I.e. The cheque is from the banks own account and no reference to my name is on it. I thought that meant it was effectivly a third party cheque, the bank being the third party. I guess it's going to come down to they definition of third party? Hmm, nothing's ever straight forward!

[Mancs80]

Re: Full and final settlement - secured loan

Hmm, I have done some googling and cannot find a definitive answer about whether a bank counter cheque or draft is classed as third party. Anyone have any ideas where I can seek confirmation either way? I have spoken to three friends but non have cheque books anymore and just use cards or bank transfers for everything. Grr.

[FlamingParrot]

Re: Full and final settlement - secured loan

How do you work that out? The chque is drawn against the central fund of the institution in question and is removed from the members account and placed in theirs.

That was what I was thinking, I.e. The cheque is from the banks own account and no reference to my name is on it. I thought that meant it was effectivly a third party cheque, the bank being the third party. I guess it's going to come down to they definition of third party? Hmm, nothing's ever straight forward!

If you look at the case above, the idea is that a third party has offered to settle the debt and, by accepting the payment made by that party, the creditor has entered into an agreement with a party other than the debtor: http://www.dwf.co.uk/news/view-point...nal-settlement

1. Is the cheque from the debtor or a third party? If the cheque is from a third party then accepting it in any event would make a binding agreement between yourself and a third party, meaning that the matter would be considered settled.

Note that this article is from the point of view of the creditor, but has some useful case law.

A bank would not offer to repay your debt with its own funds so it would not be considered a third party as such.

You could get a third party to make a payment via bank transfer instead of cheque, however, in this case you would need to get explicit agreement from the creditor in writing prior to making the transfer. This is because a cheque demands action on the part of the creditor, i.e. they need to pay into their bank account, this doesn't happen automatically, thus it could be argued that, by banking the cheque, they have agreed to the settlement. With a transfer or any form of electronic payment, the creditor doesn't have to actively do anything so this element of acceptance wouldn't be there, however if there was previous written agreement to a transfer from Mr X (your third party) who is generously offering to settle your debt, to be considered as full and final settlement, you'd be better covered. If you look around, you will notice how F&Fs are not exactly clear cut. If the amount being settled is large, you could do worse than getting a solicitor involved.

[wales01man]

Re: Full and final settlement - secured loan

I have followed this post from the start its all a bit hit and miss I think the OP needs an agreement drawn up legally stating the offer and what they expect the from the Creditor I:e the default removed from the records and would need to be from a Solicitor Best Safe than Sorry Methinks

[FlamingParrot]

Re: Full and final settlement - secured loan

I have followed this post from the start its all a bit hit and miss I think the OP needs an agreement drawn up legally stating the offer and what they expect the from the Creditor I:e the default removed from the records and would need to be from a Solicitor Best Safe than Sorry Methinks

I agree with that, especially if the amount is substantial, hence my bringing it up on my post above, however, the default is unlikely to be removed, they are usually just marked 'satisfied' or 'settled'. More significant would be to ensure the charge on the property gets removed, otherwise the whole thing would be pointless. :scared: :scared:

My main concern is that they want payment to be sent to themselves rather than directly to a Welcome Finance. Is this safe? Do they need to have had the debt assigned to themselves for this to be legit?

Emphingham seem to be intermediaries rather than debt purchasers, I'd be wary, if you haven't got a NoA.

also, no mention of removing the legal land registry charge has been made, I will of course asked for confirmation that this is the case.

This is paramount!

Hi, thanks for reply.

How would you suggest dealing with this? What would you do if you were in my position?

many thanks

I would probably run it past a solicitor just to be on the safe side, even if you have to pay, it may well be money well spent. Both Celestine and PT2537 work for a law firm, you may want to get in touch with them. :thumb:

[Mancs80]

Re: Full and final settlement - secured loan

Thanks again for the help everyone.

How much do you think a solicitor would charge for such an agreement? I presume the money would also be transacted via them from the client account etc?

money is very tight but I am determined to clear my debt, hence the full and final. I don't have much spare for legal fees, in hindsite I should have maybe built in some contingency for legal fees.

fyi, the f&f sum is £5k on a £20k debt.

thanks

[wales01man]

Re: Full and final settlement - secured loan

Others will advise on the figures have they agreed to your settlement offer

[Mancs80]

Re: Full and final settlement - secured loan

Others will advise on the figures have they agreed to your settlement offer

Hi,

Yes, Empingham (the intermediaries) accepted the offer, but I have also now recieved a letter directly from Welcome Finance Head Office confirming that they accept the full and final figure BUT they failed to mention clearing the charge on the property or updating credit files.

Looking at the date of their letter, they sent this before they would have recieved my letter asking for the above points to be confirmed. I will give them until Wednesday before I chase.

[Mancs80]

Re: Full and final settlement - secured loan

Hello All,

update for you.... Letter received from Welcome Finance, wording is:





On Welcome Letter head.


"Dear XX


I write in reference to your correspondence dated 07/04/14 requesting information about the above account.


The agreed short settlement amount is xxxx


On receipt of cleared funds totalling the amount stated in this letter and within the specified time, we agree to remove our charge on the secured property. Please allow ten working days for funds clearance upon which discharge papers will be sent directly to HM land registry.


All defaults and markers will be cleared from your credit files.


The debt will be deemed permanently settled and no further collection activity will take place, either by Welcome Finance, it's subsidiaries or any debt collection agency.


If required, our bank details are:




Xxxxx


Xxxxx


Yours faithfully,


XX


On behalf of Welcome Financial Services Ltd."





do you agree with me, that the above letter is satisfactory?

kind regards,