F&F Settlement Help

[Saint2K]

Hello.

Quick question.

I am making F&F offers to some creditors. These debts no longer appear on CRA records due to their age.

In the F&F letter, it asks the creditor to mark the debt as satisfied/settled and the account closed.

Am I asking for trouble by including this on the F&F letter if the account no longer shows anyway?

As in, would it make a reappearance if the original creditor was to update their records? I don't want to damage my credit rating which is now much repaired and better.

[FlamingParrot]

Re: F&F Settlement Help

Hello and welcome

I am making F&F offers to some creditors. These debts no longer appear on CRA records due to their age.

Before going any further, have you been paying these creditors? Because if you haven't paid in 6 years or more the debts would be statute barred and there would be no need to settle them.

In the F&F letter, it asks the creditor to mark the debt as satisfied/settled and the account closed.

Am I asking for trouble by including this on the F&F letter if the account no longer shows anyway?

Template letters are exactly that: templates. They need to be edited to suit your circumstances. If the debts are not on your credit file, you can just delete that paragraph.

would it make a reappearance if the original creditor was to update their records? I don't want to damage my credit rating which is now much repaired and better.

No, you can only be defaulted ONCE for each account, and the default only stays for 6 years on file, once they drop off they cannot be re-instated.

Having said that, other than the above with regards to last payment dates and the possibility of them being statute barred, there are other considerations you need to take into account when looking to make F&F offers. The most important thing is to ensure you cannot be pursued for the unpaid balance, that does happen, it happened to me.

[FlamingParrot]

Re: F&F Settlement Help

I would suggest looking at this thread with regards to F&F settlements: http://www.legalbeagles.info/forums/...stions-success

[Saint2K]

Re: F&F Settlement Help

I would suggest looking at this thread with regards to F&F settlements: http://www.legalbeagles.info/forums/...stions-success

Thanks for the reply.

Yes, these creditors have been repaid now for a period of nearly nine years, all original defaults relating to these debts appear to have disappeared as expected after six years elapsed, as far as I can tell, no record of these debts show on my CRA records.

All these debts are pre 2007 and I am aware of the CCA guidance and positioning, however that doesn't necessarily mean that I don't want to still F&F these debts as opposed to fight them based on unenforceable CCA.

All the F&F offers that maybe made will be paid by a family member (third party) so am I right in thinking this makes the agreement legally binding if they accept a cheque from the family member in clear understanding it is in F&F of the balance?

[nemesis45]

Re: F&F Settlement Help

If you or any 3rd party makes a payment " in full & final payment" of a debt WITHOUT getting written agreement from the creditor, they can apply the credit to the account and then pursue the balance.

This has happened many time over the years and the 3rd party payment being automatically accepted appears to have be come an " urban myth".

Such an offer should be made conditional on the following matters.

1. The offer is made on condition that the remaining balance is not to be sold or assigned for collection to any 3rd party.
2.Credit reference files should be amended to show that the debt has been settled as opposed to satisfied.
3. The payment will be made within 7 days of receiving the creditors written agreement to the terms of the offer.
Without this you will almost certainly waste the money.:santa_cheesy:

[Saint2K]

Re: F&F Settlement Help

If you or any 3rd party makes a payment " in full & final payment" of a debt WITHOUT getting written agreement from the creditor, they can apply the credit to the account and then pursue the balance.

This has happened many time over the years and the 3rd party payment being automatically accepted appears to have be come an " urban myth".

Such an offer should be made conditional on the following matters.

1. The offer is made on condition that the remaining balance is not to be sold or assigned for collection to any 3rd party.
2.Credit reference files should be amended to show that the debt has been settled as opposed to satisfied.
3. The payment will be made within 7 days of receiving the creditors written agreement to the terms of the offer.
Without this you will almost certainly waste the money.:santa_cheesy:

Thanks for the reply, I have no intention of just sending a payment in expectation of F&F.

I have a properly drafted F&F letter with those terms above plus others ready to send.

However as mentioned there are no defaults or other CRA data on my records relating to these creditors any more, so I am questioning whether including the term to have my CRA updated is actually counter productive, as there is nothing to update, the default(s) and debt dropped off my CRA a couple of years ago.

Appreciate the help.

[nemesis45]

Re: F&F Settlement Help

If the debts have been removed from CRA files after the 6 years has elapsed from the default date (paid) or not) why are you intending to make any payment, if no payments or acknowledgments of these debts has been made in the 6 year period then they are statute barred.
The creditors could still attempt to chase the debts, but they cannot be enforced, all you would need to do is inform any party chasing the debts that the debt is statute barred and you will not be making any payment. (see FCA handbook).

*** Save your money****

nem.

[Saint2K]

Re: F&F Settlement Help

If the debts have been removed from CRA files after the 6 years has elapsed from the default date (paid) or not) why are you intending to make any payment, if no payments or acknowledgments of these debts has been made in the 6 year period then they are statute barred.
The creditors could still attempt to chase the debts, but they cannot be enforced, all you would need to do is inform any party chasing the debts that the debt is statute barred and you will not be making any payment. (see FCA handbook).

*** Save your money****

nem.

Thanks for the reply.

I have been repaying these debts for the same period of time, on a lower, agree pro-rata repayment, so statute barred is not relevant to my situation.

So though these debts are not on my CRA any longer, they are still legally enforceable should the creditor decide to pursue me in court i.e. I fail to maintain existing repayments.

I am aware of the CCA aspect of this as they are all pre 2007 debts however I do not necessarily want to go down that route, as it is not guaranteed that the debts are unenforceable.

The rationale behind this approach is because a family member is gifting me £60K for a house deposit and I will be intending to get a small mortgage in the near future.

Depending on your viewpoint, I may need to declare these debts to the lender, which will probably scupper any chances of securing a mortgage irrespective of whether they show on the CRA or not, purely down to the amount outstanding and if I was a lender I'd see it being a risk (they won't care about whether they are potentially enforceable or not).

If however as part of the gift, I offer F&F to these creditors, which they would be wise to accept based on how long it will take me to repay the outstanding debt, then I can tell any future lender that the debts are clear.

Yes they may potentially make a reappearance in the future as per some other threads on here, but that doesn't really impact my current situation and that is a situation I feel far stronger about defending should it occur, especially as I would not proceed without written agreement from the creditor(s) confirming the amount offer is accepted in F&F.

Others have advised me to ignore the debts, due to their age, which aside from the morale stand point, I'm not sure I can deny they exist to a potential mortgage lender.

Obviously if anyone is an expert in the mortgage arena or can put forward other suggestions then please do as I am keen to consider all angles.

My credit history is okay/average and I imagine with the size of deposit I am offering that a small mortgage should be no issue - the only hurdle is this outstanding debt that is not on my CRA but does still technically exist and is still POTENTIALLY enforceable.

[nemesis45]

Re: F&F Settlement Help

The mortgage lender will search a " selection" of CRA records, and will see no debts, but I agree with you on the mortgage scenario, applications are researched very deeply now.
A problem these days is that mortgage lenders are using the N Hunter credit alert site, which will alert the lender to any " previous problems" with accounts and applications, and may suggest "further inquiries" are needed on the application. (Hunter does not give credit references just alert on previous problems.

The enforceability of these debts which I presume are all defaulted, is highly unlikely Limitations Act 1980 states that no action should be started after 6 years from the cause of action i.e. the default date.

[Saint2K]

Re: F&F Settlement Help

The mortgage lender will search a " selection" of CRA records, and will see no debts, but I agree with you on the mortgage scenario, applications are researched very deeply now.
A problem these days is that mortgage lenders are using the N Hunter credit alert site, which will alert the lender to any " previous problems" with accounts and applications, and may suggest "further inquiries" are needed on the application. (Hunter does not give credit references just alert on previous problems.

The enforceability of these debts which I presume are all defaulted, is highly unlikely Limitations Act 1980 states that no action should be started after 6 years from the cause of action i.e. the default date.

Thanks for the reply, I thought it best to explain my situation so that it made a little more sense.

I will have a look at Limitations Act 1980.

However, would you agree, that F&F in this scenario is probably the best way forward?

[Amethyst]

Re: F&F Settlement Help

I think F&F's would be a good idea while you are in a position to do so. The creditors obviously don't know how much you are able to offer but I would think rather than keep accepting a few quid each month a 30-40% full and final lump sum would be snapped up.

Something to keep in mind is that once you do have a property, these creditors that are happily accepting minimal payments each month MAY see the purchase come up on your credit file and jump in for a court claim to get a security over the house.... its a vague risk but one I think you should keep in mind when deciding whether to try and get these debts settled.

If you have been making minimal payments on the debts then no they won't be statute barred so the Limitations Act won't assist.

[Saint2K]

Re: F&F Settlement Help

I think F&F's would be a good idea while you are in a position to do so. The creditors obviously don't know how much you are able to offer but I would think rather than keep accepting a few quid each month a 30-40% full and final lump sum would be snapped up.

Something to keep in mind is that once you do have a property, these creditors that are happily accepting minimal payments each month MAY see the purchase come up on your credit file and jump in for a court claim to get a security over the house.... its a vague risk but one I think you should keep in mind when deciding whether to try and get these debts settled.

If you have been making minimal payments on the debts then no they won't be statute barred so the Limitations Act won't assist.

Thanks for the reply.

I just looked at the Limitations Act so inclined to agree that it doesn't apply.

I think the only option I have though is to go down the F&F route if I want to take on a property, ultimately there is no other option.

Our plan is to settle the debts prior to making the house purchase (so comeback shouldn't be an issue) and it will be a third party making the payment which I understand makes the agreement that more water tight.

One other option if there was any come back would at that point use the CCA pre 2007 defense.

This at least is my current plan of action. Unless anyone has any other suggestions?

[Amethyst]

Re: F&F Settlement Help

Nope I'm 100% with you there.

You COULD send a CCA request at the same time you make an intial step to negotiation - which might help them along with accepting your offer. If you are making the offers in writing, enclose the CCA request with the offer letter and mention you have done so, and that a third party has offered to help you sort a couple of your debts out - don't mention your wanting to buy a house, as that gives them knowledge that you NEED to get the debts sorted and thus leverage in getting more out of you.

[Saint2K]

Re: F&F Settlement Help

Nope I'm 100% with you there.

You COULD send a CCA request at the same time you make an intial step to negotiation - which might help them along with accepting your offer. If you are making the offers in writing, enclose the CCA request with the offer letter and mention you have done so, and that a third party has offered to help you sort a couple of your debts out - don't mention your wanting to buy a house, as that gives them knowledge that you NEED to get the debts sorted and thus leverage in getting more out of you.

Great, I've been debating for days on the best approach and I certainly think this is the way forward.

I have sent off two of the F&F letter today and though I did not include a CCA request I did say in the letter that I was aware that to date no valid CCA has been provided. I sent a CCA request to both creditors many years ago.

I also made reference to the fact the money was coming from a third party and only available for a limited time.

I've not mentioned the intended property purchase at all.

I just hope they accept the offers and I can get the debts settled over the next two to three months as this was the timescale for looking at purchasing a new property.

My mum thinks I should look at getting a mortgage decision now, as it is valid for six months, but I don't know whether to do that or not based on knowing these debts are still hanging around.

I've received mixed advice .. some people have said that as they are pre 2007 CCA that I am not technically in the wrong by saying they don't exist as the debt was never valid.

I guess it depends on what questions a lender asks as part of the mortgage ....

[Saint2K]

Re: F&F Settlement Help

Also, here is a thought, in relation to a point made above.

Can a creditor, or debt collection agency, debt owner, spontaneously run a credit check on you without your permission?

For example, let's say I apply for a mortgage and I am successful, I offer F&F to creditors (Apex / Link Financial / RBS and Cabot) can they see my mortgage application without permission by looking at my credit file?