F&F

[Sullino]

Hi, I'm new to this site and would appreciate any advice.

I'm currently in a DMP (since mid 09) but a third party has offered to give me money for an early settlement.

How do I approach companies and how low should my settlement percentage be? Should I ask for a CCA and account statement initially?

I owe ~£22,500 to two DCA's and £500 to an OC

[woungd]

Re: F&F

Hi. It does not sound healthy to me. Why would someone gives you money to settle your debt? I would get all the facts in writing first, then seek further advise. Be weary of Scams, there are loads out there. I have been subjected to many scams offers, be sceptic, if it is too good to believe it is not that good. Regards

[Amethyst]

Re: F&F

Yes ask for CCA's and statements of accounts first - you might need to go through your DMP provider so check their terms - Then you can start offers for the DCA's at 10% ( worth a try) probably aiming for 30% settlement - and the OC at about 35%- 50%. The DMP provider may be able to negotiate a lower settlement for you, but really depends on who they are and how they get paid etc.

Is it a family member offering to help you get these paid off?

[Sullino]

Re: F&F

Apologies, it's my father who is willing to pay off these debts. I should've made that clear.

My DMP is Payplan. I thought it would be better financially to go through the procedure myself as they may charge.

[Amethyst]

Re: F&F

Payplan don't charge you, no, however you might be able to get a lower settlement by doing it yourself. I don't think there is anything in their terms about full&finals - however it might be seen as a breach of your DMP so I'd try and get them all sorted at the same time as the DMP may be cancelled due to giving preferential treatment to one creditor over another, so get them all agreed and then tell Payplan you no longer need the DMP.

If the payments are being made by a third party ( your dad ) then get him to write the letter and sign the cheques and get the agreement that the payment will be in full and final settlement from the lenders in writing before making the payments.

[Sullino]

Re: F&F

I had never thought about getting my dad to deal with them, thank you!

I was going to deal with them myself and then get my dad to pay through his own account but your way sounds better

[Amethyst]

Re: F&F

There is a legal reason why.... I'll find something that makes sense about it.... some 12th Century case law I think

Ahh there is lots of case law historically, but basically its because by a third party making the payment and the payment being accepted it creates a contract between the third party and the creditor which is enforceable. You will have to find out the balances on the accounts but your father can make the full and final settlement offers and, if accepted, payments. So long as you get confirmation in writing though you should be absolutely fine.

[Sullino]

Re: F&F

So my father should make the offers but if the OC and DCA's agree then they should write to me saying they accept the offer and I will be debt free?

See the CCA's are they sent to the accounts for the two credit cards and one loan but not the 4 current accounts with overdrafts? I might just do the CCA and account statement requests through Payplan, would that be wise?

[Sullino]

Re: F&F

Would it also be a good idea to get a default removed from my credit report before making a payment? I noticed one account has been in arrears since Aug 10 but only went to default in Jul 15. All others are now off my report but this has just gone on. I have never missed a DMP payment and my monthly DMP payments have increased yearly

[charitynjw]

Re: F&F

Payment by a third party makes sense if someone happens to be on state benefits (not suggesting you are).

I believe that DWP refer to the 'deprivation of capital' rule

[Amethyst]

Re: F&F

So my father should make the offers but if the OC and DCA's agree then they should write to me saying they accept the offer and I will be debt free?

See the CCA's are they sent to the accounts for the two credit cards and one loan but not the 4 current accounts with overdrafts? I might just do the CCA and account statement requests through Payplan, would that be wise?

I'm not sure payplan will do the CCA requests, so maybe do those yourself directly ( on the cards and loans) which, IF they can't comply, could put you in a better negotiating position for F&F's. You can ask for statements from payplan although sometimes they aren't exactly what the creditors have as the amoutn outstanding as some continue adding interest etc. It might be worth having a chat with paypaln before you make any moves.

Sadly the DMP won't stop accounts from defaulting, however it is strange to have one default after 5 years of being in arrears. Has interest still been acruing throughout that period too ? Has that debt just been sold on to a DCA and they've registered the default maybe? With that one that has just gone on then you could try and get them to agree to remove the default, the others will come off next year and really is fair game as you did breach the agreements, but sounds like that one SHOULD have defaulted in Aug 10 with the others.

[Sullino]

Re: F&F

I wasn't sure on whether I should approach Payplan or not. If I mention to them that I am going down the F&F route they may want to take over and say the have agents with experience etc but then get a higher settlement offer than I would've. But I do think I should lower my monthly payments to £1 each so as to make the F&F offer more attractive. I have let them know that it's my father who is making the monthly payments.

As for the default I completely understand that they should be on the credit report but to get one 5 years later confuses me. The interest had been frozen but I will need to double check that now. The default was with the OC and it has been with them throughout the DMP. I was hoping to clear my debts this year and have no defaults so I could start fresh

[Amethyst]

Re: F&F

It does seem very unfair and you should talk to the creditor about that - have you actually received a default notice ? It might be worth calling the creditor and asking them when the account was defaulted ( as you're getting information together ) before bringing up your credit file issue.

[Sullino]

Re: F&F

I will phone them and ask a few questions; when account was opened? when it defaulted? remaining balance? so it's purely informational. I have no recollection of receiving a default notice. So will ask them for a copy of this.

Should I send out CCA and account statement requests before the F&F lump sum is available (awaiting sale of business) from my father? I'm scared they'll take it the wrong way and will be summoned to court or pay it all off etc

[Sullino]

Re: F&F

"(Your home address)
Date:………..
(Creditor Address)
Without Prejudice
Dear Sir/Madam
Account No: …………………………

I write with reference to the money which you are claiming on the above account.

I can confirm that I am unable to pay the money which I owe in full as I am unemployed and claim no benefits nor have any assets. I have many debts which amount to a great deal and I am currently making token payments of £1 per month.

However, my father is prepared to offer me £xx. I want to offer this sum as an ex-gratia payment, in full and final settlement of the account. The payment will not be made unless the offer is accepted and if the offer is rejected these funds will no longer be available.

This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released for any liability. I also request that, if accepted, you will make an entry on all three credit reference agency files namely Experian, Equifax & Call Credit relating to the above account as "satisfied" in full.

Payment can be made within 14 days of receiving your written agreement of this offer and method of payment.

As advised no lump sum will be available until I have received written confirmation of all points in the above offer and if you are unable to accept my offer then I will regrettably have to withdraw the offer and continue to make monthly token payments.

I look forward to receiving your reply.

Yours faithfully"

How does this template for an F&F offer look? Have I missed anything?