1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place!)

[Ash76]

Hi,

I'm hoping to find some guidance on dealing with 2 debts:

Lowell current account £1,711 defaulted 2.11.09
After the usual Lowell chaser letters I recently received a letter from RED offering a 30% discount for partial settlement and another from Lowell offering 50% partial settlement within the same week - I am aware they are the same strain of pond life from lurking this excellent forum! Following this (about ten days) I received a letter from Hamptons advising that as I had not responded to the offer to take advantage of a 'large discount' they are preparing my account for the 'appropriate next steps to recover the balance, that could include starting legal action'.

Lloyds Current account £3,187 defaulted 2.11.09
Default balance £3,408 - currently paying £20/month to Westcot Credit Services - which I understand I possibly should not have done?
I hear absolutely nothing from anyone on this apart from an annual statement from Westcot showing the monthly payments made and reducing balance. No interest is being applied to this.

I have no issue with owing the money, I went through a bad 2 years coming out of my own business in 2007/8 and the defaults are down to me not dealing with things well at the time due to other personal issues. A year volunteering abroad and a change of career since and I have no other debts, earn a healthy salary for a large national organisation and save regularly across a number of accounts - to build an option to clear some of these debts and get back on the property ladder.

I need to do something about these debts for 2 reasons, firstly they bug the hell out of me that I let things get this far so I would like to put this, the memories and it's effect on my credit rating, behind me!

Secondly, I have recently inherited some money from the unexpected passing of a relative which has drastically changed my financial position and opens the door for me to look at buying a house with a considerable deposit - there are instructions that a large part of the inheritance should be spent on 'securing a home for my future family' which I would like to honour as best I can.

So . . . . . questions!!

Is there any action I need to take immediately?

Should I just contact Lloyds and Lowell to make a full and final payment of the outstanding balances on both debts to get them settled on my credit records, as I would like to get this sorted asap?

(I appreciate that there could still be implications on my mortgage options with settled debts as defaults will still show on my file, but I guess that is where my advisor earns his money and I continue to pay the price for not dealing with this sooner!)

Should I ask Lloyds about any charges or interest on the balance I owe them directly?

Any and all advice will be really helpful - I'm nearly there!

Thank you,

Ash

[Amethyst]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Hi

As both debts are current accounts - overdrafts presumably - (thus the CCA won't apply) and are both quite recent and not going to become stat barred for a fair while yet, especially the one with westcot - then it is likely they would be able to get the paperwork together if they took you to court and if you want them out of your hair and protect further damage to your credit rating, and can afford to negotiate a decent discount for a F&F then it would probably be a good move. The defaults would get marked as settled but it wouldn't extend the time they show on your credit file, and they'd still drop off 6 years after the date of the default. I think the caveat of your inheritance 'securing a home' would be covered in sorting out historical debts so that will enable you better to obtain a mortgage xx

[Ash76]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Hi Amethyst,

Many thanks for your reply, incredibly helpful! Nice to know that once settled these will be off my file within the next 2 years due to the original default date.

Just to make sure I understand correctly - is a full and final settlement that is negotiated down from the actual figure different from a 'partial payment to settle' as offered by Lowell?

For example -

A 'Full and Final settlement' of say £1,000 against a debt on my record of £1,711 would leave me with a debt settled in full of £1,000 when my credit file is updated.

Whereas the 'partial payment to settle' received from Lowell of £855 against the same debt would still show as £1,711 settled at £855 on my updated credit file.

In which case full and final is presumably better but imperative to make sure this is how matters are settled and updated so confirmation in writing before paying, etc?

Apologies if I have over-complicated this in my own head!

Thanks,

Ash

[Ash76]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Hi,

Sorry to bump this thread, I'm hoping someone can clarify for me please!

I've contacted Lowell to try and negotiate a full and final settlement on the debt above of £1,700 and they have offered a figure of £950.

I've received an email response from them with the figure however I have queried the wording by phone and they are saying that they will only accept the offer as a partial settlement and mark as partially paid on my credit report as "they legally have to apply a true reflection of the arrangement, this will however be the end of the matter and the debt will be considered closed."

I used the 'full and final settlement offer' below - am I missing something here or is this correct?

Thanks,

Ash

I am unable to pay off the debt in full. However I am in a position to make an ex-gratia payment in full and final settlement of the above account. I can offer £950 as a full and final settlement of this debt.
This offer is being made on the basis that, if accepted, neither you or any associate company will take any further action or enforce to pursue this debt in any way whatsoever and that I will be released from any liability.
I also request that you make an entry on my credit file to mark the debt as satisfied in full.
I can make payment within 1 week of receiving your written acceptance and agreement of this offer.
I look forward to hearing from you soon.

[Amethyst]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Sorry Ash I missed your last post. Its fine to bump, or pm someone to have a look, if you've been waiting a while.

Just having a read .

[Ash76]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Hi Amethyst,

Thank you - didn't want to be rude!

Ash

[Amethyst]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

Hi,

Sorry to bump this thread, I'm hoping someone can clarify for me please!

I've contacted Lowell to try and negotiate a full and final settlement on the debt above of £1,700 and they have offered a figure of £950.

I've received an email response from them with the figure however I have queried the wording by phone and they are saying that they will only accept the offer as a partial settlement and mark as partially paid on my credit report as "they legally have to apply a true reflection of the arrangement, this will however be the end of the matter and the debt will be considered closed."

I used the 'full and final settlement offer' below - am I missing something here or is this correct?

Thanks,

Ash

I am unable to pay off the debt in full. However I am in a position to make an ex-gratia payment in full and final settlement of the above account. I can offer £950 as a full and final settlement of this debt.
This offer is being made on the basis that, if accepted, neither you or any associate company will take any further action or enforce to pursue this debt in any way whatsoever and that I will be released from any liability.
I also request that you make an entry on my credit file to mark the debt as satisfied in full.
I can make payment within 1 week of receiving your written acceptance and agreement of this offer.
I look forward to hearing from you soon.

Okay, them accepting it as F&F of the debt is good, and yes they can only mark it as partially settled on your credit file, as it is in reality only partially settled, just they are happy with that.

I'll try double check on the CRA timescales side.

[FlamingParrot]

Re: 1 Lloyds and 1 Lowell - advice needed please (feel free to move if in wrong place

I would suggest having a look at this thread: http://www.legalbeagles.info/forums/...ght=full+final

In particular, the subject of third party cheques, to ensure they can't chase you for the balance or sell it on to someone else who will

I had that experience in the past with a small debt I settled for a reduced amount with AK, only to receive endless letters asking for the balance, :mad2: :mad2: :mad2: so I'd say it pays to go a bit further to make sure that doesn't happen to you. :thumb:

With regards to the CRAs, they will mark it as partly satisfied as that's what it will be, however, if this is an old(ish) debt, the default won't be there much longer, it'll drop off 6 years after it was recorded. :grin: