Debt Questions forum. General questions on debt issues.

Moderators: TalbotWoods, JaneClack

By Monty
#3303 I would like to know if anyone has had any experience of making Full & Final offers to clear debts? I currently have £20k owing to three creditors for which I pay £169 per month as agreed through the CAB. I may be able to get money from the family as they want to get us out of this, but they cannot stretch to the full £20k. I have spoken with the three creditors and this is what they have had to say:

Egg - £6k owing, will only accept 80% offer no less
Marbles - £6k owing, will only accept 80% offer no less
MBNA - £8k owing, will only accept full amount.

MBNA have stated that they will not accept an offer of less as we are currently meeting their payment plan agreement of 0.8% of the balance per month. Is this right and do I stand any chance of clearing these debts with a Full & final settlement? The figure I may have available is only £15k which amount to 75% for each. Can anyone tell me if they have had companies accept this and how they went about doing it.

Any help and advice would be greatly appreciated.


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By Nicky
#3305 Creditors would be more willing to accept full and finals if you had been defaulting on payments. If you are keeping up your payments they may be less willing to oblige. 80% is quite a good offer, and most will go for that, if you do a search on the forum, you will see where other folk have offered F&Fs and what percentage.
ByTootsie Roll
#3308 I agree with Nicky - 80% is a good offer however unliley they will accept it if you are paying regularly. Would mean you had to ruin your credit rating to get it accepted by missing payments and receiving defaults.
By xsavier
#3311 Monty,

I have just finished a full and final and am pretty sure that the pence in the pound you are proposing is well above the acceptance level of most creditors in a classic F&F settlement.

The issue raised by Nicky and Tootsie seems to hit the mark, you have agreed with your creditors that you are unable to pay the balance back at the normal rate so have negotiated a lower rate of return. However the return will liberate 100% of the capital (don’t know how you negotiated interest, may be frozen?).

So, the question (walking a mile in the credit company’s shoes) is what’s in it for me? At the moment all of the borrowed moneys will be returned so what is the compulsion to accept a lower rate?

The creditors will classically only accept a lower capital return if the money you are offering is greater than the amount they will generate by perusing you through other means.

If you can demonstrate that your are experiencing difficulty or giving serious consideration to your personal insolvency you will be in with a chance.

Sorry, the info is not more positive but if we could all offer 75%-80% of the capital back we’d all be at it. :D


By Monty
#3343 I can see the argument from the creditors side very clearly, which is why in a way it baffles me that some accept so little.

All current balances have the interest frozen. My only concern, which has started already, is that at the reviews they will be pushing for more and more each month. Instead of paying a total of £169, between them they are now wanting me to go up to £214. If things continue like this, I will have no money to pay them and we'll start going backwards again.

I feel like we are in the 'Poverty Trap' of creditors. We are paying just enough not to get any other help, but not paying enough to actually get anywhere!

I figured that a Full & Final to each of 75% to 80% would at least see the creditors getting the most of their money. During the course of these agreements, we were issued with a default from each, so the credit rating is up the swanny so speak anyway.

Any thoughts are apreciated.
By xsavier
#3344 Hi Monty,

I see your point.

At the moment, you are repaying a sum each month which in time and in variance to your circumstances will repay the lump sum to the creditors. So, at the moment they have no reason to accept a lower sum.

The default notices are standard practice and indeed will affect your credit rating until they are marked as satisfied or drop off after 6 years.

Still the creditors will need to be convinced that they will not receive any more money by pursuing you through any other means.

But as the status quo continues, they receive money each money negotiated via the CAB, they will squeeze a little harder to reduce your repayment term and will be disinclined to accept a full and final unless they can see the proverbial wheel falling off.

If you were to put a case forward suggesting that you are no longer in a position to repay the monies at the rate specified for legitimate reasons they may consider your offer more seriously.


By Gettingthere
#3525 I do not know whether this will be of any help. I had a Marbles card which I couldn't pay. I was paying a concessionary amount monthly and never missed a payment. After about a year I started getting offers from Marbles that I could clear my account for a % payment, these started at 65% which I had not got access to. They eventually got down to 20% and at this stage I snatched their hands off with help from my parents. I will say that at the rate I was paying they would have been about 23yrs getting their money back. Also they were fully aware of my circumstances in that I had suffered a serious accident and am not likely to be able to work again.
By xsavier
#3530 Hi,

Sorry to hear about the accident.

From my own experience the creditors can accept as high as 100% (unlikely for the debtor) or as low as 25% (very thin ice). New reports say that a number of creditors will dismiss out of hand any offer below 35 pence in the pound. However, if the debt has been sold off to a DCA then the pence in the pound figure can be lower (as they may have brought a £1000 debt for a few pounds, so any return is a bonus). It all really depends on your ability to pay and the likelihood of the creditor returning more money by other means.

I think where Monty may have run into a sticky wicket is that he has made all payments and seems to be able to afford the payments at the current level thus leaving little incentive for the creditor to accept a lower return as at the current rate the entire sum will be returned.


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By JaneClack
#3531 Have you thought about going to the CAB and asking if they think you are suitable for an IVA as in this scenario, although you would definitely be paying fees, you could well go for a full and final settlement (a lump sum payment) of much less than 80%. You have good grounds for this as MBNA are not freezing interest - they often work out a new repayment plan within a DMP which is at less interest than normal. You could probably do this on the surplus you say you have. Give it a try anyway!