Full and final settlement - secured loan

[Mancs80]

Hello All,

I am am new here and am seeking some advice please.

After many years of struggling with a secured loan I have managed to get a full and final (reduced) settlement agreed. The reduction is considerable and I want to proceed ASAP but I a way where I am protected as much as possible.

My question is how do I ensure that they do three things (I did request these in my proposal to them)

1. Permanently remove the legal charge on the land registry
2. update my credit file to show the debt as settled
3. confirm that I will at no point be pursued by XXX or it's agents relating to the former debt, I.e. The files are now closed and the debt is cleared.


how do I ensure that the above DOES actually happen, is there a way of writing this as a contract? Or could I simply write a letter when I send the cheque and say "by cashing the enclosed cheque you will be deemed as accepting the points below..."


Any advice would be great fully received.

kind regards

[seduraed]

Re: Full and final settlement - secured loan

There are more experienced beagles who will advise . first do you have the offer of a full and ind final settlement in writing ? Second It is vital that the cheque is from a third party . A building society cheque will do . Te reason as I understand it is that the cashing of a third party cheque creates a new contract . but you need to state clearly in the letter that it is in full and final settlement and outline the items you mentioned previously . It is also important to let them know that no more money will be coming your way so words like "a generous once only gift from a family member to help sort out my debt problems. However there is not enough to pay all my creditors in full and prorata offers are being made."

[Mancs80]

Re: Full and final settlement - secured loan

There are more experienced beagles who will advise . first do you have the offer of a full and ind final settlement in writing ? Second It is vital that the cheque is from a third party . A building society cheque will do . Te reason as I understand it is that the cashing of a third party cheque creates a new contract . but you need to state clearly in the letter that it is in full and final settlement and outline the items you mentioned previously . It is also important to let them know that no more money will be coming your way so words like "a generous once only gift from a family member to help sort out my debt problems. However there is not enough to pay all my creditors in full and prorata offers are being made."

Thanks for your reply.

I forgot to mention in my first post... The negotiation has been done via a third party firm (empingham resolution and negotiation) and the lender is their client. I have asked for a hard copy of their agreement in the post, all contact regarding the offer has so far been via email. I have asked that I receive notification from the lender (in writing) that the payment is acceptable.

My original offer wasn't high enough, so they came back with a counter-offer which is acceptable.

Many thanks once again for your help.

[FlamingParrot]

Re: Full and final settlement - secured loan

Hello All,

I am am new here and am seeking some advice please.

After many years of struggling with a secured loan I have managed to get a full and final (reduced) settlement agreed. The reduction is considerable and I want to proceed ASAP but I a way where I am protected as much as possible.

My question is how do I ensure that they do three things (I did request these in my proposal to them)

1. Permanently remove the legal charge on the land registry
2. update my credit file to show the debt as settled
3. confirm that I will at no point be pursued by XXX or it's agents relating to the former debt, I.e. The files are now closed and the debt is cleared.

how do I ensure that the above DOES actually happen, is there a way of writing this as a contract? Or could I simply write a letter when I send the cheque and say "by cashing the enclosed cheque you will be deemed as accepting the points below..."

I concur with the idea of the third party cheque:

In Hirachand Punamchand v Temple [1911] 2 KB 330 the Court of Appeal ruled that the part payment was enough to discharge the debt as the payment was made via a third party.

Hirachand Punamchand v Temple [1911] 2 KB 330 Court of Appeal

The claimants were money lenders in India. They lent money to the defendant Lieutenant Temple who was an army officer serving in India. The claimants sought return of the money from the claimant but were unable to get any response so they contacted his father. Some correspondence went between the claimant and the father's solicitors. The claimants asked how much the father would be prepared to pay to settle the son's accounts. An amount was agreed which was a substantial, amount although not the full amount due. The claimant promised to send the promissory note relating to the son's debt to the father once they received payment. The father paid, but the claimant retained the promissory note and sued the son to enforce the balance.

Held:

The payment made by the father was sufficient to discharge the full balance. Where the person making payment in return for discharging the debt owed by another this will amount to good consideration as the existing duty to make payment was not owed by them but a third party.

You should also take a look at this thread - it has a lot of legal background and case law: http://www.legalbeagles.info/forums/...ght=full+final

[Mancs80]

Re: Full and final settlement - secured loan

Many thanks for the replies received so far. Does anyone know of a template letter to use when I submit the payment (bank counter cheque following advice here). I want to ensure my covering letter is worded appropriately and confirms what the settlement terms are.


thanks again

[panther12]

Re: Full and final settlement - secured loan

The thread highlighted above by FP has some good info and where I made my first post on this forum.

My first post as google directed me here after searching around on F&F settlements. Firstly I thank Garlok for the excellent post. I’m in the middle of a F&F with Moorcroft that is getting very interesting. I posted my experience on another forum but thought I’d chip in here with my own observations. I believe it’s crucial that the cheque comes from a 3rd party benefactor but, as pointed out to me on another forum, not to mark the cheque with account numbers or anything that will identify the cheque to the debtor. Leave that info buried within the accompanying letter of terms, that way if they've matched the payment to the debtors account there can be no argument for the creditor to claim they simply banked the cheque before reading the letter. I think this subject is fascinating and I’m learning all the time.

In our case, although Moorcroft tried to pay back the F&F after realising their mistake of cashing the cheque, 3 years on we never heard another peep from anyone.

[Mancs80]

Re: Full and final settlement - secured loan

Hello All,

please can can you help further....

i have today received an email, copied below:

Your Empingham Ref: xXX
Creditor: Welcome Financial Services Ltd
Welcome Finance Ref: xxxxxx
Amount Outstanding: £xxxxx

Agreed Settlement: £xxxx
Payment Due By: 30/04/2014

Further to our recent discussion, please accept this email as confirmation that we will accept £xxxxx00 as Full & Final Settlement on the above account on behalf of our client.

Payment is due as per the terms mentioned above. Although Welcome Finance will remain the beneficiary for the funds, payment must be made directly to Empingham Ltd.
This offer will not be presented by our client again, and non payment of the figure would result in the full amount being payable.
Payment may be made using any of the following options;

• By Credit/Debit Card by calling 08452 606 985.
• By CHAPS transfer to Empingham Ltd’s Client Account. Sort code ------- Acct No.-------- quoting your Empingham reference number.
• By sending a cheque made payable to Empingham Ltd quoting your Empingham reference number.
• Secure online payment at www.empingham.net
ALL PAYMENTS MUST BE MADE TO THIS OFFICE TO ENSURE SWIFT REMOVAL OF YOUR DEFAULT




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?

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.


what should I do? Get Welcome finance to confirm that Empingham is authorised to carry out the transaction and that charge and default will be removed?


help!

[wales01man]

Re: Full and final settlement - secured loan

Proceed with extreme caution

[Mancs80]

Re: Full and final settlement - secured loan

Proceed with extreme caution

Hi, thanks for reply.

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

many thanks

[Silent assassin]

Re: Full and final settlement - secured loan

I do not know whether this information will assist you but at least it is something to think about. I append as follows:

Contrary to popular perception part payment of a debt does NOT discharge the debt. Pinnel's Case (1602). therefore, assume that i ow someone £100 and say will they accept £50 and they say "OK" they can still sue me for the outstanding sum.

Exceptions to this rule exist:

• Payment in a different form (for example paying some money and giving something else. £50 and a watch would, for example, discharge the debt of £100
• Payment in a different place
• Payment at a different time (paying sooner is regarded as greater consideration and therefore discharges straight-forward payment

Sometimes the courts will assist even if money has been partly paid and where more is demanded and the equitable doctrine of estoppel comes into play. Case of HIGH TREES

So, I owe someone £100 and pay £50 and the person to whom I owe the money comes back for the rest he is "estopped" from going back on his word. However, there are no hard and fast rules for estoppel and it must cause detriment to a party of a significant change in position. For example, where it may cause undue hardship.

When you have any order set up it is a Tomlin Order this sets out the respective contract between the parties. However, it is also important to have in it that a party will agree not to take any further action on the debt and also use the terms "In full and final settlement".

It has been mentioned earlier by payment via a third party. This is not true to discharge the debt. The only time it would be true if under what is known as the "Statute of Frauds 1677". Essentially this is where a third party pays off your debts. So, A owes B £500 and gets C to pay off the debt. B cannot reclaim the money from A.

Other points:

The charge at the land registry is capable of being removed once the debt has been satisfied.

I believe the CCJ can be removed but there are certain time limits. I cannot at the moment think of the company with whom they are registered. Something trust?

I hope this information helps you and good luck!

[Mancs80]

Re: Full and final settlement - secured loan

I do not know whether this information will assist you but at least it is something to think about. I append as follows:

Contrary to popular perception part payment of a debt does NOT discharge the debt. Pinnel's Case (1602). therefore, assume that i ow someone £100 and say will they accept £50 and they say "OK" they can still sue me for the outstanding sum.

Exceptions to this rule exist:

• Payment in a different form (for example paying some money and giving something else. £50 and a watch would, for example, discharge the debt of £100
• Payment in a different place
• Payment at a different time (paying sooner is regarded as greater consideration and therefore discharges straight-forward payment

Sometimes the courts will assist even if money has been partly paid and where more is demanded and the equitable doctrine of estoppel comes into play. Case of HIGH TREES

So, I owe someone £100 and pay £50 and the person to whom I owe the money comes back for the rest he is "estopped" from going back on his word. However, there are no hard and fast rules for estoppel and it must cause detriment to a party of a significant change in position. For example, where it may cause undue hardship.

When you have any order set up it is a Tomlin Order this sets out the respective contract between the parties. However, it is also important to have in it that a party will agree not to take any further action on the debt and also use the terms "In full and final settlement".

It has been mentioned earlier by payment via a third party. This is not true to discharge the debt. The only time it would be true if under what is known as the "Statute of Frauds 1677". Essentially this is where a third party pays off your debts. So, A owes B £500 and gets C to pay off the debt. B cannot reclaim the money from A.

Other points:

The charge at the land registry is capable of being removed once the debt has been satisfied.

I believe the CCJ can be removed but there are certain time limits. I cannot at the moment think of the company with whom they are registered. Something trust?

I hope this information helps you and good luck!

Hi Silent Assassin,

many thanks for for your reply.

so, you can see no benefit in me getting a third party (bankers counter cheque or similar) A simple bank transfer would be fine?

[Silent assassin]

Re: Full and final settlement - secured loan

Hello

Yes a bank transfer will discharge the debt.

Before I forget its Registry Trust which deals with the CCJ's etc.

http://www.trustonline.org.uk

[FlamingParrot]

Re: Full and final settlement - secured loan

Hi Silent Assassin,

many thanks for for your reply.

so, you can see no benefit in me getting a third party (bankers counter cheque or similar) A simple bank transfer would be fine?

There would be an advantage to using a third party cheque as noted above. As you are settling a SECURE debt, I'd say this becomes even more important, even if it's a little more time-consuming, it may be worth it. :thumb:

The charge at the land registry is capable of being removed once the debt has been satisfied.

I believe the CCJ can be removed but there are certain time limits. I cannot at the moment think of the company with whom they are registered. Something trust?

I hope this information helps you and good luck!

No, they can only be removed if paid within 28 days, otherwise they will just appear as 'satisfied' but will stay on record for 6 years: http://www.trustonline.org.uk/unders...satisfied-ccjs

If you pay a CCJ more than a month after the judgment date, it stays on the register for six years. There is no way to remove it.

If you've paid the CCJ in full, however, you can apply to have it shown as satisfied by showing the court your receipt. If you can't get this type of proof, the court will write to the person who won the CCJ.

[Mancs80]

Re: Full and final settlement - secured loan

Hi, thanks again for the replies.

to clarify, I have not received a CCJ, just a default. I am awaiting confirmation that the default will be removed/settled and the property charge will be permanently removed.

Regarding the third party cheque issue, do all banks provide a counter cheque service, or do they call them bankers drafts now?

thanks again

[FlamingParrot]

Re: Full and final settlement - secured loan

Hi, thanks again for the replies.

to clarify, I have not received a CCJ, just a default. I am awaiting confirmation that the default will be removed/settled and the property charge will be permanently removed.

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.

Regarding the third party cheque issue, do all banks provide a counter cheque service, or do they call them bankers drafts now?

thanks again

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.