McDionne - Full & Final Settlement

[McDionne]

When sending a full and final settlement letter, who should it be addressed to? The original creditor or the debt management company??

[FlamingParrot]

Re: Full and Final settlement offer advice

Before making a full and final offer, I'd strongly suggest looking at this thread: http://www.legalbeagles.info/forums/...ght=full+final

It's always a good idea to ensure your settlement is as watertight as it can be and that they can't either chase you for the balance in the future or sell the balance on to another company. That's exactly what happened to me a few years ago when I decided to take advantage of one of Aktiv Crap's 'generous offer' letters and settled over the phone. BIG MISTAKE! It was just a small amount and should be SBd now but I still get regular letters from them asking for the balance! :mad2: :mad2: :mad2:

It's also a good idea to mention the relevant case law as on this letter: http://www.legalbeagles.info/forums/...203#post454203 as well as making the payment via a 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.

[nemesis45]

Re: Full and Final settlement offer advice

When sending a full and final settlement letter, who should it be addressed to? The original creditor or the debt management company??

To the original creditor.

A fully and final settlement offer is best started with a low (ish) offer say 10-15% of the balance to allow room for negotiations.#
The offer should be made conditional upon the following points.

1. Any remaining balance is not to be sold or assigned for collection to any 3rd party.
2. Credit Files to be marked as settled rather than satisfied.
3.If the offer is accepted payment will be made within 7 days of the creditors written acceptance of the offer.

Never send money until you have the written acceptance, use signed for post or get proof of posting.

nem

[McDionne]

Re: Full and Final settlement offer advice

To the original creditor.

A fully and final settlement offer is best started with a low (ish) offer say 10-15% of the balance to allow room for negotiations.#
The offer should be made conditional upon the following points.

1. Any remaining balance is not to be sold or assigned for collection to any 3rd party.
2. Credit Files to be marked as settled rather than satisfied.
3.If the offer is accepted payment will be made within 7 days of the creditors written acceptance of the offer.

Never send money until you have the written acceptance, use signed for post or get proof of posting.

nem

Thank you

[McDionne]

Re: Full and Final settlement offer advice

Hello again, before receiving your response I had sent an email to the debt management company. Today I also sent a letter (f&f) to the original creditor by next day tracking. Will this cause any confusion?

Thanks in advance

[McDionne]

Re: Full and Final settlement offer advice

Hello again. After going back and forth finally spoke to the bank. They state they're willing to accept my offer as a full and final settlement, write off the rest and nor pursue me (I'm guessing releasing from my liability) BUT will mark my credit file as partial settlement with the remaining balance registered.

Will this hurt my credit?
Also is this an actual full and final settlement?

Thanks in advance

Dionne

[nemesis45]

Re: Full and Final settlement offer advice

The " Partial Settlement" is all the bank can register, the ICO says that Credit Reference Files must show an accurate and up to date picture of the conduct of the account.
Was this account defaulted? If so
I would guess your "credit profile" will already have been affected so now it is a case of rebuilding.

nem

[McDionne]

Re: Full and Final settlement offer advice

Thanks for your reply.
Credit file not great as despite being in an arrangement with the bank they have been recording late (6) payments every month. Which is why I'm keen to settle and begin the rebuilding. An actual default notice hasn't been issued. Status on credit file shows as delinquent. Is this the same?

[nemesis45]

Re: Full and Final settlement offer advice

Good morning,
LP markers are as damaging as defaults on credit files and leave the debtor in a far worse position that someone who has a default registered on an account and make no effort to pay yet has the default entry removed from CRA files after 6b years paid or not.

No, delinquent means the account is not being conducted according to the terms and conditions of the agreement.

A delinquent marker is already affecting your credit status.

I would suggest that before you actually make any payment in F&F settlement you restate the offer to include that the " arrangement to pay/ late payment markers and the " delinquent " status marker are removed.

nem

[McDionne]

Re: Full and Final settlement offer advice

Thank you very much for your detailed response. I really appreciate it. Just to clarify - regarding requesting arrangement to pay/delinquent status to be removed. Do you mean going forwards or what they had recorded previously?

And yes my credit file has been impacted, the 6 status has been recorded for several years. I assumed as an arrangement was in place and the payments were on time, all was well. Sadly for me, I had no idea.

Thanks again .

Dionne

[seduraed]

Re: Full and Final settlement offer advice

To the original creditor. From Dad,
Accepting no personal liability
A fully and final settlement offer is best started with a low (ish) offer say 10-15% of the balance to allow room for negotiations.#
The offer should be made conditional upon the following points.

1. Any remaining balance is not to be sold or assigned for collection to any 3rd party.
2. Credit Files to be marked as settled rather than satisfied.
3.If the offer is accepted payment will be made within 7 days of the creditors written acceptance of the offer.

Never send money until you have the written acceptance, use signed for post or get proof of posting.

3 A cheque is enclosed from dad for X presentation of this cheque to your bankers is an acceptance of the new contract made between dad and original creditor under Hiramchand and Pumanchand 1911

[nemesis45]

Re: Full and Final settlement offer advice

The last para is not viable and sending any payment made in this way will be applied to the account and the creditor will continue to press for payment if the amount remaining.

The written agreement to the terms of the F&F offer is the only way to deal with this any other approach will be disastrous.

nem

[McDionne]

Re: Full and Final settlement offer advice

Hello again. I checked my credit file and it just says the status of the account is active.

I'm worried that on acceptance of the partial settlement they will mark account as default. Will they be within their rights to do that? Or is s partial settlement just that? They have said it'll be updated to state partially settled. Will they need to inform me if they intend to mark the account as default?

Dionne.

[nemesis45]

Re: Full and Final settlement offer advice

No it should not result in a default. A partial settlement or settlement in full whichever is the
correct description regarding the conduct of the account.

nem

[McDionne]

Re: Full and Final settlement offer advice

Thank you. Panicking now. I'm awaiting the letter from them. It's been going on for so long I'm scared to exhale. I have had to make numerous complaints so it seems to be good to be true.

I appreciate you putting my mind at ease Nem