Credit Card debt gone bad
Discussion
A friend has a credit card debt that he can't pay.
The CC company has referred the matter to a collections agency.
I'm in a position to help and on reading the latest letter they are requesting details of income/expenditure. As an alternative they are offering the option of a lump sum payment ie we can make an offer to close the matter.
So the question is what percentage of the debt will they accept as full and final settlement?
The CC company has referred the matter to a collections agency.
I'm in a position to help and on reading the latest letter they are requesting details of income/expenditure. As an alternative they are offering the option of a lump sum payment ie we can make an offer to close the matter.
So the question is what percentage of the debt will they accept as full and final settlement?
fido said:
Offer to buy the debt from collection company?
I'm not in the debt collecting business.The matter is causing a very dear friend a lot of problems when he needs them least and I'm in a position to solve the problem. I don't want my offer to be insulting but by the same token I don't want to pay more than I have to.
Whatever you do don't let the CC know that you are prepared to help.
If your friend is prepared to take the hit to their credit rating then he needs to put together a convincing case as to why he's skint and work out the most he can afford to pay. Most CC providers would rather have something than nothing, it's just a case of putting your case as well as possible.
If your friend is prepared to take the hit to their credit rating then he needs to put together a convincing case as to why he's skint and work out the most he can afford to pay. Most CC providers would rather have something than nothing, it's just a case of putting your case as well as possible.
Debt collectors are now chasing. I'm assuming debt has been sold to them. No interest is being accrued.
A quick google...
http://www.ehow.co.uk/info_8543167_percentage-debt...
http://www.ehow.co.uk/way_5468647_much-offer-debt-...
suggests starting at 20% and negotiating from there.
Can't see them accepting anything near that figure personally.
A quick google...
http://www.ehow.co.uk/info_8543167_percentage-debt...
http://www.ehow.co.uk/way_5468647_much-offer-debt-...
suggests starting at 20% and negotiating from there.
Can't see them accepting anything near that figure personally.
Edited by B17NNS on Friday 1st February 13:29
Done a bit more digging on MSE and the consensus seems to be to negotiate by mail/e-mail. Start low, expect a counter and work from there.
I'll let you know how I get on.
This is a standard letter from MSE.
Any thoughts?
The Loan Company
Company House
Church Street
Newtown
Kent
R1 7HG
WITHOUT PREJUDICE
Dear Sir/Madam
Re: Card Account 1234567812345678
I write with reference to the money which you are claiming on the above account.
I can confirm that I am unable to offer to pay the money which I owe in full.
A relative is prepared to offer me £xxxx. I want to offer this sum as an ex-gratia payment, in full and final settlement of the account. The offer from my relative will not be available forever and my relative will not make the payment unless the offer is accepted.
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 a credit reference agency file 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.
I look forward to receiving your reply.
Yours faithfully
I'll let you know how I get on.
This is a standard letter from MSE.
Any thoughts?
The Loan Company
Company House
Church Street
Newtown
Kent
R1 7HG
WITHOUT PREJUDICE
Dear Sir/Madam
Re: Card Account 1234567812345678
I write with reference to the money which you are claiming on the above account.
I can confirm that I am unable to offer to pay the money which I owe in full.
A relative is prepared to offer me £xxxx. I want to offer this sum as an ex-gratia payment, in full and final settlement of the account. The offer from my relative will not be available forever and my relative will not make the payment unless the offer is accepted.
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 a credit reference agency file 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.
I look forward to receiving your reply.
Yours faithfully
B17NNS said:
Debt collectors are now chasing. I'm assuming debt has been sold to them. No interest is being accrued.
A quick google...
http://www.ehow.co.uk/info_8543167_percentage-debt...
http://www.ehow.co.uk/way_5468647_much-offer-debt-...
suggests starting at 20% and negotiating from there.
Can't see them accepting anything near that figure personally.
If it has been sold onto the collectors then (fairly obviously) they will have bought the debt for much less than was actually owed to the CC company. The 'art' is to try and assess how much they actually paid, how much they want to make, and come up with a magic number. Your friend should start very low. What they must be acutely aware of is ensuring the debt is properly, finally, paid off. It is quite common for people to think they have paid off 'in full and final settlement' and they've done nothing of the sort.A quick google...
http://www.ehow.co.uk/info_8543167_percentage-debt...
http://www.ehow.co.uk/way_5468647_much-offer-debt-...
suggests starting at 20% and negotiating from there.
Can't see them accepting anything near that figure personally.
Edited by B17NNS on Friday 1st February 13:29
Not that it helps much .. but if the collection company paid X% for the debt they will want at X% + Something. And Something will be greater than zero. 20% would be okay, if they only paid 15% for the debt. I mean they make 5% straight off without lifting (or breaking) any fingers.
Edited by fido on Friday 1st February 14:23
B17NNS said:
Done a bit more digging on MSE and the consensus seems to be to negotiate by mail/e-mail. Start low, expect a counter and work from there.
I'll let you know how I get on.
This is a standard letter from MSE.
Any thoughts?
The Loan Company
Company House
Church Street
Newtown
Kent
R1 7HG
WITHOUT PREJUDICE
Dear Sir/Madam
Re: Card Account 1234567812345678
I write with reference to the money which you are claiming on the above account.
I can confirm that I am unable to offer to pay the money which I owe in full.
A relative is prepared to offer me £xxxx. I want to offer this sum as an ex-gratia payment, in full and final settlement of the account. The offer from my relative will not be available forever and my relative will not make the payment unless the offer is accepted.
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 a credit reference agency file 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.
I look forward to receiving your reply.
Yours faithfully
Forget the WITHOUT PREJUDICE rubish, he is not a lawyer.I'll let you know how I get on.
This is a standard letter from MSE.
Any thoughts?
The Loan Company
Company House
Church Street
Newtown
Kent
R1 7HG
WITHOUT PREJUDICE
Dear Sir/Madam
Re: Card Account 1234567812345678
I write with reference to the money which you are claiming on the above account.
I can confirm that I am unable to offer to pay the money which I owe in full.
A relative is prepared to offer me £xxxx. I want to offer this sum as an ex-gratia payment, in full and final settlement of the account. The offer from my relative will not be available forever and my relative will not make the payment unless the offer is accepted.
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 a credit reference agency file 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.
I look forward to receiving your reply.
Yours faithfully
Also, the creditor will not record the debt as satisifed in full because it hasn't been, so no point in trying that on. If they accept the offer they should record it as satisfied with a part payment.
Regards the percentage they may accept, it really depends on how deep in debt he is, how many payment have been missed already and who the creditor is. So without all that information it's difficult to say.
I helped my brother with one of these a couple of years back.
At first, they insisted they wanted the lot, so we just plain refused as that was impossible. It then went quiet for a couple of months, when they offered a 14 day window to clear the debt with a "reasonable" offer and were asked to call them - we offered 20% as a one-off or 25% over 6 months, both of which were refused though we gave our phone numbers to the agent should they wish to reconsider. Another month went by and then another letter giving a "final opprtunity before legal action" arrives so we make the same offer - they took the 25% over 6 months but with 10% down and 3% monthly thereafter.
The debt is shown as satisfied in his credit search.
I reckon they pay 10-15% of the actual debt to the CC company, otherwise they wouldn't see it as commercial to accept our offer.
David
At first, they insisted they wanted the lot, so we just plain refused as that was impossible. It then went quiet for a couple of months, when they offered a 14 day window to clear the debt with a "reasonable" offer and were asked to call them - we offered 20% as a one-off or 25% over 6 months, both of which were refused though we gave our phone numbers to the agent should they wish to reconsider. Another month went by and then another letter giving a "final opprtunity before legal action" arrives so we make the same offer - they took the 25% over 6 months but with 10% down and 3% monthly thereafter.
The debt is shown as satisfied in his credit search.
I reckon they pay 10-15% of the actual debt to the CC company, otherwise they wouldn't see it as commercial to accept our offer.
David
In my experience trying to negotiate with these DCA by letter/email is a waste of time - they don't seem to understand the word and I just ended up going around in circles and they seemed to be playing for time with a court case looming.
I have a cc debt with MCS which, after them taking me to court for an order for sale on my house, which the court refused, I'm making a regular monthly payment on.
I've been lead to believe that DCA buy cc debt for about 5-10p in the £
Just before the hearing the DCA solicitor said they would accept a 65% discounted lump sum payment to clear the debt - unfortunately I wasn't in a position at the time to come up with this kind of money.
Now, as I'm in a position to borrow of a relative, when I remind them of the previous offer they don't want to know and keep offering me settlement discounts of 25-30%.
Is there any way I can get someone (court, FLA or FOS) to enforce the 65% discount that I was once offered?
As for trying to get them to accept a final settlement of 10-20% of the amount outstanding - that seems like pie in the sky.
I have a cc debt with MCS which, after them taking me to court for an order for sale on my house, which the court refused, I'm making a regular monthly payment on.
I've been lead to believe that DCA buy cc debt for about 5-10p in the £
Just before the hearing the DCA solicitor said they would accept a 65% discounted lump sum payment to clear the debt - unfortunately I wasn't in a position at the time to come up with this kind of money.
Now, as I'm in a position to borrow of a relative, when I remind them of the previous offer they don't want to know and keep offering me settlement discounts of 25-30%.
Is there any way I can get someone (court, FLA or FOS) to enforce the 65% discount that I was once offered?
As for trying to get them to accept a final settlement of 10-20% of the amount outstanding - that seems like pie in the sky.
If the debt collection agency has bought the debt then they'll be able to accept a much lower settlement, at least 50% of the balance should not be hard to get. Trying to pay lower than that may take longer/be slightly more challenging.
If they are just collecting on belhalf of the creditor then they will have guidelines in place as to what they can accept as settlement as pert of the contract, just ask them what they will accept and make an offer from there.
Depending on where the account is in the 'collections cycle' will depend how low a settlement they will be willing to accept, if it's recent then low settlement may be harder to come by, but if it's been ongoing for a while then they'll pretty much take anything.
General consumer debt is rarely sold for more than 10p/£
If they are just collecting on belhalf of the creditor then they will have guidelines in place as to what they can accept as settlement as pert of the contract, just ask them what they will accept and make an offer from there.
Depending on where the account is in the 'collections cycle' will depend how low a settlement they will be willing to accept, if it's recent then low settlement may be harder to come by, but if it's been ongoing for a while then they'll pretty much take anything.
General consumer debt is rarely sold for more than 10p/£
JB8 said:
If the debt collection agency has bought the debt then they'll be able to accept a much lower settlement, at least 50% of the balance should not be hard to get. Trying to pay lower than that may take longer/be slightly more challenging.
If they are just collecting on belhalf of the creditor then they will have guidelines in place as to what they can accept as settlement as pert of the contract, just ask them what they will accept and make an offer from there.
Is the agency obliged to tell the debtor whether they're collecting on behalf of the original creditor or if they've bought the debt?If they are just collecting on belhalf of the creditor then they will have guidelines in place as to what they can accept as settlement as pert of the contract, just ask them what they will accept and make an offer from there.
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