A guest post from money-blogger Emma Drew about how she dealt with...
Full and final satisfaction – from StepChange Debt Charity
We often get asked about how debts get settled early. This happens when some money suddenly becomes available to our clients. It usually comes from family members, unexpected inheritance, an insurance pay out or a successful payment protection insurance (PPI) claim (find out here how to reclaim PPI for free).
If you’re a StepChange Debt Charity client and have some extra funds, give us a call. We may be able to make an offer to your creditors to settle your debts. There is no charge for our “full and final settlement” service.
How do full and final settlement offers work?
Previously if clients came into some unexpected money, they had to write to each creditor, making individual offers. This was a complicated process and clients could find themselves in difficulties, paying too much to clear one debt and not having enough left to clear another. There was also always the danger that the creditor could chase what remained of the debt later.
If you work with our Settlements team, you don’t need to negotiate with your creditors. We do that for you. All we ask for is:
- the most recent balance on the debts
- details of the total amount you have available to offer.
Then we can work out what percentage you should offer for full and final settlement.
Our new settlements team
The settlements team is one of the newest at our charity but it’s staffed by some of our most experienced debt advisors. They speak to creditors on the client’s behalf and make settlement offers based on what funds are available.
We have contacts at all the major creditors which means we are well-placed to decide how much to offer creditors in full settlement on our clients’ behalf. We don’t negotiate as such, but we will listen to any counter offers from creditors and report these back to you and wait for your further instruction.
How much will be written off?
You have probably seen ads which claim to be able to get ‘your debts written off’. These usually refer to IVAs or assisted bankruptcy . A full and final settlement offer means that some creditors will possibly write off a percentage of your debt.
What percentage should I offer for full and final settlement?
We don’t have set figures for what you can offer creditors, indeed the funds sometimes come from a third party like a relative. In some cases we may even refer you for a lump sum IVA if this is seen as a better solution.
Where can I get the cash?
As we said, third parties may offer funds to help you clear your debt. Money could also come from inheritance, redundancy, PPI claims, selling a property or even equity release. There are no fixed figures that your creditors will accept we can only advise you based on funds that you have in place already.
Just be reassured that we’ll make the process as hassle free as possible for you – most full and final settlement cases are completed within 6 weeks. However, we cannot guarantee that your settlement offer will be accepted by your creditors.
Most importantly, this service is completely free of charge.