Question:

If I make an offer of settlement, does this or could this be interpreted as admitting responsibility of the debt?

I am on sickness benefit and will be for the next 5 years at least. A friend has offered me £500 just to get the Abbey out of my hair and reduce my stress levels.

What are the chances of them accepting £500 against a £11,000 shortfall?

It goes against my principals but the thought of peace of mind does appeal to me!

M

-- too scared to say (Anderston828@aol.com), August 26, 2002

Answers

I reckon that 5% is about the minimum lenders will accept (from observation of postings from those who have settled). I would suggest that you offer to make a 'goodwill' payment of say, £400, but make it clear in your letter that in no way do you acknowledge their claim (assuming that they have not satisfied you with strict proof). Obviously they can cause you ongoing credit problems as long as they wish to maintain a claim against you, so the money you are offering is a compromise gesture on your part to allow them to withdraw without doing so emptyhanded. My theory is that lenders want closure as much as we do, but they 'need' to be seen to 'win' even if this is a small amount of money. Be prepared to get an initial rejection and a counter proposal much higher than you would wish to go. Consider then making a 'final' goodwill offer of 5% (£550) on the same terms ie no acceptance of their claim, and make it clear that if they won't accept then you still require them to prove their claim (list outstanding information /questions you want answered etc..) A friend recently successfully settled with the Halifax by following this strategy. Good Luck

-- Gordon Bennet (arsenewhinger@hotmail.com), August 27, 2002.

How long do you have to wait before you can make a full and final offer?

I mean if the case is just new to the debt collector or solicitor I am sure they won't be willing to negotiate straight away.

My case has been passed onto the debt collectors about 4 months ago, and am wanting to make a full and final offer, is it too soon, or will they still want the full amount back?

-- Bal (baljinder_gill0@hotmail.com), August 27, 2002.

I think that you would need to demonstrate to the lender that you are going to want full proof of their claim by means of a SARN and asking pertinent questions about the way they have handled the repossession. Each case is different so it is difficult to generalise, but the experience of my friend was closure after about 12 months of correspondence, mainly with the Halifax rather than their agents such as DLC. I don't know whether or not you would be wise to try making 'full and final' offers at this stage. Their likely response would be one of assuming they could get you to pay more. My friend refuted their claim on a number of grounds, but principally the issue of MIG payout as simple not specialty debt. I'm still not clear as to the effect of the recent appeal court judgements on this issue, but it seemed to be one the Halifax wished to avoid testing several months ago. The key to most of the advice on this site is be patient, remain courteous, but insist that the lender gives full information to substantiate their claim. My friend did not fill in an I&E form and her 'goodwill' payment was about 5% of the now withdrawn shortfall claim.

-- Gordon Bennet (arsenewhinger@hotmail.com), August 28, 2002.