Offering full and final settlement with insurance claim payout

[Banana]

Hi

It’s my first time posting here.

I have defaulted on 3 credit cards and for nearly 2 years have an agreement with the companies to pay token payments of £1 each a month. My debts have not been sold to any debt collection agency and are with the credit card companies under 6 monthly reviews. I’m currently off sick as I was diagnosed with cancer in the summer of 2019 and I’m still receiving treatment. I’m receiving benefits. I’m a single mother of 4 children. My accumulated debts stand at around £16000. I’m now due a payment from my critical illness cover which amounts to around £18000 (if they pay out). I also have £3000 o/s with HMRC for which I have a payment plan of £250 a month and I intend to pay in full.

As I’m on no fixed income and on benefits and disability I need the insurance money to cover certain expenses. (I don’t have a house or any other assets). I’m intending to ask the credit card companies to enter a full and final settlement. Because I need the insurance money for day to day living and would also like to go in a holiday with my kids I don’t intend to pay all the debts in full.

I know this is morally wrong (so no lectures please). I’m not sure where I stand from a legal view point. Do I need to tell the credit card companies where I will receive the money from to settle the debts and do I need to send them proof of how much I have received? Or can I tell them a relative is giving me the money to pay it off and tell them I’m receiving a smaller amount than I actually have? If I have to proof to them how much I get, will I still be able to pay in instalments will I have to pay the full debt back at once?

Thanks so much in advance.

[The Tech Clerk]

Diana Mayhew

[The Tech Clerk]

start a diary for each debt as then we can get the right situation :-

Type of account -
Date commenced –
Approx balance -
Date last paid –
Are you on arrangement or not paying –
Status –
Account owner –

[Joanna Connolly Solicitors]

. I’m currently off sick as I was diagnosed with cancer in the summer of 2019 and I’m still receiving treatment. I’m receiving benefits. I’m a single mother of 4 children.

. . . I need the insurance money for day to day living and would also like to go in a holiday with my kids I don’t intend to pay all the debts in full.

I know this is morally wrong (so no lectures please). I’m not sure where I stand from a legal view point.

Hello

It’s definitely not morally wrong to put you and your children first. I’m sorry you’re having such a difficult time at the moment.

Before you decide whether or not to make any F & F payments let’s take a look at your debts to get a better understanding of the situation. Some creditors have a department which deals with people in vulnerable situations including health issues.

When did you open the accounts and who with?

Your insurance payout will be because of your anticipated needs due to illness, so paying debts may have to take a back seat for a while.

I look forward to helping you.

Di

[Night Monkey]

It’s definitely not morally wrong to put you and your children first

Very much this. Nobody on this forum will judge or lecture, we've all been there. And in fact I still am :-)

You're in the right place to receive the help and advice you need, good luck and know that empowerment is a wonderful thing.

[ca71]

Very much this. Nobody on this forum will judge or lecture, we've all been there. And in fact I still am :-)

You're in the right place to receive the help and advice you need, good luck and know that empowerment is a wonderful thing.

I'd like to echo this. You are doing the right thing!

[Banana]

Thank you so much everyone for all your kind and encouraging words ?. I will get all the info together this weekend and post it as soon as I have it.

[Joanna Connolly Solicitors]

I will get all the info together this weekend and post it as soon as I have it.

I hope you are now feeling ready to take the plunge with these three credit card debts.

This forum will help you to take back control of the situation.

Just keep reminding yourself it’s a legal argument not a moral argument.

Di

[Timewilltell]

Hi Banana, I just want to echo what others have said, there is no higher moral than that of your health and your family.
As Diana has pointed out debt is not a personal thing at this stage it is a legal thing. If moral is your question then ask yourself this: is it morally right to lend to someone, charge them an interest on something that doesn’t exist and then tell them it’s their debt?? It’s a deep argument I know but sadly most miss the reality of it.

be assured in the knowledge of those on here that you will have your eyes opened, avoid the torment and be able to carry on living your life how you want too.

So please do complete your diary to allow us to help you to help yourself.

[Joanna Connolly Solicitors]

If moral is your question then ask yourself this: is it morally right to lend to someone, charge them an interest on something that doesn’t exist and then tell them it’s their debt?.

That’s a good question, especially if the perceived ‘debt’ is then sold to a debt purchaser for 10% of the book value, and then they (debt purchaser) chase the debtor for the full amount which the original creditor may have written off against tax.

And so on.

Di