Making an offer for F+F - advice needed

[huskie]

Hi All

I'm trying to clear up my credit file after seeing a few creditors listed with amounts owed and defaults etc.

One in particular is Motormile Finance who I owe £516.25 for an original payday loan with QuickQuid back in 2008.

I started negotiations yesterday and I've negotiated a 50% reduction of the debt. Please see my conversations below:


Sent via MotorMile's online form:

An offer of Payment has been made via the website Details of the offer are below.



Type of Offer: Wish to discuss Amount of Offer: £155 Reference Number: xxxxx

Additional Comment: Dear Sirs

I have recently checked my credit report and there is an outstanding balance of £516 owed to Motor Mile Finance UK Ltd.

I can confirm that I am unable to offer to pay the money which I allegedly owe in full; however I am able to raise £155 and wish to offer this as an ex-gratia payment in full and final settlement of the account.

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 from any liability with no reference or future ability to quote or use Penny v Cole [Pinnel 1602] in trying to recoup any written off balance. I also request that, if accepted, you will mark any entry on a credit reference agency file relating to the above account as \"satisfied\" in full.

Payment can be made within 3 days of receiving your written agreement of this offer and confirmed preferred method of payment. Please reply by email and confirm if you\'re interested in my offer then I\'ll come back to you with more formal terms.

Please note that at this point in time, I will only converse on this matter via email. I can be contacted on: xxxxx

I look forward to your response

Yours faithfully

Their reply:

Dear huskie,

MMF would like help you get your credit score back on track by offering you the following deals:

Offer 1 – You can make a one off payment of £361.38 to clear your account by the 28th September 2013. (Offer includes 30% Discount)

Offer 2 You can clear your account in two instalments of £206.50 First instalment to be made by the 28th September 2013. (Offer includes 20% Discount) Offer 3 You can clear your account in three instalments of £154.88 . First instalment to be made by the 28th September 2013. (Offer includes 10% Discount)

Offer 4 – Pay your balance over 6 months at £86.04 a month. First instalment to be made by the 28th September 2013.

We must make you aware that non-payment of this debt may affect your credit rating and your ability to obtain further credit, or goods on credit, from lenders.

If you would like to take advantage of an offer above and STOP all collections activity please reply to this email immediately.

Yours faithfully

My reply:

Dear motormile



Thank you for your quick response.



As stated in my original correspondence, I am in no position to pay the full amount, nor am I willing to enter into a payment plan over any extended period of time.



While I can not stretch to £361.38 which is what you have listed as ‘Offer 1’ in your correspondence, I am willing to increase my original offer from £155 to £258.13.



This is a one time offer to you while I have the capital available to me for a very short amount of time. This is the maximum amount I am able to pay in total and if it’s not accepted it’s likely my other creditors will receive payment in preference of MotorMile.



I look forward to your response



Yours faithfully

Their reply:

Dear huskie,

Thank You for your email agreeing to repay £258.13 to settle and close this above account.


If you could please supply the details below and I will debit this amount from your account stopping all collections activity:

Name As Shown On Card:
Card Type:
Long Card Number:
Expiry Date:
Last 3 Security Digits:

Payment Amount: £258.13


I look forward to hearing from you.

Thank You



Regards,

My reply:

Dear motormile

Thank you for your response and agreement for the settlement of the account ref xxxx.

I can confirm that I am happy to settle the account today at the amount of £258.13 and will provide you with the requested payment details on the following terms:


* The Default Notice will be removed
* The Status of the account will change from “Defaulted” to “Settled”
* The Current Balance will appear as £0.00
* The Default / Delinquent Balance will be set to £0.00
* There will be no date in the “Defaulted Date” field (as it will be removed)
* There will be no date in the “Date Last Delinquent” field on the report
* This will apply to all 3 Credit Reference Agencies, namely Experian, Equifax & Call Credit
If you’re happy with my proposal, please respond confirming the points listed above and I will submit my payment details by return.

I look forward to your response.

My reply:

Dear huskie,

Unfortunately we cannot make these changes to your credit file.

These amendments would show on an account paid and settled in full.

We have accepted 50% of your outstanding balance to close the account.

This means your credit file will be marked Partly settled/Satisfied.

Thank you

Now then, my concern is that in accepting MotorMile's terms (namely that they won't remove the defaults and that the debt will be marked as only partially settled/satisfied) this will have a negligible affect on my credit file. Am I right to assume that Motormile may also sell on the remainder of the debt to another DCA?

How should I proceed?

TIA
Huskie

[Pixie]

Re: Making an offer for F+F - advice needed

Hi huskie

Your name was left on the final email so I've removed it and replaced it with huskie.

Have you read the sticky at the top of this section?

[huskie]

Re: Making an offer for F+F - advice needed

Hi huskie

Your name was left on the final email so I've removed it and replaced it with huskie.

Have you read the sticky at the top of this section?

Thanks Pixie, I must have overlooked that one!

I have read sticky but it appears MotorMile aren't accepting my offer as F+F settlement. I feel like I may have shot myself in the foot about now as I've already made contact with them to settle and so have rest the clock (another year and it would have been rolled into SB).

I'm wondering how I can get them to remove the default and marking the account as paid in full?

[Pixie]

Re: Making an offer for F+F - advice needed

Thanks Pixie, I must have overlooked that one!

I have read sticky but it appears MotorMile aren't accepting my offer as F+F settlement. I feel like I may have shot myself in the foot about now as I've already made contact with them to settle and so have rest the clock (another year and it would have been rolled into SB).

Ouch! What made you start negotiations now?

I'm wondering how I can get them to remove the default and marking the account as paid in full?

I'm not that well up on F&F settlements but I think you'll find that you can't get them to do this.

[SaltnVinegar]

Re: Making an offer for F+F - advice needed

I have read sticky but it appears MotorMile aren't accepting my offer as F+F settlement. I feel like I may have shot myself in the foot about now as I've already made contact with them to settle and so have rest the clock (another year and it would have been rolled into SB).

Can I ask you why you felt the need to contact them in the first place? You're correct (unfortunately) that as you were 4 years into the SB time limitation you may have shot yourself in the foot. I fear that you now potentially have reset the clock, and also opened a tin of worms in which they will now start 'collection activity'. The only thing I'm not sure about is whether the communication (and method of - email) could be enough for this to be admission of the debt.

I would be tempted to forgetting that you have ever sent those emails, and wait out the SB clock and maybe blag it from there.

I'm wondering how I can get them to remove the default and marking the account as paid in full?

Sorry to be the bearer of bad news here but they won't. The CRA record is data showing the conduct of the account and as long as this is accurate then 99% of creditors won't change a thing. Its exceptionally unlikely that they would remove a default marker unless it was added in error.

If you were hoping that by making a F&F offer they would remove the Default then the best you are likely to get is a note to say it has been satisfied/part settlement (as they have stated).

As for this:

Dear huskie,

Thank You for your email agreeing to repay £258.13 to settle and close this above account.

If you could please supply the details below and I will debit this amount from your account stopping all collections activity:

Name As Shown On Card:
Card Type:
Long Card Number:
Expiry Date:
Last 3 Security Digits:
Payment Amount: £258.13

Good grief - I would not be surprised if you gave them these details (not to mention the fact that they are asking you to provide debit card details by EMAIL - hardly secure is it) that you would find your account emptied of the FULL balance.

Sorry Huskie but I'm not sure what you're trying to achieve here, or where you got advice from to offer F&F settlements on accounts so close to SB, but I'm hoping this is the only one you've used this approach with

[huskie]

Re: Making an offer for F+F - advice needed

Ok.


Thanks for the response SaltnVinegar....


Firstly, I have made no admission that I own the debt - only that it appears on my credit file and I wish to have it removed. I've used the sentence:

"I can confirm that I am unable to offer to pay the money which I allegedly owe in full"

and in doing so have not explicitly admitted liability of the debt in any legal way (as far I can understand).


The reason I'm doing this now is that I have a bit of spare cash and am attempting to rebuild my credit file after having most of my debts roll into SB (about 20k worth). My long term partner is getting twitchy as she would like us to buy a house together which is why I'm making every effort to tie up the remaining loose ends on my credit file and start again with a clean slate (or near as damned it) - she doesn't know of my previous financial history and I want to make sure that a mortgage application won't be rejected in the near future by trying to sort out the bad marks on my credit file while I am in the position to.


As for payment details - no, I wouldn't send them over email! I'm just trying to establish with MotorMile a way of settling the account and would get them to confirm all they have agreed on in a more formal manner before making any payment to them (by cheque).


My original question remains - what impact will a 'partially settled/satisfied' status make on my credit file? will it improve my standing and ability to obtain credit in the near future or is effectively still treated as an account in default?

[SaltnVinegar]

Re: Making an offer for F+F - advice needed

Thanks for the response SaltnVinegar....

Firstly, I have made no admission that I own the debt - only that it appears on my credit file and I wish to have it removed. I've used the sentence:

I can confirm that I am unable to offer to pay the money which I allegedly owe in full"

and in doing so have not explicitly admitted liability of the debt in any legal way (as far I can understand).

Right - but couple of issues with this:

1) You only state that on your original email. All subsequent emails you actually state you are happy to settle the account, which could imply admission the debt exists. Which leads me onto point 2:

2) If the debt is 'alleged' then why on earth would you make an offer of settlement if you were disputing the debt?

My original question remains - what impact will a 'partially settled/satisfied' status make on my credit file? will it improve my standing and ability to obtain credit in the near future or is effectively still treated as an account in default?

Depends on when the default was registered and what other defaults you have on your credit file. Only specialist lenders I'm aware of that will accept Defaults are Aldermore and GE Money (at least so my mortgage adviser tells me), and they will only accept 1-2 Defaults that are older than 2 years and under a certain amount (I think it was £500).

It may be worth you going to an independent mortgage advisor who can do a soft search on your credit record and see if there are any providers who may offer you a mortgage first, before you consider anything else.

The markers on your credit file (if accurate) are going to be difficult to remove. It may be better looking at rebuilding your credit score though other ways (e.g. looking at a low balance credit credit card), so you build a history of repayments.

It'd be worth waiting to see what Niddy says as he is the credit rebuilding master before you write to anyone else incase you inadvertantly do yourself more harm!

If stuff is dropping off your credit file (e.g. will be older than 6 years), I'd also suggest saving a couple more years to build a big deposit which will also make it easier to be accepted by more lenders.

Best of luck

SnV

[huskie]

Re: Making an offer for F+F - advice needed

Thanks again SnV

Additionally, let's say I was able to offer the FULL amount of the 516.25, would I then be able get MMF to remove the defaults from my credit file with a fully settled/satisfied or closed status on the credit file? How would this play out? Would it put me in a better position?

[SXGuy]

Re: Making an offer for F+F - advice needed

the default will stay until it is removed 6 years after the date it was added. The account would also be marked partially settled, so no, the default will not be removed. Its removed, when the data is older than 6 years, thats it.

[huskie]

Re: Making an offer for F+F - advice needed

Just to bump this with a few more questions....


I've been scouring the forum for more information and there's a lot of information to mull over, all of it extremely useful, some of it quite difficult to understand.


What I'm trying to ascertain is what happens to my credit file under 2 different scenarios:




Details of the debt:


Account start date
02/09/2008

Opening balance
£ 516

Repayment frequency
Monthly

Date of default
02/10/2008

Default balance
£ 516

Scenario 1:
I pay 50% of the balance and MMF agrees to mark my credit file as 'Partial settlement/Satisfied'

How does this affect my ability to obtain credit in the near future? Do lenders see a partial payment as negative?
Also, given that the default date is 02/10/2008, let's say I make a partial settlement, will this be registered on my credit file at the date of payment and start another 6 year clock ticking before it falls of my record or will the original default date take precedence?

Scenario 2:
I pay the full outstanding balance

How does this affect my ability to obtain credit in the near future?
Will the defaults be removed from my file? If not, would I be in the position to negotiate for the removal of the defaults on agreeing to pay the full amount?

[SaltnVinegar]

Re: Making an offer for F+F - advice needed

the default will stay until it is removed 6 years after the date it was added. The account would also be marked partially settled, so no, the default will not be removed. Its removed, when the data is older than 6 years, thats it.

Just to bump this with a few more questions....

What I'm trying to ascertain is what happens to my credit file under 2 different scenarios:

How does this affect my ability to obtain credit in the near future? Do lenders see a partial payment as negative?

Also, given that the default date is 02/10/2008, let's say I make a partial settlement, will this be registered on my credit file at the date of payment and start another 6 year clock ticking before it falls of my record or will the original default date take precedence?

How does this affect my ability to obtain credit in the near future?
Will the defaults be removed from my file? If not, would I be in the position to negotiate for the removal of the defaults on agreeing to pay the full amount?

I'm not sure how many times we can say the same thing - A credit file is a record of the conduct of your account. It won't matter an iota whether you pay nothing or pay off the balance in full - the default marker will remain.

It is very very unlikely for a lender to remove a default from your credit file unless it was recorded in error.

Any default is likely to affect your ability to obtain credit if it has been registered in the last 3 years. After this it depends on the lender.

I'll repeat again - the credit data is just a reflection of the conduct of your account. It is the LENDERS scoring system that will determine whether to lend to you or not. Some only look back 3 years, others will look back 6 years.

Most mortgage companies will look back 6 years but if your most recent default is 2008 then that will be dropping off your credit file in a year.

So the answer is it depends on individual lenders criteria as to whether they would view this negatively or not. If its going to drop off in a year then why worry about it unless you are considering getting a mortgage in the next 12 months - in which case do what I suggested above which is go to a good independent mortgage adviser who will be able to tell you who will lend to you.