Full and Final Settlements – Pros and Cons - FAQS

If you find you have access to a lump sum of money - from the sale of something of value, for example, or a donation from your family or friends - you might want to consider making a Full and Final Settlement offer to your creditors.

Depending on how much money you have access to, you offer to pay a proportion of what you owe in one lump sum payment, in return for having the rest of the debt written off.

If your creditors agree to the offer, you will make a one-off partial payment to your creditor in exchange of the full settlement of a debt.

Your creditors might accept a full and final settlement for the following reasons:

• It avoids the legal expenses associated with taking you to court which wouldn't guarantee them repayment anyway
• A lump sum payment might be more valuable to them than smaller payments over a longer period of time
• Your financial circumstances might mean that you are unable to pay more than the lump sum offered

Our friendly advisors can give you more information about whether a Full and Final Settlement is right for you. Call today on 0800 690 6853.

FULL AND FINAL PROs and CONs

PROs

• If creditors accept your offer you will pay less than you would otherwise have to
• Your debt will be paid off sooner leaving you debt-free
• Your debt will be marked on your credit file as ‘satisfied’ so future credit searches will show that you have successfully dealt with your debt

CONs

• There is no guarantee that your creditors will accept your offer
• You will need access to a lump sum of money to make the payments
• Once your creditors are aware you have a lump sum of money they may demand full repayment of the debt
• Any defaults or previous CCJ’s will not be removed from your credit record and will remain on your credit file for 6 years from their point of entry.

FULL AND FINAL SETTLEMENTS FAQs

What is a Full and Final Settlement?

When will I become debt-free?

What lump sum of money could I use?

If I make a Full and Final Settlement offer, will my creditors accept it?

Can I use a lump sum to pay off more than one creditor?

Will paying a Full and Final Settlement affect my credit rating?

To find out more about whether a Full and Final Settlement is the right debt solution for you, talk to one of our friendly advisors today on 0800 690 6853.