What Is A Full and Final Settlement?
A 'full and final settlement' is an offer of partial repayment to your creditors in the form of a one-off lump sum payment, in return the creditor 'writes off' the remainder of your debt.
In order for a full and final settlement to be realistic, you need to have a lump sum of money. This may result from selling an asset such as a property or vehicle, receiving an inheritance, or a gift from family or friends. You are not allowed to take out an unsecured loan for a full and final settlement.
Creditors are likely to accept an offer for a full and final settlement if it's the best possible return they are likely to receive. For example, if the creditor were to make you bankrupt instead, a large percentage of the lump sum would be swallowed up in legal fees.
Pros and Cons of a Full and Final Settlement
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you will pay less if accepted
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pay your debts off sooner
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debts will be marked as 'satisfied' on your credit record
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it's a better option for your creditors than some other solutions
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there is no guarantee that it will be accepted
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you will need access to a lump sum of money
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once your creditors know you have a lump sum of money, they may chase you for full repayment of the debt
Can I Make a Full and Final Settlement Offer if I am in an IVA or Debt Management Plan?
Yes. We can act on your behalf to negotiate the best deal for a full and final settlement offer, whether or not you are currently in an IVA or debt management plan. Just let us know if you have a lump sum, and we'll do the rest.
Further Information
What Is A Full And Final Settlement? Want to know more? Contact us now using the contact form or call us on 0800 988 7701 for no obligation help and advice.
Our full and final settlement is available in the following countries:
In Debt? Dealing With Your Creditors - Must read guide from the Insolvency Service.
