Full & Final Settlements

If your circumstances are such that you have received a significant amount of money, perhaps from an inheritance or a redundancy payment, then even if the lump sum doesn’t cover your debts it might be possible to make one payment to your creditors which the creditors would regard as a final payment and write any remainder off. This is known as a ‘full and final settlement’.

Full and final settlements – things to consider

It’s sometimes possible to pay a creditor a lump sum of money in settlement of your debt, perhaps if you’ve been left money in a Will or have been unfortunate to experience redundancy. Perhaps even if you’ve had a lottery win!

With the right negotiation, creditors may accept a part-repayment of the debt and in return will agree to write off the remaining balance, leaving you with a fresh start free from debt.

Do all creditors accept full and final settlements?

Not necessarily. A full & final settlement should be considered a relatively rare debt strategy, and usually a creditor will only accept a final payment if the debtor is of limited means or of diminished circumstances, therefore suggesting that there is only a small chance of recouping the full debt under normal circumstances.

The uncertain nature of full and final settlements means that to stand the best chance of succeeding in such an offer, it’s a good idea to get specialist help to approach your creditors on your behalf. A third party such as Payplan can work with you and then present a detailed case for your full and final settlement offer.

Thinking about a full & final settlement?

A full and final settlement offer to your creditors should be approached with care, but if successful it will enable you to enjoy a fresh start.

Not right for you? Read about other debt solutions that may suit you better: Trust Deed, Sequestration, Debt Arrangement Scheme (DAS), Low Income, Low Assets (LILA), Buy-To-Let Mortgage, Bridging Loan, Remortgage, Debt Management Plan, Self-Managed Arrangement, Equity Release, Debt Consolidation Loan.