What is a Full and Final Settlement Offer?

A Full and Final Settlement Offer is an offer of partial repayment to your creditors in the form of a one-off lump sum payment in return for having the remainder of your debt written off. A Full and Final Settlement Offer is a suitable strategy to clear your debts if you have access to a lump sum of money. This could be from:

  • Savings
  • Remortgaging your home
  • An Equity release scheme
  • Third-party donation from your friends or family
  • Redundancy
  • An inheritance or Lottery win
  • The sale of assets such as property, investments, or works of art. It is important that any items you sell are not “essential items” such as a car if it is necessary for your work, or essential household items such as beds, cookers and fridges.

Why would my Creditors accept a Full and Final Settlement Offer?
There are a number of reasons why creditors will accept a full and final offer.

  • It avoids legal expenses. If a creditor were to make you bankrupt, a large portion of the lump sum would be swallowed in legal fees. Furthermore, any legal action would not guarantee repayment anyway.
  • Your creditor may prefer to receive one lump sum payment now, than smaller payments over a longer period.
  • Depending on your personal circumstances, your creditor may realise that you will be unable to pay any more than the lump sum offered.

Simply call us on 0800 783 5650 or complete the Quick Enquiry form on the right to discuss your situation with a trained advisor.

What are the Advantages of a Full and Final Settlement Offer?
The advantages of making a Full and Final Settlement Offer includes:

  • If your offer is accepted, it would mean that you would pay less than you would otherwise have to.
  • Your debt will be paid off sooner, and you can make a fresh start
  • Your creditors should then mark your debt as “Satisfied” so that future searches on your credit file will show that you have successfully dealt with your debt.
    Clearing your debt may improve your credit rating

What are the Disadvantages of a Full and Final Settlement Offer?
The disadvantages of making a Full and Final Settlement Offer includes:

  • You may need access to a lump sum which could be used for other purposes
  • Once your creditors know that you have access to a lump sum, they may demand full payment of your debt.
  • It is not guaranteed that your creditors will accept your offer.
  • Clearing your debt will not remove any Default Notices or CCJs previously taken against you from your record. They will remain on your credit file for 6 years from their point of entry

How do I make a Full and Final Settlement Offer?
You may have a lump sum that you need to divide up amongst several creditors. Kensington Financial Management Consultants part of The Money Advice Group can advise you on how to fairly divide this to creditors on a pro-rata basis. We will act on your behalf and send your offers to all your creditors. No creditor will be paid unless an offer is agreed in writing.

Call us on 0800 783 5650 or complete the Quick Enquiry form on the right to discuss your situation with a trained advisor.

What happens if a Creditor does not accept my Full and Final Settlement Offer?
Kensington Financial Management Consultants part of The Money Advice Group has years of experience in dealing and negotiating with creditors on our clients’ behalf. However, we cannot guarantee that your offer will be accepted. If this is the case, we will advise you on the next best course of action, depending on your circumstances.

Can I make a Full and Final Settlement Offer if I am in an IVA or Debt Management Plan?
Yes. Kensington Financial Management Consultants part of The Money Advice Group can help you make a Full and Final Settlement Offer, whether or not you are currently in an IVA or Debt Management Plan (If you are in an IVA a different approach to the offer may be required). Furthermore, even if your IVA or Debt Management Plan is with another company, we may still be able to assist.

Call us on 0800 783 5650 or complete the Quick Enquiry form on the right to discuss your situation with a trained advisor.