How does it work?
If you can pull together a lump sum of money large enough to cover most of your debts, you can offer your creditors a 'full and final settlement' – that is, a one-off payment that writes off the rest of what you owe altogether.
You may come by a lump sum of money by selling an asset – such as a property or vehicle – receiving an inheritance, or being given money by family or friends.
If it’s not enough to cover your total debt, you need to work out how much to offer to repay and then put this in writing to your creditors. For instance, if the lump sum you have is 75% of your total debt, you should offer each creditor 75% of the amount you owe them.
However, you may find that not all your creditors are prepared to accept your proposed settlement. In that case, you’ll need to negotiate and try to find a solution that satisfies everyone. Make sure you keep all correspondence involved in your negotiations, just in case you ever need to refer back to it.
The longer it’ll take for you to repay your debts, the more likely your creditors are to agree to a settlement. But in matters like this, it’s a good idea to get advice from a free, independent and expert service like ours.
Get in touch with our team today by calling 0808 164 2480 or filling in our short assessment form.
What to expect
- We’ll use the information you’ve given us on the phone or in your assessment form to establish the nature and urgency of your debt.
- We’ll book you in for a face-to-face appointment at your nearest centre – or a telephone advice session if required – so we can give you a detailed analysis of the help available to you.
- We’ll discuss your options and talk through the pros and cons of each.
- We’ll establish the best possible solution and help you to resolve your debt – whether that’s by means of advocacy, representation or negotiation on your behalf, or by helping you write letters and supporting you throughout the process.
Every year, we help thousands of people to become debt-free.
Debt Free London is a partnership of 26 debt charities led by Toynbee Hall, which provides free, trustworthy advice sessions across London. Our service is funded by the Single Finance Guidance Body (previously Money Advice Service) and we’re authorised and regulated by the Financial Conduct Authority.