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For individuals, we offer a full review of financial circumstances and advice on the most practical and realistic way forward.
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How final settlement payments can help you avoid bankruptcy
What is it?
When your circumstances are unlikely to improve in the future, creditors may be prepared to accept a lump sum payment in full and final settlement of your debts. The payment is often put forward by friends or relatives on your behalf and the sum offered is less than the total amount owed. If creditors accept your offer they agree to write off the balance of your debt.
Can I offer a Final Settlement?
Final settlements are normally only accepted by creditors when they consider there is little prospect of achieving a greater return through either a scheduled repayment plan or Bankruptcy. Therefore, this is only appropriate if you have no assets and no income by which you can make monthly contributions to creditors.
What are the benefits?
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You potentially avoid Bankruptcy
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Creditors agree to write off part of your debt
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After settlement, creditors stop ringing and writing to you
Are there any disadvantages?
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Negotiations can take some time
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Creditors may continue legal action as there is no court protection (unlike an Individual Voluntary Arrangement)
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Payment normally has to be made within 14 days of acceptance
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