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Full and Final Settlement Offers

If you haven't already had previous advice, it is highly recommended that you answer all of the questions on our Debt Options page which will help you decide which option to follow. You should carefully consider all options before deciding to continue further.

If you have any doubts, you should get full, independent, professional advice.

Explanation (including Advantages and Disadvantages)

Resources

Further information on how to continue

If you have an available lump sum of money or may have access in the future then a creditor may accept or consider an offer of an amount less than which is actually due as early settlement.

The above is particularly likely if you have little or no available income, no substantial assets and your financial situation is unlikely to improve or even worsen. In such circumstances creditors are likely or may recognise that acceptance of a cash lump sum makes commercial sense.

If you have more than one creditor any lump sum should usually be distributed between them in proportion to the amount owing to each (pro-rata). Making proportional settlement offers/ payments would not make the arrangement legally binding see below for information on making the arrangement legally binding.

Is a Full and Final Settlement legally binding?

There will be a legally binding agreement if either

How to Make Full and Final Settlement Offers

Sample Letters

This letter is designed to help you negotiate a full and final settlement offer with a creditor. This is a type of offer where you ask the creditor to accept part of the amount you owe and write off the rest.

This letter is designed to help a third party negotiate a full and final settlement offer with a creditor. This is a type of offer where a third party asks the creditor to accept part of the amount you owe and write off the rest.

Forums

Forums can be useful for asking questions and also seeing that other people are going through the same things as you. You will have to sign up to them to post new messages but can read them without.

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