Could you get out of debt more quickly?

Our customers tell us all the time how much they’re looking forward to being debt-free at the end of their Plan. So could you get there more quickly? In today’s post we’re going to look at how Debt Settlement works, and whether it could be an option for you.

What is Debt Settlement?

If you have a lump sum of money available, your lenders may accept less than the full amount you owe them if you can make a one-off payment. So this may be an option for you if you receive a lump sum as a gift, or an inheritance or if you can free up some equity in your property, if you are a homeowner. Once you have paid the lump sum, the lenders you have paid will consider your accounts to be closed.

What are the advantages of Debt Settlement?

Your lenders are likely to agree that you do not have to repay the whole balance of your debt. And once you have completed the settlement, you will no longer owe money to the debts included.

Even better, we’ll deal with your lenders for you throughout the settlement negotiation, just as we’ve done throughout your Debt Management Plan. We’ll handle all the letters and phone calls, and the final payment to your lenders. We’ll tailor the negotiations to you, taking account of your individual circumstances, to try to make you a saving.

Are there any disadvantages of Debt Settlement?

Although we’ve had great successes in the past negotiating settlements with lenders, there’s no guarantee that your lenders will accept a reduced settlement.

After your settlement, your credit rating may show that the debt has been partially settled, rather than paid off in full.

What does Debt Settlement cost?

There are no upfront fees for our service. You’ll only pay a fee if we are successful in negotiating with your lenders. Our fee is 30% of any reduction to the amount you owe (i.e. 30% of the difference between what you owe the lenders and the amount they will accept to settle your debts). It won’t be more than 50% of the amount you have available to settle your debts, and will never be more than £5,000.

Let’s look at an example. If you owe £10,000, but your lenders will accept £8000, your reduction is £2000. Our fee will be £600.

Am I eligible for Debt Settlement?

If you’re a DMP or DAS customer, you’re likely to be eligible for Debt Settlement – if you have a lump sum available. But this option isn’t open to you if you have a DRO, an IVA or if you’ve been made bankrupt.

Will all my debts be included?

It depends whether you have enough funds for a full or partial settlement. If you go for a partial settlement, we’ll help you settle individual debts as agreed with you. In a full settlement, all your unsecured credit debts will be settled. Debt Settlement is not available for some kinds of debt, including...

  • secured debts
  • rent arrears
  • taxes or court fines
  • student loans
  • child maintenance
  • benefit overpayments
  • or utility arrears

  • ...unless these have been passed to debt collection agencies or debt purchasers.

    Do you think Debt Settlement might be for you? If so, give us a call on 0161 393 7190. We’ll put you through to one of our settlement experts to talk through your options with you.

Need expert help with your debts? Complete our form to request a callbackRequest a callback
  • 0161 669 8925
  • 0161 669 8925

Articles home

Top of page

What solutions are available?
Complete the form and our friendly advisor will call you back to discuss the best way forward.

Your total debt?


Just a few more details before we calculate your results

Go to final step
Go to final step

We just need a few more details

Please remember, the form above is just an information tool. One of our advisors will be in touch to answer any questions you may have and offer you more personalised advice on how to resolve your debt problems.
About us

We've been helping people get out of debt for almost 20 years. Read more about what we do and the charities we support.

Read more
Fees & key info

Read more about the fees involved with each of the solutions we provide.

Download the Insolvency Service guide to dealing with creditors.

Read here for information about our Complaints Procedure and referring a complaint to the Financial Ombudsman Service.

Conditions Apply. Repaying your debt over a longer period of time can increase the total amount to be repaid. Your ability to obtain credit will be affected. Fees are payable when continuing service is provided.
Top 5 tips for
beating debt

Read our top 5 expert tips on how to beat debt and deal with your lenders.

Read more