Full And Final Settlement Offers. Free Advice. StepChange (2024)

A settlement offer shares out the lump sum fairly among all of your debts.

Not all lenders accept partial settlement offers.

They are more likely to if:

• You cannot afford to pay them back in a reasonable amount of time or
• You may never be able to pay them back in full

These are the steps to follow:

1. Work out what you can offer the people you owe

2. Send your offer to them in writing

3. Ask them to confirm they accept your offer in writing

• Do not send money until you get a confirmation

4. Keep any letters your creditors send you about the settlement offer

• You may need them again
• We recommend keeping them for at least six years after you pay the settlement amount

5. Negotiate with your creditors if you need to

• Some may not accept your settlement offer
• You may have to talk to them individually
• It may be that none of them accept it

6. Make sure you send on time payments to the people you owe

• Keep proof of payment

Use our template letter to offer a partial settlement to your creditors.

It depends on what you can afford.

Your full and final settlement should offer equal amounts to each creditor.

For example:

• Your lump sum is 75% of your total debt
• You should offer each creditor 75% of what you owe them

Debts included in a partial settlement are marked as ‘partially settled’ on your credit file.

• This means the debt was cleared for less than the full amount
• It could make it harder to get more credit

It is removed from your credit file six years after:

• It is partially settled, or
• The date it defaults (if earlier)

Debts included in a full settlement are marked as either “satisfied” or “settled” depending on if the account defaults.