If you’re thinking about making a full and final settlement offer to your creditors, you may be wondering how much is really feasible. Of course you want to pay as little as you can, but you don’t want to make an offer that is rejected outright because you will then find it very difficult to make a new offer that is likely to be accepted.

Part of the deal when making a full and final settlement offer is that your offer is really the final amount you can afford. Your creditor is likely to assume that you may not be telling the truth if you make a second, higher offer after your first ‘final’ offer.

If your debt is quite low, under a thousand pounds for example, you may find it difficult to get a full and final settlement offer accepted that isn’t at least 75% of the total amount owed. With some good negotiation, you could perhaps go a little lower, but it is unlikely that you would be allowed to settle your account after paying only £500. Every creditor is different, however. If you do only have £500, why not make the offer anyway?

If you owe more than a thousand pounds, an offer that is 50% of your total or less is more likely to be accepted. The more you owe, the less you can offer in fact. That is because the higher the debt, the less likely it is that it will be paid back in full in your lifetime. Someone who owes hundreds of thousands of pounds and has no assets at all is very unlikely to ever be able to pay that back, for example. In this case, your creditor may well accept a lot less than 50% of the total.

Every situation is different, but beware of making unreasonable offers as you won’t be able to offer twice!

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