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Debt settlements

If you have come into some money, you can use it to clear your debts in full. And if you cannot afford to do that, you can make an offer for part of what you owe and ask for the rest of the debt to be written off.

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There is no impact on your credit score

  England, Wales, Scotland and Northern Ireland

Debt settlements with StepChange

We can help you do this if you have the money available. If you do not have the full amount, we will make offers to the people you owe on your behalf. This takes away the stress and strain of speaking to lots of creditors.

We deal with the people you owe

You don’t need to have the difficult conversations with creditors about settling your debts. We do all that for you.

We have been helping people deal with debt for over 30 years

We have built up strong relationships with creditors over the years. They know who we are and how we work. From banks to local authorities and utility companies and more.

Make fair payments creditors can agree to

We work out what you can afford to pay to all the people you owe. When they understand they have been treated fairly they are more likely to accept the settlement offer.

You make one single payment to us

We take care of all the different payments for your settlements. You just make one payment to us.

No fees for our debt settlement service

All your money goes towards clearing your debt, not paying us. Some companies charge a fee for this service; it is always free with us.

Offers are based on your needs

We won’t leave you short by making you pay more than you can afford. Your settlement will be based on what you need to cover day-to-day.

How do debt settlements work?

Before taking any steps to deal with debt, it is important to find out what your options are. You can do that by getting free and impartial debt advice with us.

  • We look at your income, spending and other things affecting you
  • Together, we build a monthly budget that shows what you can and can’t afford to pay
  • We let you know about different ways to deal with your situation, based on what you have told us

The easiest way to get started is to get debt advice online

You may be able to get this money together by:

  • Selling valuable items, such as a house or a car
  • Inheriting money in someone’s will
  • Being given money by family or friends
  • Using a redundancy or insurance pay out

But it is important you don’t use money you need for everyday spending.

As well as looking at the money you have available, we may also consider other things you are dealing with, based on what you are happy to share with us. Such as, a health condition that may make it less likely for you to repay all that you owe. We will take your steer on this.

Then we put together a settlement offer, that is tailored to your needs and based on what we think the people you owe will accept.

If you are happy with this, we get in touch with them on your behalf and handle the negotiations.

What is the difference between ‘full balance’ and ‘partial’ settlements?

Full balance settlements:

  • You pay enough to repay what you owe in full
  • The debts are marked as ‘satisfied’ on your credit file

Partial settlements:

  • You pay an amount of the debt which is less than the total owed
  • The creditor writes off the rest of your debt
  • It is marked as ‘partially satisfied’ or ‘partially settled’ on your credit file

Hear what our clients say

"Thank you for the stellar work you have done in guiding and supporting me throughout this process. It’s incredibly stressful navigating the journey to settle debts with creditors, and I cannot overstate just how much it helps to know you have someone on your side fighting your corner."

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We will need you to send the money for your partial settlement before we submit offers

How do you help me settle my debts?

Whether you are new to StepChange, or we are already helping you, we can look into your options with you.

I am new to StepChange

Get debt advice first to find out if settling your debts is the right thing for you to do.

The easiest way to get started is to get debt advice online

After you have started your debt advice:

  1. Get in touch with the people you owe to let them know we are helping you
  2. Ask that they give you some time to deal with your situation. They may agree to pause debt collection for up to 30 days
  3. Cover payments to your ‘priority debts’. Find out which debts you should pay first
  4. Make sure you can access the money you will use for your settlement
  5. Make sure the account numbers, balances and creditor details for your debts are up to date
  6. Have information ready about where the money for your settlement has come from

When you go through debt advice with us, please list your settlements money as ‘Savings’.

We will then check whether settlements are right for you at the moment.

If this right for you now, you will see this listed as one of your options when you complete your advice. We will pass on your details to our settlements team, who will be in touch with you. It is up to you to decide if you would like to go ahead.

You are already helping me

  • You can get in touch with us at any time to let us know you are able to settle your debts.
  • Once you have made sure you have the money to do this, contact us. We will refer you to our settlements team

You will need to:

  • Make sure you can access the money you will use for your settlement
  • Make sure the account numbers, balances and creditor details for your debts are up to date
  • Have information ready about where the money for your settlement has come from
  1. Carry on making payments to your solution as normal
  3. Make sure your budget is up to date. If you are on a debt management plan, you can do this through OnlineDMP or follow our guides to making a budget
  4. Make sure you have access to the money you will use for your settlement
  5. Have information ready about where the money for your settlement has come from

Benefits of partial settlements

  • If your creditors accept the offers, you will clear or reduce your debts
  • Our settlements service is free of charge
  • We make the settlement offers on your behalf
  • Your debt will be easier to manage, being cleared or lower
  • If you are not paying the full amount owed, your creditors may accept and consider writing off the rest you owe
  • You can clear or reduce the debt quickly if you have the money available to do this
  • Before you accept the offers from your creditors you can change your mind and have the money returned to you

Risks of partial settlements

  • Your creditors may not agree to write off any of the interest and charges
  • It can take time to contact creditors and get their response
  • Debt collection may continue while we are discussing the settlement offer with your creditors
  • If you make a partial settlement, the people you owe may mark your credit file as ‘partially settled’ or ‘partially satisfied’
  • This can show for up to six years. It might make it harder to obtain credit in the future

Ready to find out how you can deal with your debt?

We help hundreds of thousands of people each year by finding the right ways to sort out their debts. The easiest way to get started is to use our online debt advice tool.

Get online debt advice now

What people ask us about settling their debts

It depends on your situation. But if you have the money available it can be a good way to move on from your money worries.

  • If you are able to pay what you owe in full: This will clear your debt
  • If you are able to pay part of what you owe: This can help make your debts easier to deal with

There is no simple way to answer this, other than to say, it depends on what is right for you.

You may see people saying a certain amount (or percentage) is the right amount to offer. Take that with a pinch of salt. There is no guideline. We will advise you based on your needs.

It is important that all your creditors feel they are being treated fairly. If you pay more to one of them, others may not agree to your offer.

We will work this out for you.

It might be a good idea, but you will need the money available to do this. Creditors will not accept an offer based on future funds that might not appear.

Keep paying what you can and getting help with your debt for the time being.

We create the settlements offer, based on your needs, and send them to your creditors. The offer will always be produced in a way that we think it will be as easy as possible for the creditors to accept.

We wait for their responses and look into different ways to deal with what the creditors are asking for.

We always discuss this with you first. You always have the option to:

  • Withdraw your offer
  • Make a counter offer

Once everything is agreed we transfer the funds.

We will need to check the source of the money, in line with Anti-Money Laundering laws.

Depending on where your money has come from this means you may need to share:

  • Sales or payment receipts from sales of valuables
  • Wage slips
  • Confirmation of redundancy payments
  • Solicitor’s letters, to confirm an inheritance
  • Details of friends or family members who have given you the money

Debt happens. We deal with it.

We have helped millions of people since 1993.

Find out how.

"I can’t believe we can finally put this to bed and not have to worry anymore."

"I know we’ve said this time and time again but having you and Stepchange helping us get through this made such a difference. Our stress levels and anxieties about how we would manage while I wasn’t working were so reduced with all the help and advice we received. It was amazing. So once again, thank you so much!"

StepChange settlements client

FSCS logo

While we hold your money, it’s covered by the Financial Services Compensation Scheme, which can pay compensation if we’re unable to meet our financial obligations. You can find out more on the FSCS website, www.fscs.org.uk.