About settlement offers

A settlement offer is where you offer the people you owe money to, known as creditors, a one-off payment to clear your debt with them.

We offer a settlement service. If you have enough funds, we can contact your creditors and arrange full repayment of your debts.

If you do not have enough to clear your debts in full, we can ask them to accept lower amounts to settle your debts. We call these ‘partial settlement offers’.

Some creditors may accept a lower amount than what you owe and write off the rest of the debt. They are more likely to accept this if it would take you a long time to repay them.

If your creditors agree to the offers, we will manage your payments to them.

Things you need to know about settlement offers

• Debts can be written off
  If the people you owe money to accept your partial settlement offer, they will write off the rest of the debt
• Debt collection will stop
  Debt collections stops once creditors accept the offer and receive your payment
• No fees for settlements
  Our settlements service is free to you
• We make the offers to your creditors for you
  We contact your creditors and arrange payment

Please be aware:

• Where the offer is less than the full amount owed, creditors do not have to agree to accept and to settle the debt
• While working to make a settlement offer, creditors can still add interest and charges. They may also continue to collect the debt

How does it work?

We suggest you use the value of your assets to try to settle your debts. You can check the value of assets in your personal action plan.

We can speak to your creditors about this and make your payments to them.

We do not charge a fee for this service. All the money will be used to pay your debts.

What are the benefits of making settlement offers?

• If your creditors accept the offers, they will write off the rest of your debt
• Our settlements service is free of charge
• We make the settlement offers to your creditors on your behalf

What are the risks of making settlement offers?

If you pay a reduced settlement, your credit file may indicate that the debt has only been 'partially settled' or 'partially satisfied'. This can remain on your file for up to six years, and it may be harder to obtain credit in the future.

• Creditors may not agree to write off any of your debt
• Interest, charges and debt collection may continue while we make your offers
• If you pay a partial settlement, your creditors may mark your credit file as 'partially settled' or 'partially satisfied'. This can show for up to six years. It may be harder to obtain credit in the future

What types of debt are included in a settlement offer?

You can make settlement offers on your unsecured debts.

Your important payments, known as priority payments, require full repayment.

What types of debt are not included in a settlement offer?

You cannot make partial settlement offers for these:

• Secured debts, such as mortgages
• Secured loans
• Hire purchase on vehicles

You must also keep up with the regular payments on your priority bills, such as:

• Mortgage or rent
• Ongoing council tax and rates
• Water, gas and electricity bills

How do I go ahead with this solution?

Before we talk to your creditors, you need to have the money available.

Please make sure this is the right option for you before you sell or cash in any assets.

Settlement offers are not guaranteed. Please talk to us before selling any assets.

Once you have the funds available, let us know. We can then help you settle your debts.

Talk to our settlements team

When you choose to go ahead with this solution, we will contact you to arrange a telephone appointment.

In this appointment we will talk about how to settle your debts.

We will manage this from start to finish, and keep you updated.

Send us your details and money for your settlement offers

We will tell you how to send your information and make the payment. We cannot make any offers until we receive your payment.

We will hold the money you send for your settlements while we speak with your creditors.

The money is covered by the Financial Services Compensation Scheme while we do this. The scheme can pay you compensation if we cannot meet our financial duties.

You can find out more by visiting the FSCS website.

We will contact your creditors

We will contact your creditors about settling your debts. If you do not have the funds for a full repayment we will ask them to accept their share of the money you are able to pay.

Our team will keep you updated on the responses we receive. If you are happy to go ahead, we will send the payments to your creditors.

Check the value of your assets

When you choose to go ahead, you need to be sure of the value of your assets before you sell or cash them in.

Once you know their real value and when the money will be available, contact us. We will work with you to settle your debts.

You may not be able to raise as much as you think. Contact us anyway.

Together we can understand the options for dealing with your debts.

Tell your creditors you’re getting our help

Tell the people you owe money to that you are getting our help

Contact your creditors, give them your StepChange client reference number, and tell them you are getting help from us.

They will usually stop their debt collection process while you think about your options.

It’s quickest to give them a call. But if you prefer, you can email them or send a letter. However, it could delay them stopping any action.