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Offers in full and final settlement


Offers in full and final settlement means asking your creditors to let you pay a lump sum instead of the full balance you owe on the debt. In return for having a lump-sum payment, the creditor agrees to write off the rest of the debt.

You may be able to do this because you have some savings you can use for example. 

You normally write a letter to the creditor to make an offer in full and final settlement.

The creditor, if they accept the offer in full and final settlement, should confirm this in writing. Always make sure you keep a copy in case there is a dispute. This could happen years later and you may need the letter as proof.

Never send a lump-sum payment before the offer is accepted.

Make sure the creditor agrees in writing to change your credit reference file to show that the balance has been paid and the date this happened.

If you have a lump sum that you need to divide up amongst several creditors, the usual way of doing this is to make ‘pro-rata’ offers. This means that each creditor gets a fair share of the money you have available.  The creditor you owe the most to will get the biggest share of the money and the creditor you owe the least to will get the smallest share.

You can find a debt help provider to help you with offers in full and final settlement on