Full and Final Advantages and Disadvantages

What are the advantages and disadvantages of making a Full and Final Offer?

Advantages

1. A large portion of your debt written off. If the creditors accept your offer, you will pay less than you would otherwise have to if you were to repay the full amount of the debt.
2. The debt will be paid off more quickly and easily than if you were to repay the debt over a longer term.
3. Providing that your creditors agree to your offer, it offers you an immediate chance of a fresh start.
4. It should provide your creditors with a more attractive option than applying to make you bankrupt, due to the fact that in bankruptcy a large percentage of the lump sum would be swallowed up in legal fees.
5. Creditors should inform Credit Reference Agencies that the balance has been paid off in full.
6. Clearing debt may improve your credit rating.
7. Allows you to remortgage in circumstances where there isn't enough equity available to clear your debts, but consolidation is required to secure the lending

Disadvantages

1. You need access to a lump sum which could be used for other purposes, such as to pay other debts, or which could have been used to avoid the need for obtaining credit in the future.
2. Your creditors must agree to your proposed arrangement. Your offer will only be accepted when your creditors have agreed, and they are not legally bound to do so.
3. We cannot guarantee that creditors will accept lower settlements
4. 4. If your creditors do not accept your offer in writing then there is a chance that they might chase payments at a later date.
5. 5. Once your creditors know that you have access to a lump sum, they may not accept your offer and may take enforcement action against you to recover the all of the debt.