If I offer a settlement to a Debt Collector, am I admitting a debt?

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ee58

Member
7 December 2019
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I have rather large debts (~4-5 years old) that I'm unfortunately unable to pay.
In another year or so the debts may be stature barred.

To resolve the matter quickly I'm thinking of offering a lump sum payment to Debt Collector who purchased the debts.

I can only offer to pay about 10% of the debts.
Is this a reasonable/acceptable amount?

By making a settlement offer, would I be admitting the debt?

If the debt collector refuses my offer, would the 6 years limitation period start again from this date?

Is it possible to make an offer in such a way, so as not to be admitting the debt at the same time?

Thanks
 

Atticus

Well-Known Member
6 February 2019
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By making a settlement offer, would I be admitting the debt?

If the debt collector refuses my offer, would the 6 years limitation period start again from this date?
From my understanding, any acknowledgement of the debt resets the statute barred period
 

Scruff

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25 July 2018
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Q1 - Whether an offer is reasonable or not is up to the creditor. A 10% lump sum? My guess is that the creditor will think you can pay a lot more than that if you enter into a payment plan, therefore 10% is unlikely to be seen as either realistic or reasonable - but that's just my opinion.

Q2 - Making an offer to settle a debt would be seen by the creditor and courts as an acknowledgement that the debt exists. Even if you don't state it, offering a settlement "implies" your acknowledgement.

Q3 - Atticus answered this one. The statute of limitation would begin again from the date you make the offer and the same would happen with any subsequent offer.

Q4 - You can't offer to settle a debt without acknowledging that the debt exists - to do so is a contradiction. You need to remember that both parties have rights and what you're asking here, is to negate the creditor's rights while maintaining your own. Things don't work that way.

Note that my opinions relate to "making an offer to settle". There may be other ways for you to find out if the creditor will accept what you're thinking. You should seek professional advice on that.
 
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ee58

Member
7 December 2019
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Note that my opinions relate to "making an offer to settle". There may be other ways for you to find out if the creditor will accept what you're thinking. You should seek professional advice on that.
Thank you. What other ways are there to find out if they can accept it? Do you know?
 

Scruff

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25 July 2018
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Like I said, you need professional advice on that so that you don't inadvertantly reset the statute. You really need to speak to financial advisor to find out what your options might be.
 

ee58

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7 December 2019
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Just read about the meaning of 'without prejudice' (below)
If I make an offer with those words ('without prejudice') would this mean that I don't acknowledge the debt?

I know I would likely need legal advice as to how this applies to my situation but generally speaking, would any lawyer on the forum know if this may or may not be the case?


The without prejudice (WP) rule will generally prevent statements made in a genuine attempt to settle an existing dispute, whether made in writing or orally, from being put before the court as evidence of admissions against the interest of the party which made them. One reason for having the WP rule is the public policy of encouraging parties (or potential parties) to litigation to settle their disputes out of court. The rationale is that settlement discussions (and, it is hoped, settlement itself) will be facilitated if parties are able to speak freely, secure in the knowledge that what they have said and, in particular, any admissions which they might have made to try to settle the matter, may not be used against them should the settlement discussions fail.
 

Atticus

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6 February 2019
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If I make an offer with those words ('without prejudice') would this mean that I don't acknowledge the debt?
Yes it will...

Without prejudice is only of value in some court actions to do with a costs application.... Any such offer is still an acknowledgment... I agree with Scruff... I can't see how you can make an offer without acknowledging the existence of the debt.
 

Scruff

Well-Known Member
25 July 2018
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The key point here is that you are offering a "settlement". To be able to make any such offer, there must be an agreement between the parties that there is something to settle in the first place. So again, by making an offer without acknowledging that the debt exists, you are basically saying "I can negotiate but you can't and I don't acknowledge the debt if you don't accept my offer." That line of thinking is not going to hold up in any legal arena. The creditor has rights and you are trying to negate them. It will never work.

In regard to other options, what I mean is that there might be a way that enquiries can be made without acknowledging the debt and without making an actual offer. But this is a legal forum and the best person to answer those kinds of questions would be a financial advisor.

If you really want to pursue this, then you need to do it in such a way that you're not infringing on the creditor's right to negotiate.
 
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Nige123

Active Member
30 April 2020
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Terrible advice all!

For an acknowledgement of debt, the debt must be acknowledged:

  1. In writing; and
  2. Signed by the person making the acknowledgement; and
  3. Recognise the present existence of the debt; and
  4. Admits that the debt is outstanding and unpaid.
A commercial negotiation is not an admission of anything.

Some good reading here...