If you suddenly have access to a lump sum of money, either through a house sale, pension lump sum, inheritance etc., you should consider using this money to settle all of your debts in full. Your creditors will then mark the debt as ‘satisfied’ on your credit file.

If the lump sum of money is not enough to repay all of your creditors in full, then the following alternatives should be considered:

  • You could repay one or more of your debts in full. Reducing the total amount you owe in this way will of course mean that the remaining debts within your debt management plan can be repaid quicker, assuming you maintain the payments to the plan.
  • You can ask your creditors what lump sum they will be prepared to accept in exchange for the writing-off of the remaining balance. This is known as a ‘full and final’ or ‘partial settlement’. You should note that if you settle a debt in this fashion, your creditors may choose to mark the debt as ‘Partially Satisfied’ on your credit file. Again, you can settle some or all of your unsecured debts in this fashion and reduce the overall term of your debt management plan.
  • If your creditors decline your partial settlement offer, you can make a lump sum payment towards one or more of your outstanding debts and reduce your outstanding balance.

The advantages and disadvantages of these options are as follows:


  • If you can settle some or all of your debts, whether in full, through the acceptance of a partial settlement offer or via a lump sum reduction in the amount owed, the sooner your debts will be repaid and you can make a fresh start. Any reduction in the overall amount owed will reduce the term of your debt management plan, assuming you maintain regular payments to the plan.
  • If your partial settlement offer is accepted, you will be paying back less than you would otherwise have to.
  • Once a debt is settled, your credit file will be marked accordingly.


  • Your creditors may not agree to accept a partial settlement offer. They may either reject it or ask for a higher amount or demand full repayment of your debt.
  • If you can only afford to pay-off some of your debts, then you will have to consider how to do this as fairly as possible as some creditors may object if the settlement of another debt is favoured above their own.
  • Your creditors are likely to request an up-to-date financial statement when an offer is made. You will also be required to disclose the source of the funds and proof that you have the funds available.
  • Clearing your debt will not remove any Default Notices or County Court Judgements (CCJs) that have been served against you from your credit file. They will remain on your credit file for 6 years from the date they were served. For partial settlements, your creditors may choose to mark the debt as ‘Partially Satisfied’ on your credit file which could have an ongoing adverse effect on your credit rating.
  • If you wish, Money Village can negotiate partial settlement figures with your creditors on your behalf. However we do charge a fee for this, based on the amount the creditor(s) agree to write-off (as detailed in your terms and conditions), meaning you may have to pay more than you would if you dealt with the creditors yourself. 


If you wish to consider the settlement of all or part of your debts, then please let us know and we will discuss the matter with you.