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Debt Settlement

Here at Galahad & Co., we understand the stress that debt can place on household finances. Making debt repayments each month can hold you back from achieving important life goals such as getting on the property ladder, getting the job you really want and taking holidays. Living in the shadow of debt can also have a devastating impact on your mental health.

A consumer reading the credit agreement for their credit card.

If you think you’re ready to think about making a debt settlement, we can help you to decide if this is the right option for you. We carefully examine your individual situation and circumstances before providing expert advice and recommendations. We cut through the jargon with simple, practical help so that you fully understand your rights and responsibilities and put you back in control of your finances.

If you’re looking for a debt settlement law firm  that puts people first and always has your best interests at heart, you can count on us.

What does debt settlement mean?

Debt settlement means paying a final lump sum to your creditor to resolve your debt. The amount you end up repaying is usually less than the amount you owe.

How debt settlement works

If you come into money unexpectedly or if you make money from selling an asset, you might want to use the proceeds to clear your debt. You may even have managed to put some money aside from your regular income which means that you can pay off the money owed in full and become completely debt free.

We know that paying off debt in full is unachievable for many people, particularly if you don’t have much spare income each month, the great news is there are other ways to settle debt and other options to help you become debt free. A good idea if you are trying to pay off debt is to make a full and final settlement offer. This is an offer to partially repay the debt you owe, with your creditor writing off the rest of the balance.

If you have multiple creditors you will have to negotiate with each one individually. You may find that some creditors are willing to take a partial repayment and others are not. The amount that each creditor will accept may also vary.

You do not need to settle all of your debts just because you are able to make an offer on one. How to allocate your money is your choice and you can always negotiate with all of your creditors at the same time to see which debts you can afford to settle.

Generally, creditors are more likely to accept a debt settlement if it would otherwise take you a long time to pay off all your debt. The old saying holds true here that “time is money”. If you are making small payments to your creditors each month you will likely find that they are happy to accept even a low sum in full and final settlement.

Ask yourself: would you rather someone paid you £300 over 3 years (less than £9 per month) or £100 tomorrow? Your answer is likely to be the same as your lender’s…

Other factors which may affect what sum your lender will settle for include:

  • The age of the debt
  • How much you have already paid
  • If the debt has been sold to a debt collector
  • Your employment status and available income
  • Your personal and family circumstances
  • If the debt is subject to a CCJ

It is important to know that you can still make an offer, even if the debt is subject to a CCJ. Although a court judgement in effect guarantees that you will have to pay the full amount eventually, if you can only afford small payments towards the balance your lender may well still accept an offer.

It can be difficult to decide how much you should offer to pay, and impossible to work out what your creditors will accept before you ask them, but you should never agree to repay more than you can afford to pay. Here at Galahad & Co., we can give you advice about how to negotiate a settlement that works for you.

When is debt settlement a good idea?

If you receive a financial windfall, such as an inheritance fund, lottery winnings or proceeds from a legal settlement, or if you make money by selling an asset such as a vehicle or property, making a debt settlement may be a good option as it can free you from the burden of monthly repayments.

It is particularly a good idea to pay off debt if you are still being charged interest on the amount outstanding.

In addition, making a debt settlement may be necessary if you plan to take out a loan such as a mortgage. This is because you may be required to settle or fully repay any unpaid debts in order to meet the lender’s criteria for providing a loan.

Even if you have the money to settle your debt this is still a decision you should take carefully. You should weigh up the impact of the outstanding debt against any other options you have for this money which will have a positive impact on your life, such as buying a more efficient car; paying costs of family life; or investing in some professional training.

If you do not have enough money to settle all of your debt, you will need to decide which debt(s) to pay with the funds that you have. When you are making this decision you should take into account things like which debt is likely to get the biggest discount when you make a settlement offer and what each debt is costing you. For example, it might be a good idea to pay off debt with a high interest rate such as credit cards and short term loans, rather than using this money to pay off lower interest borrowing such as your mortgage or longer term debt.

One final consideration which will likely influence your decision to make a debt settlement offer is whether you are going to need this money in the near future. This may sound obvious, but it is often tempting to stretch funds and make settlement offers which you can’t afford in the long term. If you find you need the money again you may have to resort to further borrowing which is also likely to be very expensive (you may not get a good interest rate if you have only recently settled your other debts).

Our practical advice would always be not to decide too quickly. If you have the money to make an offer why not wait a few weeks? Speak to your lender, tell them what you’re thinking and what your plans are, but ask for some ‘breathing space’ to consider your options (ask that they freeze any interest during this period). A few weeks will usually give you some good time to consider this carefully and to come to the right decision for you and your family.

Can a debt settlement affect my credit score?

The decision to make a debt settlement should not be taken lightly, whilst the impact on your credit report may be an important consideration, you should make sure you are taking all factors into consideration.

Credit reporting is not an ‘exact science’ and it can be very difficult to predict the impact on your credit score that settling debt may have. Although paying off debt should be a positive thing, sometimes making partial debt repayments can have a detrimental effect on your credit score.

If your account has already been defaulted, or terminated, then making a partial settlement payment will mean that this account is marked as a “partially satisfied default”. This will still show on your report for six years from the date of default, although it is marginally more positive than an outstanding default report.

However, it’s important to note that making partial settlements is better than missing monthly repayments or not paying your debt off at all.

At Galahad & Co., we can help you analyse your situation, weigh up the pros and cons and help you decide if making a debt settlement is the best option for you.

Get professional advice

When it comes to repaying debt, it’s important to get expert and affordable legal advice. Before committing to anything, including debt settlements, let Galahad & Co. help you determine what you really owe and whether or not your creditors can prove what they want you to pay is accurate. After all, if creditors cannot provide evidence to support the amounts they claim you owe, you have a right not to pay and should not part with a penny. By challenging irresponsible lending practices, Galahad & Co. have saved our clients over £3 million.

We believe in justice for consumers. If we think that you have been the victim of irresponsible lending practices, we will ensure that you don’t pay your creditors a penny more than you have to.

Where lending practices are legitimate, we can help to identify a debt solution that’s right for you.

To find out more about debt settlement or any of our services, you can contact us by phone on 0330 124 4252 or email us at Our experts provide free, no-pressure consultations. You won’t have to pay us until you have fully assessed your circumstances and established that we can achieve success for you. We also guarantee that we will reduce your debt by the amount you pay to us in fees at the very least.

Are you ready to assert your rights?

In situations where you may have been struggling to meet debt repayments and have missed payment deadlines the company with whom you took out the debt will often sell it on to a third party who will then, using a variety of techniques, chase you for the outstanding amounts.


“Freed from over £70,000 of debt in just 1 year! The whole process was easy… Galahad & Co. gave me the chance to finally be debt free.
A huge relief.” – Angela Kelly

"Galahad & Co. gave me the chance to finally be debt free. A huge relief.”

“We in debt are vulnerable. Galahad & Co. put an end to years of stress and sleepless nights with creditors looming over me.
Excellent and very personal service. Recommend them heartily!” – Raheela Salim

“We in debt are vulnerable. Galahad & Co. put an end to years of stress and sleepless nights with creditors looming over me."

“I cannot explain the deep relief you feel when your debt has disappeared.
There are no real words to say thank you when you have been set free.” – Susan Yeo

"There are no real words to say thank you when you have been set free.”

“I’m so glad I found Galahad & Co.! For 15 years I was struggling in debt management and going nowhere.
Thanks to Galahad & Co., I was completely freed from over £250,000 of debt in just one year!” – Luke Thomas

"Thanks to Galahad & Co., I was completely freed from over £250,000 of debt in just one year!"

“This changed my life! Galahad & Co. sorted all my debts and gave me back my life. I’ll be forever grateful.” – Mrs Thomas

Galahad & Co. sorted all my debts and gave me back my life. I’ll be forever grateful.

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