Percentage to settle a debt?
May 9, 2011 9:52 AM   Subscribe

Due to a dodgy gym contract situation, my friend has suddenly found out that he owes about 800 euros to his former gym. How much should he offer as settlement of the debt?

I went to our local legal aid equivalent for him today (he doesn't speak Dutch) and got professional advice. (Apparently he got caught in a known scam here, where businesses deliberately catch consumers in neverending contracts, and there's nothing much he can do about it legally). They suggested that he offer a part payment to the 'creditor'. What sort of amount or percentage would be appropriate?

The debt has not gone to collections (he only just heard about it) so he is dealing with the gym directly.

No comments about 'honouring your debts' or anything please, this is not that sort of a situation, but I don't want to get into a derail about the scam as that's not our problem at the moment. Apparently the law will be changed as of 2012, but that is of no help to him in this instance.
posted by rubbish bin night to Work & Money (4 answers total)
I would offer 25% of it (200 euros) and see what they come back with.
posted by amro at 9:59 AM on May 9, 2011

If he's not wealthy you could try offering a payment plan where he pays an amount each month. If it is like English law at all, sometimes companies don't really have a choice but to accept it if it's in good faith. Especially if they're involved in a dodgy scam.

If he had no further contact with the company, what are the chances that they'd actually take him to court? Just a thought.
posted by Not Supplied at 10:48 AM on May 9, 2011

Start with a low ball offer - and see what they say.

Tell them that you have no money, and your credit sucks, so you have little to lose if they send it to a debt collector.

You are going to have to negotiate with them - go back and forth with numbers. They probably have an amount that they will accept. You need to feel them out.

Whatever happens though, remember to get the settlement in writing.
posted by Flood at 11:17 AM on May 9, 2011

Agree with amro and Flood.

Try to find out what kind of loss they'd take when selling to a debt collection agency. Then offer 5% above that, and work your way up from there, very slowly. Whatever you do, don't offer to pay it in full (or anywhere close to full), whether through a payment plan or not. I'd really recommend against a payment plan, though -- they'd probably add in more crooked disclaimers or some shit. Get it over with in one fell swoop.
posted by matlock expressway at 2:14 PM on May 9, 2011

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