How Much Will Debt Collectors Settle For? UK Percentages


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For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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Janine Marsh
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Janine Marsh

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My name’s Janine, and I’m a mum of two who’s always been passionate about trying to cut down spending costs. I am now sharing as much financial knowledge as I possibly can to help your money go that little bit further.

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- Financial Expert
Updated 25 August 2023

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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How Much Will Debt Collectors Settle For

How much debt collectors settle for is a common question among debtors, especially the debtors that ask me questions. 

In this post, I’ll explain what a debt settlement offer is, and how to go about one if this is the right debt solution for you. 

Do you have to pay debt collectors?

You might not have to pay debt collectors.

If you genuinely can’t afford your debt repayments then looking into whether you could have your written off might be just what you need. 

If you want to find out whether you qualify for having debt written off or payments lowered then fill out the short form below.


Can you write off any of your debt?

1 of 5

How much debt do you have?

This isn’t a full fact find, Thrifty Family doesn’t give advice. We work with The Debt Advice Service who provides information about your options. 

What is a debt settlement offer (DSO)?

A debt settlement offer (DSO), or a full and final settlement offer, is a proposal to pay a lump sum to your creditor for less than your total debt’s value. 

In return for accepting the lump sum, the creditor must write off the remainder of the debt so you won’t make any further monthly payments. 

How does a DSO work?

A debt settlement offer is intended to benefit both the debtor and the creditor. 

By offering to pay part of the debt off in a lump sum payment, the creditor receives more of the money back quicker. But in return, any remaining money owed on the debt is written off for good.

Full and final settlement offers can be made to creditors or to debt collection agencies after the collection agency purchased the debt from the original creditor. 

Companies that do this are also called debt-purchasing businesses. They buy debt for less than its value and chase debtors for payment to make a profit. Lowell Debt Collection is a well-known example of a debt collection agency that also operates as a debt purchaser. 

Can you lower your repayments?

If you’re struggling to pay back your debt, then you might qualify for a debt solution.

Some solutions lower your monthly payments while others write off a portion of your debt


To find out whether they could work in your situation, hit the button below.

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Why would creditors accept less?

You might be wondering why a creditor would be willing to accept less than the total debt owed, and it’s a good question! 

A creditor might be more willing to accept less if it believes you won’t be able to repay the full amount owed in a reasonable time, possibly due to a recent change in personal circumstances. 

The creditor probably won’t want to chase you for payments or take legal action, so they might accept a lesser amount to get as much as possible with fewer issues and recovery costs.

However, credits chasing priority debts might be less agreeable to accept a full and final settlement offer. This is because creditors chasing priority debts typically have an easier time making you pay the full amount.  

Debt purchasing companies are often the most likely to accept a full and final debt settlement offer. These companies purchase the debt for much less than its original value, sometimes as low as 25%. So, they can still make a healthy profit on any reasonable debt settlement offers. 

Who will usually try to settle a debt?

Debtors who are struggling to meet the repayments on single or multiple debts will usually consider making a full and final debt settlement offer

However, debt settlement is just one of many ways to deal with debt. You should always consider all the debt solutions applicable to you, preferably by getting free debt advice from a debt charity first.

There could be other ways to deal with your debt and write off some of the money owed in the process!

Should I work with a debt settlement agency?

Debt settlement companies are businesses that offer to help people make a full and final settlement offer to creditors. This service is also available through companies called debt management companies. 

You can choose to submit a debt settlement offer using these services, but they usually charge fees. And you might have to pay even if your debt settlement offer is rejected.

Can I negotiate a debt settlement myself?

Yes, you can negotiate and submit a debt settlement offer yourself. But you can also get advice and support from Citizens Advice and some UK debt charities. 

Benefits of DIY debt settlement

The benefits of doing a DIY debt settlement offer are:

  • You don’t have to pay any fees to make your offer
  • The process is usually quicker as you don’t need to wait for a consultation etc
  • You can still get advice and support from debt charities
  • There is no evidence to suggest that using a debt settlement service will always get you a better outcome

Downsides of DIY debt settlement

The downside of a DIY debt settlement offer is that you will have to negotiate directly with all creditors yourself. This can be especially daunting to some people.

Although some debt charities might speak with creditors on your behalf, so there could be a way around this problem. 

How to make a settlement offer

When making a debt settlement offer, most debtors have only one thing in mind, which this forum user puts bluntly:

How to make a settlement offer

Source: https://forums.moneysavingexpert.com/discussion/comment/67702216#Comment_67702216 

But making the debt settlement offer isn’t just about picking a percentage of the debt you’re willing to pay as a lump sum and hoping the creditor accepts. It’s about showing the creditor that you’re making a reasonable offer based on your financial situation. 

Therefore, when making a settlement offer you should provide the creditor or debt purchaser with a copy of your budget, highlighting income and expenses, including other debts you have to pay. 

They may also request to see evidence, such as a copy of your latest bank statements and recent payslips. 

How likely is it that my offer will be accepted? 

The chances that your debt settlement offer is accepted will depend on:

  1. What percentage of the debt you’ve offered to pay as a full and final settlement
  2. Whether you’re judged to have made a reasonable offer based on personal circumstances
  3. Whether the debt is a priority debt or non-priority debt

The likelihood of the offer being accepted depends on these two things, but also on the creditor or debt purchaser and how they usually handle these offers.

Do creditors have to accept a debt settlement offer?

No, creditors don’t have to accept any debt settlement offer. But they are encouraged to be reasonable.

Do debt purchasers have to accept a debt settlement offer?

Debt purchasing companies don’t have to accept a debt settlement offer, but they’re encouraged to look at offers reasonably. 

What percentage of the debt will collectors settle for?

Unless you’re in financial difficulty, debt collectors and creditors will expect you to offer at least 70% of the debt as a lump sum. If you have financial difficulty, you may have a much smaller offer accepted which differs based on individual circumstances. 

Will debt collectors settle for 20%?

The only time a debt collector or creditor will accept 20% of the debt as part of your offer is if you prove you cannot offer any more. Even then, they’re not obligated to accept the debt settlement proposal.

Will debt collectors settle for 30%?

Debt collectors are only likely to accept a 30% debt settlement offer if you’ve proven that this is the best offer you can make and any other creditors have been offered a 30% offer as well. Then again, they’re still not forced to accept. 

Will debt collectors settle for 50%?

It’s possible that a 50% debt settlement offer will be accepted, but only if you show that this is the best offer you can make. But as always, the creditor doesn’t have to accept any debt settlement offer. 

What percentage should I offer to settle debt to multiple creditors?

When making a debt settlement offer on multiple debts, StepChange strongly recommends that you offer to pay the same percentage of the debt to all creditors

For example, if you offer to pay 75% of one debt, then you should offer to pay 75% of all the other debts as well. 

When should I pay the settlement amount?

Only pay your lump sum after receiving written confirmation that your debt settlement offer has been accepted. Don’t pay the money if you’ve only been given verbal confirmation.

Without written confirmation that the offer was accepted, the creditor could claim that they never accepted your offer but they might still be able to keep your money as a debt repayment.

This is why it’s so important to get it in writing first!

Does a DSO harm your credit score?

When a debt settlement offer is accepted and paid, it gets recorded on your credit file as a partial settlement. It somewhat harms your credit rating because you were unable to repay the debt as initially agreed. 

On the other hand, using a debt settlement offer might have prevented other events that would have damaged your credit score even more. 

Can I remove settled debts from my credit report?

The quick answer is unfortunately no. Settled debts remain recorded on your credit score, so you won’t be able to have them removed unless there is an error. 

How long does settle debt stay on my credit file?

Partial settlements remain on your credit score for six years.

Is it better to pay in full or offer a settlement?

Using a full and final settlement offer might save you money, but it will also affect your credit rating. 

If you’re not expecting to apply for credit in the following years, including applying for a mortgage, you may be better off using a settlement offer to pay less and clear the debt. But it really depends on individual circumstances. 

Personalised and professional debt advice is recommended. 

Should I keep evidence of my lump sum payment?

Yes, always keep evidence of the creditor accepting your debt settlement offer in writing, and keep evidence of your lump sum payment. 

How long should I keep my payment evidence for?

You only need to keep evidence of your payment for six years. But there is no harm in keeping evidence of your payment for as long as possible, 

What happens if a debt settlement offer is rejected?

If your debt settlement offer is rejected, you can return with a better offer immediately or later. 

But this in itself could cause a problem. If you previously stated that the debt settlement offer was your best offer, but then improved the offer quickly after getting the first offer rejected, it may look like you’re not being reasonable. 

It could suggest that you were initially withholding your best offer and therefore lying to the creditor, so they might not be as open to negotiating. 

Instead, you may need to consider one of the many other effective debt solutions, such as a Debt Management Plan (DMP), Debt Relief Order (DRO) or another solution. 

My creditor has proposed a full and final settlement offer, what should I do? 

Sometimes it’s creditors that propose a full and final settlement offer instead of debtors. 

This may be due to:

  1. The creditor knows you have had a windfall
  2. The creditor has financial issues of its own and needs to raise capital quickly
  3. The creditor is aware of your situation and believes the offer will recover more money than if you used an alternative debt solution

One person asked this question online:

My creditor has proposed a full and final settlement offer, what should I do

Source: https://forums.moneysavingexpert.com/discussion/1965105/what-has-been-your-best-offer-on-full-settlement-amount-on-debt 

And some of the responses were interesting. Some responders claim that they had been offered debt settlement offers for much less than 50%.

But should you accept? This depends on your situation. It’s best to get personalised debt advice to learn how the offer compares to other debt solutions available to you. Debt charities will help you compare all avenues out of debt for free. 

How much debt collectors settle for (Quick summary)

Creditors and debt collectors that have bought your debt don’t have to accept any debt settlement offer, but they are encouraged to react to offers reasonably. 

They could all have different policies on what percentage of the debt they will accept, but most importantly they will want to see:

  1. Evidence that you’re making a reasonable offer based on your financial circumstances
  2. All other creditors have been offered the same percentage of the debt within the offer

“It will only get worse” 😩

It’s cliché to say, but with debt it’s true; the longer you leave it, the worse the problem gets

There are straightforward and effective ways to deal with debt, but you have to know your options. 

Fill out the short form to find out about the debt solutions that could reduce your monthly payments or even write off some of your debt.

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My name’s Janine, and I’m a mum of two who’s always been passionate about trying to cut down spending costs. I am now sharing as much financial knowledge as I possibly can to help your money go that little bit further.
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How to beat debt collectors
How to beat debt collectors

Looking into debt solutions could help. 

  • Lower monthly payments
  • Reduce pressure from the people you owe
  • Affordable monthly repayments. 
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