If you have debt then you can try and negotiate a settlement figure with your creditors to pay a lump sum which is less that your original debt.

Normally   full and final settlement offers are made by using saving or even borrowing  the fund from friends and families.

How  to make full and final settlement offers?

If you have multiple creditors then your lump sum needs to be divided amongst them by means of pro rata payments. The higher debt should receive the highest amount and the, lowest debt would receive the lowest amount.

To be able to calculate which creditor receives what amount you would need to use the following formula

Creditor n

For example  you owe a total of £20,000 to 4 creditors.  You owe:

£6,400 to Credit card company
£2,200 to a store card
£7,000 to a loan company
£4,400 to the bank.

You are able to pay £8000.

Using the formula, we have:

£8,000 (lump sum available) x £6,400 (debt to credit card)

= £51,200

÷ £20,000 (the total amount you owe)

= £2,560 (your offer to your credit card company)

You then do the same calculation for the other creditors, which will give you the following overall result (in table form).

OFFERS TO CREDITORS BASED ON A FULL AND FINAL SETTLEMENT OF £800

CREDITOR                          DEBT           FULL & FINAL OFFER

Credit card company          £6,400            £2,560

Store Card  Company        £2,200            £880

Loans Company                 £7,000            £2,800

Bank  Overdraft                  £4,400            £1,760

Total                                   £20,000          £8,000