Settling with creditors

[SA Gold]

Good evening,
Stumbled across this forum whilst looking for advice on current dilemma which is as follows.


My boyfriend has been paying debts on a reduced payment (i believe this to be a "DMP" since reading this forum!) basis for the last 18 months or so. I am about to inherit some money which if the figure is correct, will be about half the debt outstanding.


Answers i am looking for are:


Would this be an acceptable amount to offer the creditors to settle in full?
Assuming they did accept, what impact would "partial settlement" on his credit file have when attempting a mortgage 6 months down the line?


Thanks for reading.
Missy.

[SA Gold]

Re: Settling with creditors

hi,
Thanks for your welcome and prompt reply.
I am reading mixed messages with this credit file business. I guess defaults are bad news, but then partially settled is better than outstanding debt?

[SA Gold]

Re: Settling with creditors

When it comes to mortgages, partially settled won't look any better. The fact that he didn't keep to the agreed terms of the account and defaulted would deter lenders, especially after the credit crunch which was caused by mortgage defaults. Lenders are a lot more cautious now.

I see, so the best possible outcome of all this is to repay in full? (if any credit is required before the 6 year credit file is cleaned - or so i have read somewhere!)

[SA Gold]

Re: Settling with creditors

ah i see. OK well thanks for your help. I'll post back if there is any news.

[Never-In-Doubt]

Re: Settling with creditors

See this - as recent as yesterday

--> Defaults with NO CCA - allaboutFORUMS

Sadly the user chose to take offence and not listen to our expertise

[SA Gold]

Re: Settling with creditors

See this - as recent as yesterday

--> Defaults with NO CCA - allaboutFORUMS

Sadly the user chose to take offence and not listen to our expertise

Just read the thread now. I appreciate your advice on this.
Thanks.

[Never-In-Doubt]

Re: Settling with creditors

The point of my linking there was the elements of the damage any default will have.

Best of luck

[SA Gold]

Re: Settling with creditors

The point of my linking there was the elements of the damage any default will have.

Best of luck

Thanks.
I guess its a matter of thrashing out the best price to settle and begin the 6 year wait...

[Never-In-Doubt]

Re: Settling with creditors

I wouldn't.

I'd send a cca. Stop all payments till a dca buys the debts then make a f&f maybe after 6-12 missed payments. We'd be able to help get you 10-20% deals then.

As you're defaulted you've nothing to lose. Save your inheritance and monthly cash so you'll have a bigger deposit for house whenever the defaults drop off (6 years)....

That's what I would do. Either way it's win-win.

I did get a £25k debt settled for £5k. Plenty can vouch for that

[SA Gold]

Re: Settling with creditors

I'd send a cca. Stop all payments till a dca buys the debts then make a f&f maybe after 6-12 missed payments. We'd be able to help get you 10-20% deals then.

As you're defaulted you've nothing to lose. Save your inheritance and monthly cash so you'll have a bigger deposit for house whenever the defaults drop off (6 years)....

That's what I would do. Either way it's win-win.

You mean request a copy of the credit agreement and check it contains all relevant material as in the link earlier on? I think he would be prepared to do this, but the creditors are from main stream lenders (i can PM you details if you wish!) - so is there any reason in your experience they wouldn't have all the i's dotted, and t's crossed?
I don't disregard this and know where you are coming. A friend used to work for a direct sales company who said many of their customers disputed their products/services and lots of customers stopped direct debits and wouldn't pay when the company wouldn't send them the contract! Apparently, they moved offices and it was estimated two large waste black bags of contracts were lost, or put out for the rubbish in error!
My only concern with this is the added time on top of the already six years to clear, albeit with potential good savings.

When you say about the defaults, on the credit file does it just list "default" on the account - and that's it. I mean, in the sense the original agreement has been broken - opposed to a default every month because its not the correct amount?

[SA Gold]

Re: Settling with creditors

If it's not going to make any difference and you're still going to wait 6 years, why not check whether your accounts are enforceable or not? Take a look around this site, you'll find many are not (i.e. mine ) so we just sit out the 6 years without paying anything... it's worth a try!

Thanks, i am reading the details on it now.

[SA Gold]

Re: Settling with creditors

Thanks for all your assistance so far with this, i do have some concerns ( i do hope you don't see this as being ungrateful)

I am not sure if my BF (will see him tomorrow) has already written to the creditors requesting a balance to settle and guess he would have signed the letters.

Looking at the diaries, there is a lot of letters back and forth and know he would get stressed out from these. Assuming the creditors state their agreement is enforceable, their replies may not be standard and may need Rumpole the Bailey to decipher them!

The time taken to default on the current arrangement, plus transfer of debt collectors and assuming something thought to be non enforceable, is, could turn a 6 year wait in to a 8, or 9 year one.

I guess all the above concerns is a trade off for paying a fraction of the price.

Thanks again for your help on this.

[Never-In-Doubt]

Re: Settling with creditors

Thanks for all your assistance so far with this, i do have some concerns ( i do hope you don't see this as being ungrateful)

Concerns are normal, it's fine and no of course it's not being ungrateful, checking is the best thing to do - especially with something like this (ie debt)...

I am not sure if my BF (will see him tomorrow) has already written to the creditors requesting a balance to settle and guess he would have signed the letters.

The signing bit is fine, some creditors (well moreso the DCA's to be fair) will copy a signature but that doesn't change UE all the time, we look for bigger flaws than a signature.

Looking at the diaries, there is a lot of letters back and forth and know he would get stressed out from these. Assuming the creditors state their agreement is enforceable, their replies may not be standard and may need Rumpole the Bailey to decipher them!

There are a lot of letters, however a few letters a month versus the cost of repaying the monies owed... no brainer really is it?

The time taken to default on the current arrangement, plus transfer of debt collectors and assuming something thought to be non enforceable, is, could turn a 6 year wait in to a 8, or 9 year one.

No. Basically the 6yr default date is set in stone as the date the account was defaulted with the CRA's. So if you're 3 years in already, no matter what you do with the account now will mean in 3 years the default will come off - whether paid or not. Time is continuous from the actual original default date - that date never gets reset. One account = one default. That is it

I guess all the above concerns is a trade off for paying a fraction of the price.

Exactly....

[Never-In-Doubt]

Re: Settling with creditors

My only concern with this is the added time on top of the already six years to clear, albeit with potential good savings.

See above (my last post) - the time does not increase, the default date is set. It will read as a [D] on your bf's credit file. That [D] will last for 6 full years.

When you say about the defaults, on the credit file does it just list "default" on the account - and that's it. I mean, in the sense the original agreement has been broken - opposed to a default every month because its not the correct amount?

See this thread here ---> All About Credit Reference Agencies CIFAS - allaboutFORUMS

Also this post from FP the other day --> allaboutFORUMS - View Single Post - Settling with creditors

[SaltnVinegar]

Re: Settling with creditors

You mean request a copy of the credit agreement and check it contains all relevant material as in the link earlier on? I think he would be prepared to do this, but the creditors are from main stream lenders (i can PM you details if you wish!) - so is there any reason in your experience they wouldn't have all the i's dotted, and t's crossed?
I don't disregard this and know where you are coming. A friend used to work for a direct sales company who said many of their customers disputed their products/services and lots of customers stopped direct debits and wouldn't pay when the company wouldn't send them the contract! Apparently, they moved offices and it was estimated two large waste black bags of contracts were lost, or put out for the rubbish in error!
My only concern with this is the added time on top of the already six years to clear, albeit with potential good savings.

When you say about the defaults, on the credit file does it just list "default" on the account - and that's it. I mean, in the sense the original agreement has been broken - opposed to a default every month because its not the correct amount?

Hi Missy

It is frequently the case that the mainstream lenders have NOT crossed the t's or dotted the i's. In many cases they forget the alphabet altogether! The mainstream lenders became that arrogant that they thought themselves above the law and so have become unstuck.

Like your BF, I also struggled with a DMP for almost 2 years before making a decision enough was enough as some creditors (mainstream too - BOS), kept playing silly buggers and continued sending threatening letters, so I have stopped paying. Its early days yet but so far things are working out fine by playing letter ping pong.

If your BF is uncomfortable in stopping his DMP this is a simple fact:

Your BF is LEGALLY ENTITLED to ask for a copy of his credit agreement for the one pound fee. His creditors cannot refuse to supply it.

If he was really uncomfortable with stopping his DMP, he could send off CCA requests and still maintain his DMP payments.

Alternatively he can stop payments until his CCA requests are fulfilled and make a payment arrangement should they turn out to be enforceable.

He has lots of options - one I wouldn't be taking right now is using that inheritence money to pay of those debts.

The damage has already been done from a credit file perspective, unless his creditors haven't defaulted him yet, hence why Flowerpower posted asking for the information about each account, but if hes been in a DMP for 18 months he should have been defaulted.

If he hasn't then his creditors are (intentionally and maliciously) waiting as long as possible to default him to try to wreck his credit file as much as possible. If this is the case then stopping payments actually forces the issue and stops them playing this game.

Best
SnV