Struggling with debt? Ask a debt adviser a question

Firefly · 24 July 2017 at 7:01PM

I'm paying back, albeit slowly, a very old debt that's with debt collectors. I've paid reliably and consistently for many years. However for some reason this debt doesn't show on my credit file. I'm in a position where I can make an offer of full and final settlement for the last few hundred pounds but I'm reluctant to do that if it then places the debt onto my credit file.

Does anyone know if this will happen?

Should I offer a reduced amount or pay it all to keep it clear?

Advice welcome.

StepChange_Kirsty · 25 July 2017 at 10:27AM

Hi Firefly,

Thanks for your post.

If the creditor sent you a default notice when the account first fell into arrears they will have put a default marker on your credit file. This default mark and any details of the debt will automatically fall off your credit file 6 years from the date it was entered.

Based on you saying you've been paying the debt for a number of years, it sounds like this is what may have happened. This means that whilst the debt still exists, details of it should no longer be shown whether you now pay it off in full or by way of a full and final settlement if that is accepted by the creditor.

I hope this helps.

Kirsty

Firefly wrote: »

I'm paying back, albeit slowly, a very old debt that's with debt collectors. I've paid reliably and consistently for many years. However for some reason this debt doesn't show on my credit file. I'm in a position where I can make an offer of full and final settlement for the last few hundred pounds but I'm reluctant to do that if it then places the debt onto my credit file.

Does anyone know if this will happen?

Should I offer a reduced amount or pay it all to keep it clear?

Advice welcome.

Fraise70 · 29 July 2017 at 12:15AM

Hi there,

I've cancelled my D/D for my DMP with SC this month as decided to self manage..but I'm filled with anxiety. I've managed to set up token payments for two debts via Cabot and over the phone with them. I have around 9 more creditors to contact. I'm going to offer token payments to all as I have no emergency fund, some arrears with priority debts and will probably end up working part time next year so want to clear priorities and save some money.

I'm reading that it might be better if you have defaults rather than agreements to pay which can stay on your credit file indefinitely? I have around 13k of debt, am 47 have no pension and no savings. I realise I should be putting everything in writing so am looking for the right template letters to send re. token payments.

Can anyone advise re. self managed debt and any pitfalls please..

Former_StepChange_Linsi · 29 July 2017 at 9:56AM

Hi

Thanks for your post and welcome to the forum.

I’m sorry to hear you’re feeling anxious about dealing with your debts directly. If you’re struggling to maintain your DMP payments or if you don’t feel this is the best solution for you, then I’d recommend getting in touch and speaking to an advisor.

We’ll be able to review your budget to make sure your priority arrears and essentials costs have been accounted for. We can then talk about the best way forward to make sure you’re getting the help and support you need. You can find our contact number here.

Should you decide to deal with your debts directly you can find more information about which bills to pay first on our website. There’s also more information about arranging payments with creditors directly along with template letters you can use.

The record of a debt will be removed from your credit file 6 years after the default was registered or after partial or full settlement. Guidance agreed by the credit industry and the Information Commissioner’s Office confirms that in normal cases an account would be expected to default after 3 to 6 months of arrears for most debt types.

If you’ve been making reduce payments (even through a DMP) for a while, then your accounts may have already defaulted. You can look at your credit report to check this or speak to your creditors directly.

I hope this helps.

Linsi

Fraise70 wrote: »

Hi there,

I've cancelled my D/D for my DMP with SC this month as decided to self manage..but I'm filled with anxiety. I've managed to set up token payments for two debts via Cabot and over the phone with them. I have around 9 more creditors to contact. I'm going to offer token payments to all as I have no emergency fund, some arrears with priority debts and will probably end up working part time next year so want to clear priorities and save some money.

I'm reading that it might be better if you have defaults rather than agreements to pay which can stay on your credit file indefinitely? I have around 13k of debt, am 47 have no pension and no savings. I realise I should be putting everything in writing so am looking for the right template letters to send re. token payments.

Can anyone advise re. self managed debt and any pitfalls please..

Mattbah · 29 July 2017 at 3:16PM

Hi
Could someone help please
I took a unsecured loan on 2003, period of 5 y, paid for 4 years, something happened and left the country for 10 years , was some left on the loan when I left when I back I started a new bank and built up again every thing was fine till last week I saw my credit rating went down from good to bad , so after I researched I found out the loan company I had a loan 14 years ago put marker on my credit
Please could some one tell me what can I do????

StepChange_Allen · 31 July 2017 at 4:30PM

Mattbah wrote: »

Hi
Could someone help please
I took a unsecured loan on 2003, period of 5 y, paid for 4 years, something happened and left the country for 10 years , was some left on the loan when I left when I back I started a new bank and built up again every thing was fine till last week I saw my credit rating went down from good to bad , so after I researched I found out the loan company I had a loan 14 years ago put marker on my credit
Please could some one tell me what can I do????

Hi there

Thanks for posting.

From what you've told me, if this was a loan regulated by the Consumer Credit Act then it could be statute barred now and shouldn't be showing on your credit file either.

Companies should default accounts (terminate the credit agreement) after around 3-6 months of arrears, and add a default onto the credit file then. This should disappear after 6 years, whether the debt has been paid or not. In addition, if during your time abroad there were no payments made, or written acknowledgment of the debt then it would be legally unenforceable (statute barred).

So if the debt has been defaulted in the last 6 years when it should have sometime in 2007, I'd complain to the creditor and ask for it to be removed. For more information on statute barred debt, please visit www.stepchange.org and type 'statute barred' into the search. The article that contains a template letter to send to the creditor claiming the debt is statute barred.

I hope this is helpful.

Allen

rt72 · 2 August 2017 at 11:55AM

I wonder if someone could offer me some advice please.
Background
About 5 years ago I realised I was getting into financial difficulty (due to a reduction in income and effectively living off credit cards). After doing many of the wrong things - borrowing more, cashing in and spending savings plans I realised things had to change

I was getting very stressed and anxious and turned to one of the companies who said that could wipe out a card for a fee if it was taken out before July 2007 (I had one such card with the Halifax and after some research got sucked in to the service - I was desperate and there was ~£15k on the card.)

All seemed to go OK and after about a year the card disappeared from my credit file. In the meantime I got some better advice and contacted Payplan - what a relief that was!

After doing an I&E we were advised that we should offer token £1 payments to our other creditors (a total of ~£30k). We've continued to pay the £1 /month to all but the Halifax card as our circumstances continue to be difficult.
About 18 months ago 1st Credit ( the now owners of the Halifax card debt) got in touch to say they wanted the money. I checked and discovered the debt had resurfaced on my credit file)
I did the merry dance on CCA etc the whole time saying that the debt had been re-assigned to the company mentioned above - I've since discovered they've gone bankrupt and there's a separate action against them)
The eventual info I got from 1st Credit re my agreement seems more or less in order (i.e. it looks like it would be enforceable)

To and fro’s have continued, I’ve not accepted the debt nor paid any money – last payment on the card was August 2012 – though credit file incorrectly says Mar 2013.

I now have a letter from 1st Credit’s solicitors saying if I don’t pay or make a suitable offer “… we are instructed that our client may issue court proceedings for [full amount] together with a claim for interest and court fees.”
My question
I see 3 options:
- Continue to try and stall them (I’m not sure if I could get to the stage of Statute barring – about Oct/Nov 2018 by my calcs)
- Accept the debt - thus restarting the limitation clock - and offer them the same token payment (£1/month) everyone else is getting
- Approach friends/ family to assist in a possible "without prejudice" F&F – Ideally I would only want to do this if I could make an offer to all creditors to try and clear everything – given the age and length of time it would take to pay back (any other way) I’m hoping I could agree around the 20% mark (Barclaycard offered me 30% 3 years ago on their card)
Which, if any of these, is my best option, or is there an alternative?
Thanks in advance

Former_StepChange_Linsi · 2 August 2017 at 1:00PM

Hello,

Thank you for getting in touch today and welcome to the forum.

1st Credit may be more likely to take further action and apply for a county court judgement (CCJ) if the debt is close to becoming statute-barred. This is because a CCJ doesn’t have a limitation period, so cannot become statute-barred. For this reason I wouldn’t recommend ignoring the debt or trying to stall 1st Credit.

Making a token payment to 1st Credit would allow you to treat all of your creditors fairly. This way they’ll be less likely to take further action against you. Making token payments isn’t a long term solution to manage debts. So if you’ve been making £1 payments for a while now, and you don’t think your situation will change I’d recommend getting back in touch with PayPlan or use our online Debt Remedy tool to see what other options are available to you.

Should a friend or family member be able to give you a lump sum to pay off some of your debts then it would be best to make a settle offer to each of your creditors. The amount to offer to each one would depend on the lump sum available. There is more information about making settlement offers here on our website.

If you decide to write a letter marked ‘without prejudice’ to 1st Credit it will only inadmissible as evidence in a court case if it meets the following criteria:

1. The letter is disputing liability for the debt
2. The letter includes an offer of part-payment in full and final settlement or an offer to negotiate a settlement

If the letter doesn’t meet these two conditions, then it is admissible as evidence, even if you write ‘without prejudice’ on it. You can also find more information about statute-barred on our website.

I hope this helps.

Linsi

rt72 wrote: »

I wonder if someone could offer me some advice please.
Background
About 5 years ago I realised I was getting into financial difficulty (due to a reduction in income and effectively living off credit cards). After doing many of the wrong things - borrowing more, cashing in and spending savings plans I realised things had to change

I was getting very stressed and anxious and turned to one of the companies who said that could wipe out a card for a fee if it was taken out before July 2007 (I had one such card with the Halifax and after some research got sucked in to the service - I was desperate and there was ~£15k on the card.)

All seemed to go OK and after about a year the card disappeared from my credit file. In the meantime I got some better advice and contacted Payplan - what a relief that was!

After doing an I&E we were advised that we should offer token £1 payments to our other creditors (a total of ~£30k). We've continued to pay the £1 /month to all but the Halifax card as our circumstances continue to be difficult.
About 18 months ago 1st Credit ( the now owners of the Halifax card debt) got in touch to say they wanted the money. I checked and discovered the debt had resurfaced on my credit file)
I did the merry dance on CCA etc the whole time saying that the debt had been re-assigned to the company mentioned above - I've since discovered they've gone bankrupt and there's a separate action against them)
The eventual info I got from 1st Credit re my agreement seems more or less in order (i.e. it looks like it would be enforceable)

To and fro’s have continued, I’ve not accepted the debt nor paid any money – last payment on the card was August 2012 – though credit file incorrectly says Mar 2013.

I now have a letter from 1st Credit’s solicitors saying if I don’t pay or make a suitable offer “… we are instructed that our client may issue court proceedings for [full amount] together with a claim for interest and court fees.”
My question
I see 3 options:
- Continue to try and stall them (I’m not sure if I could get to the stage of Statute barring – about Oct/Nov 2018 by my calcs)
- Accept the debt - thus restarting the limitation clock - and offer them the same token payment (£1/month) everyone else is getting
- Approach friends/ family to assist in a possible "without prejudice" F&F – Ideally I would only want to do this if I could make an offer to all creditors to try and clear everything – given the age and length of time it would take to pay back (any other way) I’m hoping I could agree around the 20% mark (Barclaycard offered me 30% 3 years ago on their card)
Which, if any of these, is my best option, or is there an alternative?
Thanks in advance

MG123456 · 8 August 2017 at 9:38AM

Hi. I have about 6.5K of debts. These are from credit card and loan from Halifax and payday loan from Zopa.

I earn just about enough money to get me out of my overdraft each month after paying my rent, car finance, car insurance, bills, petrol and food for my family.

I simple don't have any spare money to pay these loans and I'm looking for what's best for me?

Worst of all my wife doesn't know about this either. I simple can't bring myself to tell her but things are getting worse and worse. We have 2 young girls and we know money is really tight and live month to month.

1) my car is on finance with ford, I have never missed a payment and I can't afford to loose my car. My job is 30 mins away and I start at 6am from my little village there are No buses till later on.

2) we privately rent and again I have never missed a payment. Would the landlord need to know?

Thanks.

StepChange_Allen · 8 August 2017 at 12:50PM

MG123456 wrote: »

Hi. I have about 6.5K of debts. These are from credit card and loan from Halifax and payday loan from Zopa.

I earn just about enough money to get me out of my overdraft each month after paying my rent, car finance, car insurance, bills, petrol and food for my family.

I simple don't have any spare money to pay these loans and I'm looking for what's best for me?

Worst of all my wife doesn't know about this either. I simple can't bring myself to tell her but things are getting worse and worse. We have 2 young girls and we know money is really tight and live month to month.

1) my car is on finance with ford, I have never missed a payment and I can't afford to loose my car. My job is 30 mins away and I start at 6am from my little village there are No buses till later on.

2) we privately rent and again I have never missed a payment. Would the landlord need to know?

Thanks.

Hi there

Welcome to the forum and thanks for posting.

I'm sorry to hear that things are tough at the moment but we'll definitely be able to help you find a solution to get things under control. We'd need to get a detailed picture of your financial situation first, so to get started, details of how to register with us are here: www.stepchange.org/Contactus

If you're up to date with your rent and stay that way, there shouldn't be an issue with your property. Some debt solutions could possibly have an impact but we can discuss this once when you get in touch and make sure you're happy with whatever we recommend.

If a car is essential for work, you'll be able to keep that car or get another whatever debt solution you choose, so don't worry about that. Again we'll talk about this in more detail when we see what your options are.

I hope this is helpful and that we hear from you soon.

Allen

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