Basic Qs - DMP v Bankrupcy

mr_ice2005

I am currently in a Debt Management Plan with CCCS (since feb 2007).

Credit Cards & Egg unsecured loan currently at £10k
(i have student loans at a further 10k but this is not part of the DMP)

only asset i have is a 3k car.

I have a few Questions and i hope you guys can help:

1) In terms of credit-rating where do i stand with a DMP? I was only offered a very basic cashline card account from RoyalBankOf Scotland soon after i began the DMP.

im thinking if it takes me 3yrs to pay off this debt does that mean i will have atleast 3 yrs of bad credit?

2) Will i continue to have bad credit even after i have paid the debt? If so
how long for? (as i may want a mortgage in 3yrs time)

3) Will my rating have a direct impact on any applications for employment (as
i have read potential employers do credit checks)

4) Am i right in assuming i cannot right off Student Loans with Bankrupcy?

5) After Bankrupcy discharge how long til i can get a mortgage?

the most important aspect is credit rating factor when it comes to applying for jobs (iv been made redundant this week)

any help would be much appreciated. thanks

shinyhead

Hi Mr Ice,

Hope this helps, and this is as far as I know:

1. If on a DMP your creditors have probably issued default notices. These will trash your credit rating. Did you get any not long after starting your DMP?

Everything on your credit file has a 6 year life-so your file will become 'clean' 6 years after the date of the last default placed on it. So:

2. Very probably.

3. I understand not all employers do credit checks but if they do then it could be detrimental.

4. As far as I know that is correct.

5. I don't really know the answer to this one but if you go bankrupt you will probably have to wait at least until you're discharged before you can get a mortgage, and then it may be at a hefty interest rate. But after 6 years from your discharge it will go off your credit file and then you could be able to remortgage at a better rate.

mr_ice2005

shinyhead wrote: »

Hi Mr Ice,
1. If on a DMP your creditors have probably issued default notices. These will trash your credit rating. Did you get any not long after starting your DMP?

Everything on your credit file has a 6 year life-so your file will become 'clean' 6 years after the date of the last default placed on it. So:

.

I dont think i did get any default notices. The creditors agreed to the monthly installments (except MBNA who still continue to charge interest).

As for the 6yr life. In theory if it takes me 3-4yrs to pay off my debt then i could have a bad credit file for another 10yrs???

milliemonster

mr_ice2005 wrote: »

I am currently in a Debt Management Plan with CCCS (since feb 2007).

Credit Cards & Egg unsecured loan currently at £10k
(i have student loans at a further 10k but this is not part of the DMP)

only asset i have is a 3k car.

I have a few Questions and i hope you guys can help:

1) In terms of credit-rating where do i stand with a DMP? I was only offered a very basic cashline card account from RoyalBankOf Scotland soon after i began the DMP. yes your credit rating will be affected substantially by being on a DMP as you are not honouring your original credit agreement

im thinking if it takes me 3yrs to pay off this debt does that mean i will have atleast 3 yrs of bad credit? there is no such thing as 'bad credit', it will be on your file that you are not honouring your original credit agreements by making the minimum repayments in some way , but it will still remain on your file for a further 6 years I would think that you had been on a DMP, although the accounts would be 'settled'

2) Will i continue to have bad credit even after i have paid the debt? If so
how long for? (as i may want a mortgage in 3yrs time) see above

3) Will my rating have a direct impact on any applications for employment (as
i have read potential employers do credit checks) it depends on the employer I think

4) Am i right in assuming i cannot right off Student Loans with Bankrupcy?I believe this is correct

5) After Bankrupcy discharge how long til i can get a mortgage? BR stays on your file for 6 years following discharge and it is unlikely you would get a mortgage during this time, although I am no expert on this, even if you could get one it would be very expensive

the most important aspect is credit rating factor when it comes to applying for jobs (iv been made redundant this week)

any help would be much appreciated. thanks

I have added my comments in above, although I am not an expert, this is just what I have picked up on this board. If you are looking for a mortgage in 3 years then you need to be avoiding BR at all costs really, at the end of the day, if you are on a DMP then even if this is agreed by your creditors, they will mark this on your credit file (otherwise what would stop you applying for and being accepted for more credit? which is the last thing you need) but I don't know how being on a DMP is recorded on your file.

I think if you are struggling at present to meet your repayments (which has led to you being on a DMP) then you should just concentrate on paying your unsecured debts off as soon as you comfortably can and then look at rebuilding your credit towards getting a mortgage sometime in the future

mr_ice2005

thanks for the replies shinhd and millmonster. I called CCCS and they pretty much said the same thing. I have decided against bankrupcy..i dont think i qualify anyhow (since they do not count student loans)