debt questions

oddone

If you have a debt that is 5 years old. Is it better to wait for it to pass the limitations thing or pay it and have that default on your account for the next 6 years? Any comments?

southernscouser

oddone wrote:

If you have a debt that is 5 years old. Is it better to wait for it to pass the limitations thing or pay it and have that default on your account for the next 6 years? Any comments?

Firstly it depends on what the debt is for. If it's unsecured like a loan or credit card then if you have had no correspondence for 6 years then you are not liable to pay for it by law.

When you stopped paying this debt your credit would have issued a default. This stays on your credit file for six years of being issued.

If you paid it now or not the default will only be on your file for about another year!

oddone

I read somewhere else that the minute you made contact with the credit card company, they would restart the default date. So, that is not correct?
Thanks for your advice.

guyrulius

It depends on the last date that you paid them. There are those who will say that morally you should pay. Reality check, If you haven't paid anything since the default and they are not chasing you then don't shout too loudly.

I settled a number of defaults and the accounts were all marked as settled from the default date. They just dropped off the credit report. I left one big account outstanding and it dropped off as well. The company had written it off as a bad debt so they didn't bother chasing it up.

Your credit rating is shot until the last defaults clears. As long as you don't want any credit and can live with the mark on the report until the 6 year point. Use the money to pay off more pressing needs.

southernscouser

oddone wrote:

I read somewhere else that the minute you made contact with the credit card company, they would restart the default date. So, that is not correct?
Thanks for your advice.

I'm not sure whether you can be given more than one default per debt but I don't know for sure to be honest!

oddone

The thing is I want to get a mortgage and my bank provisionally said given I could pay a 10 percent deposit and have a regular salary it would be ok. Now, I have found out about these debts, I am not so sure they would agree!!

southernscouser

Is there any reason you can't wait another year or so! That way you won't have to pay this debt and the default should have dropped off your file!

Broken_hearted

If its sat on your file, stopping you getting a mortgage then pay it.

sportbeth

Another way of looking into it. I've got exactly the same thing, one of the debts I have no idea about and don't even know who it is, but it's for £150 or so. If I can find who it is and pay it off it would help me to get a mortgage.

One mortgage advisor told me to look into both my credit histories, and Equifax doesn't seem that bad. He said to work on it until it shows as a satisfactory credit score, e.g. defaults marked but all paid off and 3 accounts ticking over well, that would be my mobile phone, catalogue and credit card then.

You can then ask many mortgage lenders who they use and only go with one who will search equifax. Interestingly enough they will tell you this info quite openly.

It's not as tough as you might think to get a mortgage. I had a shocking credit file last year when I fell into trouble with an employer. If you explain that to the lender and can demonstrate that it's not really you now then they will consider you.

They won't consider you if anything's outstanding though, so if you are in a hurry I would consider tracking them down, get a discount on Full and Final settlement and get it cleared.

A worthwhile exercise I guess as the last thing you want is someone banging on your door asking for money at your new address when you've just mortgaged yourself quite heftily.

Broken_hearted

I might be wierd but I believe if you ran up the debt then you should pay it. It's not smart or clever to hide and hope it goes away. A lot of people on these boards burried their heads in the sand (me included) till the point they realised they were in a real mess and had major problems sorting it out.

sportbeth

Broken_hearted wrote:

I might be wierd but I believe if you ran up the debt then you should pay it. It's not smart or clever to hide and hope it goes away. A lot of people on these boards burried their heads in the sand (me included) till the point they realised they were in a real mess and had major problems sorting it out.

Nope, sorry, don't entirely agree with this view (contraversial lil'ol me!)

The debt that stands now is either

a) not being chased like one of mine that I am trying to find out who to pay it to

b) being chased by some debt scavenging vulture who paid 25p in the £1 for it.

Either way the original creditor has written it off.

Why should you line the pocket of a debt collector who picks off the remains of people who land in the poo for a living? Or even worse, pay a vulture that hasn't even chased you for anything so they get money for free?

Yes, morally you have an obligation to pay it. But also morally you have no obligation. The company has written it off, I do believe that any company worth their salt would have factored into their margins a percentage of annual loss and you are it.

I guarantee you have done your time worrying, sweating and panicking about each and every debt. One or two of them if you fell into it like I did have profited from your mishap and misery and charged you way more than you originally borrowed. Anything about to fall off your record is entirely fortunate and if you can wait for it to go then do so.

(I will now await for the screams and hurls of abuse!!!)