Help, please. Is a default notice as damaging as a DRO?

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I have debts to Lloyds and Barclaycard (now Mercers, soon to be Calder...).

Payplan advised I take a DRO, but that didn't seem a good idea at the time, because of the damage it would do to my credit rating, and also I felt I should try to stand by my debts.

Instead I tried to come to an arrangement with my creditors.

Lloyds have (eventually) accepted a pro-rata payment, although today (days after accepting a 10-month reduced repayment plan with no interest charges) they seem to have abruptly made a U-turn and sent me a very official-looking default notice and told me they are passing matters to their solicitors.

Barclaycard (via their debt collectors) have been total sh*ts for months. They have never accepted any deal and harass me every 14 days. They have also sent a default notice, though it looks a little less credible than Lloyds'.

I have kept up regular pro-rata payments to both companies.

My question is this. Is a default notice as damaging to my credit rating as a DRO? Having been served a DN, is it a case of I might as well take the DRO, as the damage is done? I notice that the credit rating calculator tool on this website lumps 'default notice' in with CCJ and bankruptcy in the same question, suggesting that they are all equally damaging, yet surely that doesn't make sense? If you were a lender, would you consider someone like me (someone who doesn't pay as much as he's supposed to, but keeps the debt and keeps trying to make payments) as an equal risk to someone who walks away from their debt entirely?

As much as it would be nice to be debt free, I am trying to keep an eye on my long-term future and I assume one day I will get a job again and want a mortgage.

RAS

No, although neither is great.

And BR and IVAs are certainly much more damaging than a default. Defaults fall off your credit record after 6 years. With insolvency, you have to declare it for life, if questioned.

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Thanks, RAS.

I'm so tired of dealing with these people, especially Barclaycard. I've been doing this since the middle of last year and I'm so sick of it.

This is what I don't understand - I can't afford to pay them more, I simply can't. If they keep pushing me, I might take a DRO just to be rid of them - and then they'd lose thousands and thousands of pounds they might have got from me if they'd just left me alone. Why do this? In what bizarre parallel universe does it make good business sense to force your customers to throw away their debts and thus lose the company money??? Are they insane?

And why, if a DRO is more damaging than a default, do both CCCS and Payplan advise me to take a DRO? I spoke to someone today and they were clearly rushed off their feet and blindly following a script designed to channel me into a DRO.

And as for Mercer's... if you're correct that a DRO is more damaging than a default, then Mercer's are quite clearly trying to push me into a DRO by exaggerating the damage of a default. Why?

Do you think it could be because I owe their competitor, Lloyds, 5 times as much money, and therefore if they can push me into wiping out my borrowings, I'd do 5x as much damage to their competitor as I would them?

RAS

Hi

Basically the debt charities do work a bit to a formula, as do some people here just we argue about it openly.

So suggest that if the debts are going to take more than 6 years to clear on a DMP, then BR is a good option for example. Others look at the possible change in circumstances and suggest trying a DMp for w while to keep options open.

Do not be too upset about the default notices; they are a legal requirement before the debt can be passed to a DCA and most people find DCAs are more accepting of reduced payments.

From the creditors point of view, they have written off a percentage of your debt already, so the sums are rather different.

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RAS,

BR = BankRuptcy?

Is a DRO directly equivalent to bankruptcy? My impression is that it's been 'sold' as 'bankruptcy lite', with an equally 'lite' penalty, i.e. it won't have as much negative impact as the real thing - I thought after 6 years you didn't have to declare it, have I been misinformed?

But I've also seen some mutterings on the internet that maybe the rules of the game will be quietly changed behind the scenes - after all, there's nothing to stop a mortgage lender changing their own rules for accepting new customers, or changing the rate charged based on whatever circumstances they can think of, is there?

I see what you're saying about the more-than-6 years thing (at the current rate, it would take me over 20 years to pay back the money), but this takes no account of the fact that I might get a job at any time, and then the calculation is out the window. CCCS and Payplan seem to take this same attitude, as though it was unthinkable I could get a job in the next 6 years... isn't that a bit weird?

I don't understand what you mean when you say "they have written off a percentage of your debt already" - do you mean because Lloyds have stopped charging interest? The default notice they've sent me explicitly says they may start again, and in the letter where they finally accepted my deal they make it crystal clear they can rip up the agreement any time they like.

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Anyone...?