Clearing a Default Issue!!

Triggauk

Hi everyone.

Im looking for a bit of advice. We have just applied for a rental housing association property and i have been made aware of a default on my credit record. Dating back to April 2009 for £1175 for unpaid catalogue (Silly i know).

I have contacted the company in charge of retrieving the debt and been told it will stay on my record for upto 6 years and that the lowest i can pay is £67 per month to pay it off, but the default will not be removed :mad: it will just show as "Satisfied" whilst paying.

This is really deppressing as my girlfriend and i were hoping to get a mortgage next year after saving hard for 4 years.

Issue one..... is that i cannot afford £67 per month its just not possible right now as we have a baby on the way.

Issue two..... is there anyway of clearing this default by arranging a deal to remove default if debt paid in full?

Thanks!!

TMoose

Hi Trigga

Issue 1 - you can only pay what you can afford, send the debt collection agency a statement of affairs showing your incomings and outgoings, and they have to accept what you can afford. I would also suggest posting a Statement of Affairs here, and the very clever people on this forum can help identify how to reflect this to a DCA. Template is here : http://www.makesenseofcards.com/soacalc.html

Issue 2 - it is possible, but very unusual for a DCA to remove a default - they are there to reflect the fact that you failed to stick to a credit agreement, and as such, should stay if that is the case. Harsh, I know, but them's the rules. I'm waiting until March 2011 for my default to drop off before applying for mortgages. But you can still ask, and see what happens. Also a "satisfied" default is still marginally better than unsatisfied. Having said that the "newness" of the default will make it very difficult for you to get a mortgage.

Sorry if this is bad news.

Moose

fermi

Triggauk wrote: »

Issue one..... is that i cannot afford £67 per month its just not possible right now as we have a baby on the way.

Just pay what you can then.

They may "want" £67, but they have no right to insist on that as a minimum.

Triggauk wrote: »

Issue two..... is there anyway of clearing this default by arranging a deal to remove default if debt paid in full?

Normally creditors won't go quite that far, but doesn't do any harm to ask.

Triggauk

Thanks for the rapid replies i really appreciate it.

Do you advise me to ring them up and rearrange a "MUCH" lower payment plan then? To be perfectly honest i only agreed to that amount at the time so i had some proof to the housing company it was being paid, now that has gone through it isnt so important. Problem is they take the first payment from my bank on the 25th "Eeeek".

I can also ask them at the sametime about paying it off in full and removing the default!!

Im Very upset regarding the whole mortgage thing..... I suppose its another 5 years of saving, might even be able to buy a house with cash by then .. lol yeah right!!

onlypaddy

Triggauk wrote: »

Thanks for the rapid replies i really appreciate it.

Do you advise me to ring them up and rearrange a "MUCH" lower payment plan then? To be perfectly honest i only agreed to that amount at the time so i had some proof to the housing company it was being paid, now that has gone through it isnt so important. Problem is they take the first payment from my bank on the 25th "Eeeek".

I can also ask them at the sametime about paying it off in full and removing the default!!

Im Very upset regarding the whole mortgage thing..... I suppose its another 5 years of saving, might even be able to buy a house with cash by then .. lol yeah right!!

DON'T RING!

calling a debt collectors is terrible, they will try and bully every penny they can from you. write to them and send everything by recorded post, and inform them you won't talk on the phone, even if they call you.

Don't sign any of the letters, just print your name.

As for your first post, you can ask but it is very unlikely, unless it was an error I've never heard of a default being removed. you will have to wait until it is expired unfortunately...so yes, another 5 years of saving hard! or, if you have enough to pay it in full? You have another 5 years to save it again now after all....

I would advise checking your credit reports more often, so that something like this doesnt sneak up again.

Triggauk

DAM!! Too late i rang before reading last post.

You are right ... the woman on the other end did try the bully tactics on me... Also took my statement of affairs over the phone, which worked out that me and my girfriend have around £75 left over at the end of every month ( few white lies here and there) and she still said the lowest I could pay was £ 21 per month over 4 years. I said £10 was as high as i am willing to go but she refused and said she would hand it back to the collection team and letters and phone calls would commence to my address again.... Too which i replied "Not if i can find the A-Team first!!" and hung up... slightly immature i know!!

What happens if i dont pay them anything? Theres not much they can do if its wiped after 6 years is there. It baffles me as i am willing to pay it .....just on my terms, yet they still want to try and bleed me dry even tho i told her we had a baby on the way!!

Triggauk

Just a quick Bump!!

Tixy

You need to be able to demonstrate you are paying as much as you can afford each month. That way if it ever goes to court you would show you are being reasonable.
If you have £75 spare then why can you not afford the £21 repayment? to be honest that sounds like a good deal.

What can they do? well they could apply to court for a CCJ.

The debt is not wiped after 6years. The default will disappear from your credit report but you will still owe the money. They will still chase for it, they could still take you to court for it. The only time you wouldn't have to pay is if there are 6years where there are no payments at all and if they didn't get a CCJ in that timeframe.

Back to the mortgage question - if you have one old default that doesn't mean you won't get a mortgage at all, so long as you can show you have handled credit well since then. So in 2years or so when its 3years old this alone would be unlikely to stop you getting a mortgage.

Triggauk

Tixy wrote: »

You need to be able to demonstrate you are paying as much as you can afford each month. That way if it ever goes to court you would show you are being reasonable.
If you have £75 spare then why can you not afford the £21 repayment? to be honest that sounds like a good deal.

What can they do? well they could apply to court for a CCJ.

The debt is not wiped after 6years. The default will disappear from your credit report but you will still owe the money. They will still chase for it, they could still take you to court for it. The only time you wouldn't have to pay is if there are 6years where there are no payments at all and if they didn't get a CCJ in that timeframe.

Back to the mortgage question - if you have one old default that doesn't mean you won't get a mortgage at all, so long as you can show you have handled credit well since then. So in 2years or so when its 3years old this alone would be unlikely to stop you getting a mortgage.

To be honest Tixy we do have alot more than £75 left over at the end of every month but we also have our first child on the way which means putting every penny we have into trying to save for the baby and trying to save for a house which is stretching us thin as it is. I want to pay as little as possible while trying to keep them happy at the sametime. What really annoys me tho is that the original debt was only for £850. almost £500 interest i can do nothing about!!