Credit Card Advice

norwichlad

Hi

First time poster, but looked through quite a bit before.

After some advice.
I owe approx 13k on credit cards from a previous relationship gone sour. The interest has been frozen on them all, and I'm paying £180 p/m towards paying them off, but with the amount I owe this is going to take me 10years to repay the largest of the balances.

My credit file is also very poor due to non-payment of a previously secured loan.

Should I;

A) Keep paying them off - its the right thing to do despite the monthly outlay.

Stop paying them, take the resulting defaults/CCJ's on my account and in 6yrs have a cleaner credit file, saving me the monthly payment in the process.

Appreciate your thoughts/advice people.

Thanks.

michael1983l

norwichlad wrote: »

Hi

First time poster, but looked through quite a bit before.

After some advice.
I owe approx 13k on credit cards from a previous relationship gone sour. The interest has been frozen on them all, and I'm paying £180 p/m towards paying them off, but with the amount I owe this is going to take me 10years to repay the largest of the balances.

My credit file is also very poor due to non-payment of a previously secured loan.

Should I;

A) Keep paying them off - its the right thing to do despite the monthly outlay.

Stop paying them, take the resulting defaults/CCJ's on my account and in 6yrs have a cleaner credit file, saving me the monthly payment in the process.

Appreciate your thoughts/advice people.

Thanks.

You do realise that even with option B you will still have to pay them whatever the judge decides you can afford, right? and if you have assets they can reposess them.

norwichlad

I've no assets to speak of, bar my car.
If I got a CCJ for a credit card debt how would I be forced to pay it?

michael1983l

Because CCJ stands for county court judgment and the judge will issue a bayliffs order. They can also apply for you to go insolvant and have any of your assets liquidated (including your car if you own it). Not paying your debts if your in a position of being able to pay them is never a good idea.

norwichlad

Whilst what you say may be technically true, its highly unlikely hence my OP, and even more unlikely of being forced to go insolvent.

michael1983l

If you owe 13k and refuse to pay it, the lender is not just going to write it off. When they go to court to obtain the CCJ they will apply for a bayliffs order that will be granted. They may not force you to go insolvant but you will have the bayliffs on your case, especially as your debt will most likely be sold on to debt collection and they will certainly do all they can to get the money.

norwichlad

The debt is spread across 4 cards, 4 different credit companies. Appreciate that there may be issues with letters/calls from bayliffs although none of the companies have my present address.

There may also be the chance of course that a bayliff may take a lesser percentage to settle the debt.

I have spoken to 1 of the c/card companies who stated that they would not reduce the debt by anymore than 10-15% for a full settlement. One of the others offered a 35% reduction to me without me asking.

michael1983l

Well it is only a decision you can make. Myself personally would only do it as a last resort as your circumstances may change and you may need a loan or a mortgage sooner than you think, at least if you carry on paying your debts you may still have options on that.

I also think that the debt collection agencies may be a bit of a pain too as they will catch up with you eventually. And you may end up on pre payment for your gas and electricity

norwichlad

I am loathe to do it, but £180 is a lot for me. I realise that I have gotten myself into this position and the right thing to do is pay my way out of it.

As for a mortgage or loan, I realise that with my credit rating and lack of savings/deposit, both of these options are a very long way into the future!

michael1983l

But your financial circumstances may change in the near future enabling you to afford that house, however if you go down this route you wont have access for at LEAST 6 years. I realise it seems the easy way out now but you might end up regretting it big time. I was in a similar position to you but choose option A I am now glad that I did, and I wouldnt own my house now had I took the other option.