Newbie Seeking Advice

willz202

Hi all,

I'll try to keep this as short and sweet as possible to keep people reading, just seeking the some advice really, so bear with me, any advice will be greatly appreciated....


About 4 years ago I ran into defaults due to being made redundant from work, being young and dumb I just let things spiral out of control and suddenly, at 25 just £7,500 worth of debt has pretty much crippled me financially, I'm pretty sure I'll never get a mortgage, it was hard enough getting a new bank account, I'm currently living with my parents but hope to move out at some point but know renting will be a pain if anyone uses credit checking.

These debts are made up of a personal loan, phone contracts, and credit cards, these debts then got 'sold' on to collection agencies etc and the original lenders dont seem to respond to my letters so I've been dealing with them

I'm back in secure work now and for the past year I've been paying several of these agencies off totaling just over £150 per month.

Now the part that confuses me is that (via credit expert) I can see the balances of some of the debts updating and reducing each month, but some remain the same despite payments being made, though the payments have no positive effect on the defaults/ability to gain more credit for a possible consolidation, and I've been advised that the defaults will be removed when the balances are cleared, so basically in 3 years, now, I could afford to pay more, I have some disposable income but the thing that puts me off is that I dont want to skint myself every month until they're paid just to find the balances nil out and theres still no effect on my ability to get credit

I'm in no way trying to get out of paying my dues, I had the money and I intend to repay the full amounts, I just cant stand these agencies, I'm trying to make a difference to my life, working hard, volunteering, back to uni in the evenings etc but I just feel awful that I let myself get to this situation

Does anyone have any advice they could lend me (I'll repay, you know I'm good for it) on how to tackle these debts or how the defaults will be removed when paid up, or even legal advice about these agencies responsibility to update my records

Thanks

NorthernLas

The defaults will stay on your credit file for 6 years. If you pay before this time they will show as being settled.

I have no idea about how your credit file is updated.

debtdesperado

Well done - by my calculations you have paid nearly £2k off your debt, which is about a third of the way there!! (Hope that's right, maths is not my strong point... ).

First things first. Don't be so hard on yourself - £7500 by 25 isn't that bad (try £42k by 29... that is bad. Ahem)! At least now you have plenty of time to get it sorted and your defaults off your credit file.

The reason the original lenders won't speak to you is that they have 'sold' the debt to the collection agency, so it is no longer the original lender's problem.

Have you done the debt snowball? If not, google it and plug the numbers in. This will give you a date to be debt free by, which is good to know to keep focused and motivated, and might inspire you to up the payments.

I think minor defaults (eg a missed payment) stay on file for 3 years, but if you have a major default (eg multiple missed payments within a set period) they stay on for 6. Then they drop off automatically (but check this at the time as sometimes there are admin errors at the credit agencies).

But don't worry about this, and the reason is that it will take you another 2 years approx to be debt free, plus presumably you haven't incurred any defaults in the last year, so that is a year. So you will be half way through the maximum 6 period by the time you are debt free. It will probably take you a couple of years to save a deposit (say, 3) and bingo... you have a deposit and are debt free, and have no credit issues, so you are ready to buy a place.

On the balances which don't seem to be reducing, I would get in touch with each of the collection agencies by letter (and ask for any response to be by letter) and ask what the current balance is, so you can check that they aren't applying your payment to someone else's debt etc - mistakes do happen.

As each debt is repaid, get a letter from the collection agency saying that the debt has been settled. Then say, once a year, get a copy of your credit report and check that the agencies have reported back to the credit agencies. If they haven't, then you simply write a letter to the credit report people enclosing a copy of the letter confirming that the debt has been repaid. It usually takes a few months for the info to trickle through everywhere, so no point doing this too regularly.

Marisco

Another reason could be why the balances don't seem to shift is, that the payments you make only cover interest. Write to them and ask them for a full breakdown of everything - payments, charges etc.