I'm caught in a vicious circle of poor credit ratings

willied

Hi there,

I've got a problem regarding debts which I built up in the past and never paid off. Over the past 18 months, I've gradually received letters from collection agency's with regards to my debt. I've double checked that the debts were indeed mine, then entered into repayment plans. I've only 4 more payments on the remaining one, then I'm clear, or so I thought.

I've now received a letter from Lowell financial with regards to a bank loan and overdraft that I defaulted on over 7 years ago. The total amount for this debt is approx £4000.

At the time of this debt, my bank manager offered me a loan to consolidate my other loans, and this loan broke the camels back so to speak. Instead of being the 'fix' that the Bank Manager said it would be, it was the complete opposite. Looking back I was young and naive, as I can remember the Bank Manager clearly commenting that I only had £30 to live on per week. Very tight budget was the term she used! But she still granted the loan. :mad:

Just after I took this loan, I was made redundant, but very quickly found another job, which paid a salary a lot lower than my previous employment. I was now in serious trouble. I got CAB to step in and set up a repayment plan.

I had to change bank accounts etc and also had to move house several times in the following 2 years. With all the chopping and changing I forgot to set up the repayments for this loan about 12 months into repaying it, and to be honest I forgot about it. Well until this letter arrived!

I'm unsure of the next step that I make. Yes the debt is mine and I will repay it, but I am very annoyed that the greed of the bank put me in this position in the first place.

Because of this defaulted loan I'm stuck on the most basic account that my present bank can offer me. Worst of all, I can only have one account so I can't open several accounts and use them to budget my bills etc. It's silly, really as my bank manager even admits that I earn much more than him. But there is nothing he can do.

I've enquired around, but every bank gives the same response. Because of this my wife had to take the morgage for our house out in her own name as I couldn't get a morgage. This is why I have tried to clear my outstanding debts quickly.

As I said, I saw light at the end of the tunnel with only 4 payments left...How wrong was I?

There is no possible way I can pay this debt off in less than 24 months so I'm stuck in the same situation for the forseeable future.

My wife has suggested that we try to remorgage and try to get the morgage in both names, to try and clear off this debt and also to modernise part of our house. I'm unwilling to try as I'm 99% sure it'll be a no from the bank. The morgage has been paid every month since she bought it 6 years ago, so I'd persume we might have equity tied up in the house.

Anyone got any ideas on how to resolve this situation quickly?

Regards,

Willie

DVardysShadow

The debt becomes statute barred [== unenforceable in court] 6 years after you last made a payment or acknowledged the debt in writing. So you might want to work out when you last actually made a payment. Any defaults should fall off your file after 6 years.

[Deleted User]

Hi,

Firstly, have a look at martin's debt articles and pages: http://www.moneysavingexpert.com/loans/debt-help-plan

The article - and most people on here would agree - that switching unsecured debt to secured debt is a very bad idea.

Also, as the debt is so old - Over 6 years, it could be statute barred (you need to check and see when you last either acknowledged the debt, or last made payment) - hopefully someone will be along shortly to direct you to template letters you can send and how to get this sorted (if it's SB'd)

And also, it might be worthwhile checking that you have nothing else lurking on your credit file (check all three credit agencies: http://www.moneysavingexpert.com/loans/credit-rating-credit-score) - and make sure that all the information they have on you is correct.

HTH

D9