default or not to default!!!

valeriedixon

Hi
I have a couple of queries, I am trying to sort out arrangement to pay off two debts- joint overdraft with OH and cc which is OH both are with same bank. No other debts except small amount on my own cc which is all up to date (I did cheap offer balance transfer offer to pay off some of amount owed by OH on credit card to reduce balance being charged at horrible rate). I am confused as to whether it is always that you have to be put into default to come to arrangement to pay or can they enter and agree to an agreement for reduced payments without defaulting? If we managed to get arrangement on OD but couldn´t reach agreement with cc and they defaulted on cc then as this is in OH name would this effect my credit rating? It is just that I notice some people say they have reached an agreement on reduced payments and less or 0 interest with some banks/ccs where they have not been registered on credit reports with default - would this look better than default or is there no difference? Both OD and CC are saying they have to default us in order to enter into arrangement.

Thanks, sorry if it is a bit garbbled!!!

Conan_the_librarian

Is there really no way you can pay the CC and the OD down without arrangement to pay?

You don't need to default to have an arrangement to pay, but an arrangement to pay will still appear on your credit file and while not as bad as a default, still looks pretty bad to any future lender. Also, unlike defaults, which get wiped after 6 years, Arrangement to Pay doesn't get wiped off until 6 years after the account closure.

Is there a great urgency to pay back the overdraft? (I'm assuming its an arranged overdraft). If not concentrate on paying down the card and avoid defaulting or arrangement to pay if possible.

valeriedixon

OD is arranged but up to limit and interest is too high will have problems just meeting interest without reducing amount owed. I was hoping that it would look better if we managed to reach an agreement on repayment at a letter amount on both rather than a default even though it would stay on credit report longer. Also cc is only in OH name and OD is joint. It is impossible for us to pay them both with amount of interest payable each month as both relying on benefits for forseable future due to OH ill health. Worried that even if we did keep up with joint OD if we did default on OH cc then it would affect my credit record regardless.

Thanks

BigCraigJohn

Different lenders deal differently but in reality once you stop paying by the original agreement you will be defaulted. Imo the sooner the better. Theres a good chance that once defaulted your debt will be forwarded to a dca and with any luck frozen.

CH27

valeriedixon wrote: »

OD is arranged but up to limit and interest is too high will have problems just meeting interest without reducing amount owed. I was hoping that it would look better if we managed to reach an agreement on repayment at a letter amount on both rather than a default even though it would stay on credit report longer. Also cc is only in OH name and OD is joint. It is impossible for us to pay them both with amount of interest payable each month as both relying on benefits for forseable future due to OH ill health. Worried that even if we did keep up with joint OD if we did default on OH cc then it would affect my credit record regardless.

Thanks

Off topic but did you get the DLA awarded?

valeriedixon

CH27 wrote: »

Off topic but did you get the DLA awarded?

Yes we have just been notified of the award, what a relief it was to get that letter. It is going to make a huge difference to things for OH. Thanks for asking. :j

I have appointment at CAB on Wednesday and I am just trying to get all my paperwork in order and get clear options before I go.

CH27

valeriedixon wrote: »

Yes we have just been notified of the award, what a relief it was to get that letter. It is going to make a huge difference to things for OH. Thanks for asking. :j

I have appointment at CAB on Wednesday and I am just trying to get all my paperwork in order and get clear options before I go.

Great re the DLA. Have you applied for Carer's Allowance now?

Good luck at the CAB.

yamsteroo

If it's any help, I've been in a DMP with CCCS for 11 months now and only Egg Loan has issued a default on my account - the rest of my creditors (and bizarrely, Egg Credit Card) just ok'd the arrangement and haven't defaulted (though I think Santander may be about to as they've suddenly started to ring me again )

valeriedixon

yamsteroo wrote: »

If it's any help, I've been in a DMP with CCCS for 11 months now and only Egg Loan has issued a default on my account - the rest of my creditors (and bizarrely, Egg Credit Card) just ok'd the arrangement and haven't defaulted (though I think Santander may be about to as they've suddenly started to ring me again )

Thanks for that - I am not sure whether it is good to be defaulted or not!!!

valeriedixon

CH27 wrote: »

Great re the DLA. Have you applied for Carer's Allowance now?

Good luck at the CAB.

I have now applied for Carer´s allowance but only sent form off on Friday as couldn´t do it until we heard about DLA.

I am trying to do up to date SOA for CAB and was wondering if creditors will expect all benefits to be part of income when counting towards what is left to pay them. The thing is if they do we will have much more than we had with both CA and DLA but it will mean that we can´t use this money towards eg taxis (GP has offered OH massage treatments), help for caring needs (so I can get some cover as I am exhausted), extras that aren´t available on NHS, extra heating in winter etc. I know these aren´t counted towards income as far as anything else is concerned as they are considered to be soley for the benefit of and necessary for the person who is ill but will creditors see it differently, I am not sure!! Because we don´t know what he will need it is impossible to ring fence any amounts for specific items at the moment as his needs will change.

It all feels very complicated, so many of the figures are variable it isn´t like TV is this, water is this amount, etc etc.
Think maybe I will just have to take all paperwork and ask CAB what to do.

Am a bit concerned as everyone seems to use payplan and cccs and I haven´t seen anyone mention CAB.

Thanks again for your message.

Conan_the_librarian

valeriedixon wrote: »

Thanks for that - I am not sure whether it is good to be defaulted or not!!!

Its never good to be defaulted but if you're going to default then the sooner the better as it will spend 6 years on your credit file from the day you default.