Advice paying back a defaulted account

barneystuta

Basically, i had an account - which was maxed out on its overdraft limit (about £1,500).

I was naive, and silly (and a student) and decided to 'ignore' this. Without realising, that i was getting post sent to my home address (which i didn't get access to until the summer).

When i got back i'd found i defaulted, and the account was passed over to Wescott. There is the background, i was silly, yes and i've learnt my lesson.

Anyway - i've had my experian credit report and it is all 100% perfect, of course, except for this massive big red error.

I have been paying (for about the last 6-8 months) £20 a month (the minimum payment i need to pay back). Wescot contacted me saying if i could raise £750 they would clear the rest of the debt. I said i couldn't (i was still a student at the time, no money, no credit cards, my family couldn't borrow it me). So i just agreed to carry on paying the £20 a month.

This is still getting paid out each month, but now i have come into work. I am now earning and will be able to raise a sum of money to clear the debt - and hopefully boost my credit rating as I am looking into car loans/mortgages in the near future - and the last thing i want is this upping my interest rates.

Do you think i can say to Wescot, if i pay a lump sum the rest will be cleared? Or has my chance gone that they offered me and i will have to pay the full outstanding £1200?

Any and all advice is welcome, i've learnt my lessons and i just want to get rid of this massive mistake as quickly and as cleanly as possible. (and of course, if i can avoid paying half the debt, great!)

PS - hope this is in the right place?

whatatwit

I think it will show as only partially settled on your credit report, rather than settled in full.

barneystuta

whatatwit wrote:

I think it will show as only partially settled on your credit report, rather than settled in full.

They said, if i can raise about half the amount i owe - and pay in a lump sum - they will clear the rest. So i will owe nothing.

So are you saying that, it will show up on my credit history, as payment settled - but not in full (even though i wont owe anything?)

I hope that makes sense?

whatatwit

That was the impression I got when I was paying off a defaulted debt. (not from Westcott)

Ask them how it will show on your credit report.

I think Clapton, knows a bit more about credit reports and the best way to deal with them.

The account will stay as defaulted on your report.

barneystuta

I assume clapton is a user here? I will keep an eye out for them then.

I now work with mortgages, and know i can get a property and afford the monthl repayments - if i can show i've cleared this debt. I can see why it would stay on my credit rating. (Defaulted payments stay on for so many years is that right?) But surely if i pay it off, it will atleast improve my rating?

whatatwit

Yes, sorry, Clapton is a regular poster.

I think defaults etc stay on for 6 years.
I went the settled in full route.

barneystuta

Thanks for the help.

I am arranging a meeting with my Bank see if they can help me out or offer advice. I also work at Moneysupermarket.com so have plenty of people I am sure i can ask.

Thanks for the pointers though, helped me alot to understand a bit more my situation.

whatatwit

This is just based upon my experiences, I would like to know a lenders point of view as no doubt would a lot of posters.

I get the impression that as these collection companies 'buy' debts for a pittance, they are only interested in getting back a percentage of the money to cover their operating costs. I don't think they care about how it looks on an individual's credit record.

whatatwit

As a thought, have you looked at claiming back any bank charges?

barneystuta

whatatwit wrote:

This is just based upon my experiences, I would like to know a lenders point of view as no doubt would a lot of posters.

I get the impression that as these collection companies 'buy' debts for a pittance, they are only interested in getting back a percentage of the money to cover their operating costs. I don't think they care about how it looks on an individual's credit record.

Yeah thats exactly what they do. For the total debt of 1500, Wescot probably paid £100 max to Natwest(if not a whole lot less!) to take over the debt. Banks can't be bothered with the hassle of chasing it up. I work with people who have worked with HBOS and tell me this. 1500 to Natwest, is nothing. So they just want to get rid of the debt as the hassle is too much for a pittance (to them).

I was offered a roll with a company called Aktiv Capital, which is why i know a bit how the system works. What Wescot would do is essentially then, want to make money. So anything over £100 they get - is profit.

The £20 min a pay at the moment, isn't again, worth it to them. They would rather make a quick bulk profit - instead of pay for all the £20's each month to be processed (so them in the end - making little money over say 6-7 years!) when they can make a huge 5 or 6 times profit within a few months.

And as you say, Wescot wont give a damn about my credit report - but of course, I do. Especially as am 24, and coming to an age where i need to start thinking ahead.

barneystuta

whatatwit wrote:

As a thought, have you looked at claiming back any bank charges?

That is next on the list, although i don't think I have that many to be honest. Most of my time with my bank (about 5 years) was as a student, with a huge overdraft limit - so rarely went over it. I've never missed a payment ever (or direct debit) except for this stupid big massive default.

Before Uni i had money go in, just as a part time job, and spent what i earnt - no more. So it was very rare, if ever, i got charged by my bank. I think maybe once or twice i went over my limit of overdraft (was about £50 limit lol) and got charged a small amount.

I may have something and its worth a try, but i doubt i will have anything substantial.