Welcome Finance – CONFUSED!!! - Please HELP ME!

FatFudson

Hi all, hope someone can help me!
I’m self-employed and got into cash flow problems when a client went bust and knocked me for a large sum of money. To try and tide myself over I stupidly took out a load form welcome finance in November 2008 for £3,000 (£244 PM over 37 months). I paid 24 instalment, totalling £6,100.
I took a second loan of £4,000 out with them in October 2008 (£191 PM over 49 months) and made 13 payment, tottering£2,483.
Everything went wrong with my business in 2009 and I defaulted on both loans. I heard nothing from Welcome until I was approached by 2 debt collection firms, Lewis Group & Howard Cohen were I struck deals with them.
I have somehow managed to come through it and keep my business and I am starting to get on top of my finances again. According to Lewis Group & Howard Cohen I owe £5,949 & £5,091 respectively. That’s over £11,000 outstanding on an initial loan of £7,000 not including the £13,000 I’ve already made in payments!
Lewis Group & Howard Cohen have both told me Welcome will not except any settlements and will only take full settlement, but I don’t have that kind of money.
My question is this: My credit rating is 311 on Experian. One loan shows as a default, but strangely one show ‘6 payments late’. I desperately want to clear these debts and have now problem paying what I owe them but come on, £24k for borrowing 7 bags of sand!
What should I do? As I have the defaults I was under the impression that they stay on my credit file for 6 years regardless so should I just stop paying the creditors and wait for it to clear my credit file or more importantly, if I clear the money I owe will this help to improve my credit rating or will it be this bad for 6 years no matter what I do? Can these company take me to court?
My ultimate aim is to try and buy a house is about 18 months, but with this hanging over me I don’t have a chance!
Thank you all in advance!

Tixy

You could just stop paying - but of course they might take you to court for that sort of level of debt - and that would mess up your credit file for much longer. And they'd have 6years to take any court action (so could in theroy mess up your file for the nearly 12 years more.)

I would suggest writing to ask both debt collectors for a full transaction history / breakdown of the debt. But they are likely to be right based on the very high aprs that these debts have, which really racks up the balance when you miss payments.

Welcome would almost certainly accept a reduced full & final settlement if you could save a lump sum. Although at what percentage is hard to guess.

Bravehearted_2

Little chance of a house with all that debt.

And they are probably right - it's called interest.

Stop paying and you'll wreck your file more.

KingElvis

Housey go bye bye until you've dug your way out of this hole.

DCFC79

I believe this is how loans work, if you default for whatever reason the amount you owe doesn't get less or stay at same amount but it increases everytime a payment is missed.

vikylove

that's just the way it works. I stopped getting loans 2 years ago because of this.

DCFC79

vikylove wrote: »

that's just the way it works. I stopped getting loans 2 years ago because of this.

Not wanting to put you off posting but the thread was over 1 year old.