Debt Relief Order or Full and Final Settlement offer?????

dannydani_2

hi, im hoping somebody can advise me a little plz.....

im currently trying to get my credit report higher due to hoping to get a mortgage asap (hoping for about 12 months or so).
i have had 2 unpaid debt on my account since coming out of work a few years ago.
both debt are to Metropolitan Collection Services (in house DCA for HSBC) one is from a credit card for £800 and the other is from my currant account with a loan for £2350. both of these debts got passed to MCS in jan 2009 and i have been paying £5 to both accounts each month since.
i recently checked my credit score with experian and equifax and both show the credit card as defaulted (this is the only red on my account) and the loan as settled. i have called MCS today to ask what a do owe them (incase due to an error my loan has been cancelled. first contact since early 2009) and they confirmed the amounts above. now my thoughts were to offer a full and final settlement offer but i today spoke to the CCCS and they explained that i can apply for a debt relief order.
now what i am wondering is, what will affect my credit score more in the long run, going for the F&F or the DRO?

thanks in advance for any advice.

also please ask away if you have any questions, please ask away....... :)

nottoolate

dro is a bad as bankruptcy on your credit recvord

[Deleted User]

if you do a dro then you wont get a mortgage for years,probably simlar if you do a f&f,mortgage lenders are only interested in squeeky clean borrowers atm

endora

Were you defaulted in 2009? if so, the default will drop off in another 3 years so better to sit it out and wait. Don't even think about a DRO - as posted above, it's just as bad as BR and not really necessary in your case.

fatbelly

If you've got a lump sum, do F&F.

If you've less than £300 capital, don't own property, any car you own is worth less than £1000, your surplus income is less than £50 per month and you have no prospects of things improving, then you won't be thinking about a mortgage and your credit file isn't important - do a DRO.

MUMZ2BEE

I too would apply for a DRO.

You can still have a basic bank account, and you can have credit but you need to tell the company whom you are apply for credit about being on a DRO, and a DRO will last for 12 months.

After 12 months, all of year debt is cleared, but it does stay on your credit file for about 6 years.

I am personally thinking of applying for a DRO myself as I have around £10000 debt and a credit card with whom I am hoping to get unenforced!!

Good luck!!

nottoolate

if your finaces are so bad that you are consider a dro, then how on earth do yopu think a mortgage in 12 months is going to be possible?

lvm

Definitely go for the full and final settlement although this depends on how much you have to pay them off. If you've been paying them monthly and they are still in-house you won't get a brilliant discount although may be decent enough to settle. It's strange about the loan which you say appears as settled. In my case, the only reason one came up as settled is because it was sold to another DCA and I think they cocked up a bit and have 2 entries now.

Anyway, you'll still be lucky to get a mortgage in 12 months time. There are stories on the house buying thread with people being turned down a month before a default comes off your report. If you were absolutely desperate to get a mortgage, you'd be looking at horrific interest rates and you'd need a minimum of 25% deposit. If you can't do that, looks like it'll be 2015 before you can buy a house...sorry!

dannydani_2

Thank you all for the replys, im going to stay way clear of the dro as advised. Now, if i leave the debts as they stand now, with the default on my credit report, would there be any chance of me getting a mortgage b4 they fall off my reprt? If so, what deposit would i be expected to raise? House is £85000 that im wishing to buy. Thanks again for all the help.