Settlement options!

andyf3050

Hi everyone,

I'm trying to settle a debt of mine with Natwest. I have an outstanding loan and an overdraft (it all works out to around 2327). I've been on a repayment plan with them for about 12 months and only been paying £10 a month and I'm now in a better position to try and get this debt shifted. I've contacted them and they've offered me a couple of options which, to be honest, sound reasonable.

1) £388 per month for 6 months. The debt will be fully settled.

2) One payment of £1300. The debt would be accepted as partially settled.

All I'm wondering is, how will this affect my credit report? The person I spoke to assured me that with option 1 it would show as fully settled but with option 2 it would show as partially settled. Is this going to affect my chances of getting credit in future? We are looking to move house and although we have a mortgage now, we aren't really in a position to get another one until this is sorted.

Thanks in advance,
Andy...:rotfl:

MusicalLawyer

I assume you have defaulted on the account? Do you know the date of the default?

A settled default looks SLIGHTLY better than an unsettled one. Therefore i doubt there's much difference between a Fully Settled and Partially Settled debt.

All I would say is that, if you have the £1300 to pay off, make sure it's on the understanding that this really is a FULL and FINAL payment on the account, and that they won't be pursuing you for the remaining balance - get this in writing.

As, I'm assuming, the account is in default already, I wouldn't you'd be able to get another mortgage until it's gone anyway, as it'll still be there settled or unsettled.

Hope this has helped in some way!

andyf3050

Thanks Kelly,
Yes the account is defaulted (2010 August IIRC). When I spoke to the advisor yesterday they told me that the debt would be updated as paid on my credit report but will it stay on there for a while because it was originally defaulted? They didn't mention anything about that. Would it be on my file for six years from the default date or the settlement date...? Thanks again...!

Tixy

Still only on file for 6years from the original default date. It will show that it had defaulted and that you no longer owe anything (and either that it was partially or fully satisfied depending on which option you take)

Once settled but for the remainder of the 6years you should be able to get a new mortgage but probably not from the main high street banks, you'd likely need to approach an independant mortgage advisor with a copy of your credit files so they can find a lender who would consider you (who won't be as cheap as the high street banks).

bargainbetty

If the debt is not marked as FULLY satisfied, it might come back to haunt you. You want 'full and final' and you want it in writing, whichever option you take.

Good luck