arrangement to pay - mortgage application

ALIBOBSY

Seen people discussing this on another forum. It does seem unfair that its seems to penalise those who actually pay their bills.

IE Debtor A and B have a credit card each and both have issues in say 2006.

A defaults completely and it is sold onto debt collectors, wether they settle the account later OR NOT it falls off the credit file in 2012.

B calls the card company and makes an arrangement to pay, later increases payments and finally clears the debt in 2010. The file stays on the credit file till 2016.

This effectively means contrary to what the banks tell us, if you can't make the full payment in many cases you actually would be better off to default in full so that no matter how quickly you catch up and pay the debt off the file is clear from 6 years after the default.

If Thruge is correct and legally the arrangement is classed as a default then you should be able to argue with the bank to either have the AP marker removed when it is 6 years old-even if the settlement keeps the rest of the marker on your file for a few years after that.

Ali x

Thrugelmir

ALIBOBSY wrote: »

If Thruge is correct and legally the arrangement is classed as a default then you should be able to argue with the bank to either have the AP marker removed when it is 6 years old-even if the settlement keeps the rest of the marker on your file for a few years after that.

Ali x

Why? Its a true reflection of an individuals credit record. Nothing to argue about it, as its factual.

AliceBanned

ALIBOBSY wrote: »

Seen people discussing this on another forum. It does seem unfair that its seems to penalise those who actually pay their bills.

IE Debtor A and B have a credit card each and both have issues in say 2006.

A defaults completely and it is sold onto debt collectors, wether they settle the account later OR NOT it falls off the credit file in 2012.

B calls the card company and makes an arrangement to pay, later increases payments and finally clears the debt in 2010. The file stays on the credit file till 2016.

This effectively means contrary to what the banks tell us, if you can't make the full payment in many cases you actually would be better off to default in full so that no matter how quickly you catch up and pay the debt off the file is clear from 6 years after the default.

If Thruge is correct and legally the arrangement is classed as a default then you should be able to argue with the bank to either have the AP marker removed when it is 6 years old-even if the settlement keeps the rest of the marker on your file for a few years after that.

Ali x

I emailed Checkmyfile and they did say 2016. It does mean I have had the AR on my file for longer than I would than if I had ignored it and refused to pay anything and let it go to a debt collector. I don't think it is a true reflection in a sense as it means the AR part is on my file for 9 years and not six.:(

AliceBanned

Thrugelmir wrote: »

Why? Its a true reflection of an individuals credit record. Nothing to argue about it, as its factual.

I agree with Alibobsy; not just because I am being too heavily penalised by having this on my file for 9 years, despite having a clear account for six, and because I continued to pay rather than because i didn't. People do reform their behaviour and i've worked hard for all this time to correct things, and there comes a point where it hardly feels worth trying as I am branded a bad debtor for 9 years.

AliceBanned

MagicCats wrote: »

Late payments etc will be a reason not to lend. However I'm not convinced the marker will show until 2016. Settled or default accounts drop off your file after six years, and I'm sure that the payment history only shows the last six years so in theory if you have an 'AP' in a monthly payment box instead of a tick it will disappear at the six year point.

Where exactly on your file does it show arrangement to pay? I have a copy of my file from Check My File so can look at it and see where it could be recorded.

Thanks MagicCats. Checkmyfile said that it would but I'm also confused by this. I thought the same - the ticks gradually disappear. It shows AR from 2006 up to Feb 2007 and after that ticks until Settlement (some time 2010). They are counting the six years of when it will be on my file from this date in 2010 but I thought the same, the ticks wouldn't be there for six years after that. Checkmyfile just said that the default is there for ever, or some rubbish like that.

Thrugelmir

AliceBanned wrote: »

I don't think it is a true reflection in a sense as it means the AR part is on my file for 9 years and not six.:(

Don't assume its so easy. Total default on a debt or significant shortfall in settlement , and you would may well find yourself registered on the Nationalhunters database. There's no hiding in this technological age.

AliceBanned

Thrugelmir wrote: »

Don't assume its so easy. Total default on a debt or significant shortfall in settlement , and you would may well find yourself registered on the Nationalhunters database. There's no hiding in this technological age.

That's ridiculous. There was no shortfall in settlement and no default. i just asked them to freeze interest after I had paid god knows how much in fees (all reclaimed of course:D). I had good reason at the time for the financial difficulties and it's not a crime to have those.

Thrugelmir

AliceBanned wrote: »

That's ridiculous. There was no shortfall in settlement and no default. i just asked them to freeze interest after I had paid god knows how much in fees (all reclaimed of course:D). I had good reason at the time for the financial difficulties and it's not a crime to have those.

I was merely pointing out that defaulting totally and not settling fully. In itself isn't the answer. You have done the right thing by settling the debt. In the longer term it is beneficial.

didaiva

The problems I see is that they ask the question "Have you ever been bankrupt or entered an arrangement with creditors" on the mortgage application. If you answer No then you get done for mortgage fraud and if you answer Yes then it gets declined anyway. Catch 22

Ever is a very long time, long after the credit files are cleared. It's not good

AliceBanned

Not sure what you mean by your last sentence?

All I can do is make everything else really good on my file. I can't change mistakes from the past and I think they are being ridiculous if they don't lend if I do this. I suppose that's just the way banks are behaving at the moment but having said that I haven't done the full application yet and the broker said it will really come down to doing that and then seeing whether they will look at the overall picture. He said at the moment a couple of missed payments are enough for them to refuse people.