P Flag (Partial Settlement) to write off debt in full

NotAHappyBunny_3

Hello People!

As with most/everyone here, I'm up to my ears in debt. And have been for 3 years since a business venture went badly wrong...

I currently have a debt management plan with PayPlan, which I set up as soon as I started to default on my creditors. But my problem is that I cannot hope to pay off the 45K of debt, at a rate of more than £100 a month.

Payplan have contacted me today, basically telling me that my creditors are adding interest just as fast as I'm paying them. Resulting in me not even making a dent in the 45K.

So having looked through the forum here, I have a few options.

1, Keep treading water, and never be free of the debt or stress!

2, Bankruptcy - Not a great option, as I would lose my house & limit my work possibilities for life.

3, IVA - Which in my eyes seems a lot like bankruptcy, as I could be forced to re-mortgage the house at some point.

4, Suicide - Speaks for itself...

5, Sell the house, and use what equity I have to make offers to my creditors.

Option 5 seems like the best plan, but I want to confirm what will happen to my credit file if I make Partial settlements.

As I understand it, these will be on my file for 6 years, and then wiped. Yes/No?

If they are wiped after 6 years, is it also true that the 6 years starts from when I first defaulted on the debt?

As in my case this would be 3 years ago. Meaning that the P Flag will only be on my credit file for another 3 years, and after this my file will be clean. Thus allowing me to rebuild my credit score again!

I really want to confirm this is true, so that I can make the right decision and get try to get this monkey off my back. As my current train of thought is to just go bankrupt, and get some release from the stress. Which considering the poor advice PayPlan gave me, wish I'd done 3 years ago...

Thanks for any help clarifying this for me! :T

Cheers,

Not a Happy Bunny (Shoot the Bunny!!!)

billinghamfan

My understanding is that in if you pick option 5 your file will be clean in 3 years but if you pick IVA or BR it won't be clean for 6 years

lindann_2

I can see how stressful all payments to creditors, not actually paying the original debt off.. did they ask for creditors to freeze interest etc?...which maybe peanuts.. also would your house be worth be able to pay some debts, also would you be able to be rehoused etc.. so dear private rental... It is how quickly to sell your house given the markets..also would you have to sell at a loss, too. l wish you best of luck in choosing what to do..

NotAHappyBunny_3

Thanks for the replies so far! :-)

I'm fairly sure/lucky that I have enough equity in my property to pay a proportion of my debts, but not all of them in full. So bankruptcy was still an option for me.

And no I don't have any other place to live if I sell my house, but needs must when the devil drives. A caravan in a lay-by would be better than the stress of debt! And i'm sure most would agree!!! lol

I did query PayPlan about their initial claims that they can normally freeze interest. But at the end of the day they are a business, and without customers/punters/mugs/victims they don't make money. So in response today about my query about freezing interest, the representative fobbed me off with a load of scripted spin about every case is different and they try their best to freeze interest, but it is purely at the discretion of the lender! Apparently this was told to me at the start! LOL Yeah right! - Think I would have remembered being told that I might be in the same position for years, and bankruptcy might be my better option from the start.

But if I went bankrupt, then there would be no piece of pie for PayPlan. So do i believe that they made that clear. Do I hell!!! - Being conned is one thing, what I can't stomach is being expected to swallow a lame excuse of them making it clear at the start!

But that is water under the bridge, and they may have sort of done me a favour, as if I can agree partial settlement. I will have already served 3 years of my sentence, and due for parole in another 3! (Fingers crossed)

Gimpsdad

BR will affect your credit file for 6 years from the petition being rubber stamped.

It is more than possible these days to propose an IVA for £100, the attraction being that you keep control of your assets. Yes, you have to investigate the remo clause when the time comes, but if you have little equity then, as it stands now, the likelihood of you being able to do that is very slim.

Good luck with whatever you decide.

sickasachip13

Hey bunny,

Please rule out option 4!

On the default and credit file - I queried this recently too and basically the 6 years starts ticking upon the default. So, if you had a default registered in 2010, did a F&F settlement in 2015, the debt record will disappear from your file in 2016.

SAAC