Default Advice needed

mrb999

Hi, I defaulted on 2 credit cards back early 2010 which are showing on my credit file as defaulted I now pay an agreed monthly figure with the companies. I have offered to pay off a credit card at an agreed sum with the recovery agent and have had a letter back saying they will register a default on my credit file.
Two questions is this a new default or are they referring to the one already on my file?
Will I have to wait 6 years from date of settlement or is 6 years from the default date for it to be removed from my credit file

Many Thanks for your time at looking at this and any replies that you may give

Tixy

Its 6 years from the date of default.

If this is a debt that already has a default on your credit file in the name of the creditor - a debt collector can only add a default if the creditor removes their entry - and even then the default must be the same date as the creditor used.

If they put the default on with a later date then you will need to complain to get them to correct (its handy if you keep a copy of your file showing the original default date in case this happens).

mrb999

Thanks for your reply.

Do you know what would happen to the
default after 6 years if I haven't settled the total amount?

E.g the total debt is say 5k but by only paying £30 per month the
full amount will not be paid back by the 6 years?

Thanks again

Tixy

It will still drop off your file if unpaid or partially paid (though you will still owe the money)

The creditor/debt collector/joe bloggs are not allowed to add it back to your file after it has dropped off.

The only time it could appear again on your file would be if they obtained a CCJ for this debt - but that would go in the CCJ section of your file (thats unlikely to happen as you are repaying it).

mrb999

Ok so the default date will remain as it is (2010) meaning it will drop off my file in 2016 regardless of whether I still owe them any money?

Plus as I am meeting the agreed monthly repayments they cannot take out a CCJ against me after the six years is up?

I'm assuming that once the 6 years are up and the default drops off I will continue paying them at an agreed amount until the total amount has been paid back?

I'm just making sure I know where I stand here and your advice has been most helpful!

On another note.....if we aren't planning on getting credit or moving house before the default drops off then what is the incentive to pay it back early?

Tixy

Once you have fallen into arrears it is always possible that a creditor (or debt collector) could start court proceedings to try to obtain a CCJ.
Even where they have previously agreed to reduced payments.

As long as you keep up with repayments - and they believe you are paying what you can reasonably afford then a CCJ is less likely - as it costs them money to obtain a CCJ - and the judge would usually only order you to pay an amount you can afford.

fermi

As Tixy say, just because a default has fallen off, that doesn't mean they can't go for a CCJ if you were to stop paying. That would mess up your credit file worse than the default ever di, and for another 6 years.

"Incentive" would be that you don't want that to happen.

mrb999

Ok thanks again, we will hopefully have paid them back within the 6 years as they have already offered a reduced amount to pay it all off. We are just unsure whether the crack on with this now by borrowing off family or whether to start a family which we are desperate to do but just want to be sensible about our financial situation

mrb999

Also at what point do you recommend applying for credit building credit card to try and rebuild my file a bit?

Tixy

mrb999 wrote: »

Also at what point do you recommend applying for credit building credit card to try and rebuild my file a bit?

A lot of differing advice on this.
I'd say around 6months before you expect to finish paying your debts.
Or 6months to a year before your last default is due to drop off - whichever is the earliest.

That way you can start building up a good credit history so that when the old history has gone you are not left with nothing on your file - and should then be in a position to access mainstream credit.

mrb999

Excellent, we have managed to pay off a few debts recently however apart from our 2 overdrafts these 2 cards are the last thing to go (apart from the mortgage of course)

We will get there in the end!