Struggling with debt? Ask a debt advisor a question

StepChange_James

Minifig44 wrote: »

Hi,

I have a debt that has a default date of 31/08/2009 which I had been steadily paying for about three years until just recently. The default always shows as DF on my credit report up until I ceased payment with them. I had moved so gave the DCA my new address and discussed the changes in my financial circumstances. They agreed to put a hold on the account for 30 days so I could have a little breathing space, they made correspondence with me detailing the updated address and the hold on the account.

Since then (April 2015) I have made no further contact or payments and they too have not contacted me in this time. My credit report is still showing the 'D' on the account but as of April it now displays '--'
My questions are:

Is there any reason they have made no contact with me? And will the default disappear from my credit report on the 31st of this month?

Many thanks for any advice offered.
Kind Regards,
Ellen

Hi Ellen,

It's hard to say what's going on with the debt collection company. I've spoken to plenty of other people that have had similar experiences, so it's no unusual for creditors to go quiet for a while.

It doesn't sound like your change in address is the issue, as they've already corresponded with you at the new home so it's on their systems.

Defaults should only stay on your credit file for six years from the date they're entered, so yes I'd expect this one to come off. In practice it may not be as precise as it immediately being removed on the 31st but within a few weeks it should be gone.

If you're still seeing information that's over six years old on your credit history then contacting the credit refrerence agency will usually be enough to have it removed. It should all happen automatically but I've heard of the odd occasion where it's not updated.

Even after the default notice goes away the debt will still be there. It's good that you're not getting hassled at the moment but it's very unlikely they'll leave you alone for very long.

If you're not sure about the best way to tackle the debt I'd recommend using our online advice tool, Debt Remedy: http://www.stepchange.org/DebtRemedy.aspx. It's free, takes about 20 minutes and will give you a personal action plan to deal with your debts.

Kind regards

James

wpmphotography

Hi,


I have around £12,000 worth of credit card debts to Tesco, Santander and Barclays.
I can just about pay a little more than the minimum each month for all 3 cards.
I have been living in my overdraft for around 6 years now.
My partner does not know about these cards as I worry she'll leave me.
We have a joint mortgage and are hoping to move next year as we have just got a little baby.
Will we be able to apply for a new mortgage when we move or will the debt turn up when re applying to the bank?


I need urgent help!!
What can I do??
Is there any loans out there for debt consolidation? As they may be quicker and cheaper? I don't know


Thanks, much appreciated

Hair.comb

Ditto to wpm. I am in the same situation,

Hair.comb

I am new...be gentle.

I have around £12300 of cc, overdraft etc.
Just gone through the online form with StepChange and it shows I will pay £141 with DMP.

Everything is up to date payment wise, no arrears, no defaults but I am paying very little over the minimum and have just started to go over my O/D limit. Eek...

Is DMP the right thing for me?

Will I have shot to bit credit score? It's rubbish anyway but I want it to be good at least.
I have a car finance with 15 months to go. My car is going to cost me in repairs I think so can I get finance again (no flashy car required, needs to be new/ warranty etc as my job involves driving night and day).

Do I have to have much contact with StepChange as I am a friendly but "let me get on with it" type.

I wonder, can it be set up online? I barely get time to make a call!

Or should I try self managed?

Sorry for the ramble. Lots to take on board.


Look forward to chatting.

StepChange_James

wpmphotography wrote: »

Hi,


I have around £12,000 worth of credit card debts to Tesco, Santander and Barclays.
I can just about pay a little more than the minimum each month for all 3 cards.
I have been living in my overdraft for around 6 years now.
My partner does not know about these cards as I worry she'll leave me.
We have a joint mortgage and are hoping to move next year as we have just got a little baby.
Will we be able to apply for a new mortgage when we move or will the debt turn up when re applying to the bank?


I need urgent help!!
What can I do??
Is there any loans out there for debt consolidation? As they may be quicker and cheaper? I don't know


Thanks, much appreciated

Hello,

Firstly, congratulations on the new arrival.

I'd say it's very likely that your debts will disclosed when you apply for a new mortgage. Firstly they'll almost certainly ask you about unsecured debts you've got, and lying on a mortgage application is a really bad idea. Also they'll carry out a credit check which would show them there anyway.

I don't know how much of an impact these debts will have on your chances of getting a mortgage, but it could be a factor. A mortgage broker might be better placed to give you an assessment of your chances of being approved.

Some mortgage companies also have facilities to transfer your existing mortgage to a new property too (subject to fees and checks).

It sounds like dealing with these debts is the immediate priority though. Debt consolidation works for some people, but I've spoken to many people that have found it's made their situation worse.

What often happens is the new loan pays off the cards but then the cards are run back up again. Or sometimes the only lenders willing to offer a consolidation loan charge so much in interest, spread over a longer period and it ends up being very expensive.

So debt consolidation is something I'd recommend using a great deal of caution before looking into it.

You may find it useful to go through our debt advice process before making a decision. We can help you make a budget and work out what you can afford to pay towards your debts.

If there's not enough to keep up with the minimums then we can discuss debt solutions to try and deal with them. I know you mention you're paying the minimums at the moment but if you're stuck in your overdraft it may be that you're relying on credit to cover your expenses.

You can get our advice using our free online advice tool, Debt Remedy. Here's the link: http://www.stepchange.org/DebtRemedy.aspx.

Keeping debts secret from a partner can be very stressful. You mention that you fear she'll leave you if you don't tell her but it's also likely to be hard to keep the debts secret during any future mortgage application.

I'm afraid I don't have an easy piece of advice to offer about this kind of situation. The people I've spoken to in the past with partner's unaware of their debts have usually found it a great relief when they've shared the details with their partner but every relationship is different.

I hope this has been useful and please feel free to post again if you've any other questions.

Kind regards

James

StepChange_James

Hair.comb wrote: »

I am new...be gentle.

I have around £12300 of cc, overdraft etc.
Just gone through the online form with StepChange and it shows I will pay £141 with DMP.

Everything is up to date payment wise, no arrears, no defaults but I am paying very little over the minimum and have just started to go over my O/D limit. Eek...

Is DMP the right thing for me?

Will I have shot to bit credit score? It's rubbish anyway but I want it to be good at least.
I have a car finance with 15 months to go. My car is going to cost me in repairs I think so can I get finance again (no flashy car required, needs to be new/ warranty etc as my job involves driving night and day).

Do I have to have much contact with StepChange as I am a friendly but "let me get on with it" type.

I wonder, can it be set up online? I barely get time to make a call!

Or should I try self managed?

Sorry for the ramble. Lots to take on board.


Look forward to chatting.

Hi Hair.comb,

Welcome to the forum and thanks for posting. We'd never be anything but gentle, but I appreciate how unsettling it can feel to face up to your debts.

If Debt Remedy has recommended a debt management plan(DMP) and you're happy with all the figures in your budget then it's very likely that a DMP is your best option.

Whether to do it self admin or through us is a matter of personal choice really. You'll be aware that our DMPs are free, so there's no money difference. The big difference is the amount of control. Some people prefer to be very invovled, so do self-admin and others prefer to not have as much to do with their creditors, so choose DMP.

There may be the odd occasion where you might need to call us but the majority of the time you can contact us by email instead. In fact we've got clients that are on DMPs with us that have never spoken to a member of staff on the phone. We're a friendly bunch though and we'll do our best to help if you do need to speak to us.

Whichever way you do a DMP it's going to mean making reduced payments to creditors by the sounds of it, so your credit file is going to show that. Negative information is stored on their for six years from the date it's entered so it's quite likely to affect your ability to get credit.

The car situation on a DMP would be tricky. It sounds like having a reasonably new car is a requirement of your job. So driving around an unreliable older car could put your job at risk. On the other side of the coin, paying out a lot of money to car finance every month means less money available for other debts. So it's a difficult balance to strike.

If you've got a specific clause in your employment contract that requires you to drive a newish car then it's likely creditors will be more understanding of car finance payments being given priority.

Whether you'll be approved for the finance on a car is a different matter, and something that would be down to the finance companies.

I hope, in a round about way, this has answered your questions. If you'd like to talk about your situation more I'd recommend using the contact details you'll have been given when you completed Debt Remedy so they can look at your details. (Theres an email address as well as a phone number.)

Kind regards

James

Hair.comb

Thank you James. What a lovely response.

sourcrates

Hair.comb wrote: »

Thank you James. What a lovely response.

Hi,

Hair comb, feel free to ask for help in the general DFW forum, we are a friendly bunch as well, lots of good advice available. 😃

Thrugelmir

wpmphotography wrote: »

Will we be able to apply for a new mortgage when we move or will the debt turn up when re applying to the bank?

Debt will have an impact. That's a certainty. The overdraft and fact that you pay little more the minimum on the cards. Suggests your finances aren't overly healthy. Affordability is likely to a major issue. Omitting to disclose your debts could also cause you issues so not a recommended route to attempt.

ChrisMc182

I have a default for £550 that will have been defaulted for 6 years December 2016, myself and my partner are looking to buy a house in 2 years, if I paid this off partially satisfied the now would I be able to improve my credit more by doing that and using a credit card to
Build it back up rather than waiting for it to fall off next year?