Struggling with debt? Ask a debt advisor a question

StepChange_Rachael

Hi

Welcome to the forum and thanks for posting.

When it comes to your credit file it can be difficult to say exactly how it will be impacted as your score can be affected by many different things.

Notes on your credit file in most cases stay on your file for 6 years and then are removed. So In most cases the default will show from the day it was marked on your credit file and then will come of 6 years later and then no longer have an impact on your credit score.

The debts will stay on your credit file from the last time the creditor updated the information of the debt.

From my understanding as the creditor has agreed to stop chasing for the debt they’ll probably mark this as a partial settlement and shouldn’t further update the debt information on your credit file. This then would be removed from your file 6 years later.

A partial settlement might have more of an impact on your credit file than a full and final settlement as future lenders might be less likely to lend if a debt is partially settled than if it is fully settled.

It’s important to keep a copy of any written confirmation from the creditors so you have this for future reference if you need it.

There are various ways to improve your credit file and score. If you follow this link you can find out more information about credit files and how to improve them from moneysavingexpert.com

Thanks
Rachael

luke5121 wrote: »

Hi advisor's - hoping I'm posting the correct section and would appreciate some insights.

I have a default on my account, which was last updated this month on my report:
Account start date 24/09/2011
Opening balance £ 167
Repayment frequency Monthly
Date of default 20/06/2012
Default balance £ 167

I had disputed the debt, following advised steps, asking for evidence etc. Long story short the outcome was this:
Following receipt of your complaint, attempts have been made to obtain further information from you to understand why you believe you are not liable for the above account, which you have confirmed you do not wish to discuss. Therefore, given the circumstances, and with a view to resolving this matter without further delay, I have decided to close your account and confirm that we will take no further action to recover the debt. This is done without any admission of liability or wrongdoing.

So they won't clear the debt, but they will stop chasing me basically. I have gone through the financial ombudsman but they are happy with this resolution. Regardless, my credit score sucks with this on - currently a 549 (noodle) (1/5).

My questions are:
1) Will this drop off my report in 2018? Will my credit score then be improved? I read notes about it still being somewhat visible?
2) I pay all my bills on time, this is the only default on my account - is this the sole reason my credit is so poor?
3) What happens to my credit score if I set up a plan to pay it/ is it worth doing so? For the sake of what's now £328

Thanks in advance MSE!

luke5121

Thanks for your insights Rachael. I do however have a few more questions if you would be so kind!

You mentioned defaults dropping 6 years post default date, which was 2012 in my case. You then mentioned that they shouldn't be updating the debt, however it shows to be last updated last month? Does this mean they are and is this debt rolling/ will not drop off?

You speculated them to be marking it as a partial settlement and should drop off 6 months later - is this from the settlement date? My credit score hasn't actually moved since this 'settlement' and this is still showing as a default on my accounts.

Thanks in advance...

I'm swaying towards clearing this to be honest!

StepChange_Rachael wrote: »

Hi

Welcome to the forum and thanks for posting.

When it comes to your credit file it can be difficult to say exactly how it will be impacted as your score can be affected by many different things.

Notes on your credit file in most cases stay on your file for 6 years and then are removed. So In most cases the default will show from the day it was marked on your credit file and then will come of 6 years later and then no longer have an impact on your credit score.

The debts will stay on your credit file from the last time the creditor updated the information of the debt.

From my understanding as the creditor has agreed to stop chasing for the debt they’ll probably mark this as a partial settlement and shouldn’t further update the debt information on your credit file. This then would be removed from your file 6 years later.

A partial settlement might have more of an impact on your credit file than a full and final settlement as future lenders might be less likely to lend if a debt is partially settled than if it is fully settled.

It’s important to keep a copy of any written confirmation from the creditors so you have this for future reference if you need it.


Thanks
Rachael

StepChange_Rachael

Hi Luke

Thanks for getting back in contact.

The default and the debt will show as a different note on your file. As you mentioned the default was added in 2012 it should be removed in 2018.

The debt however will remain on longer as for instance if you make a payment to a creditor they’ll update your file with your updated balance.

If a creditor stops updating your file then after 6 years it will be removed. If the creditor continues updating the file to say the amount is outstanding this could remain on your file until the creditor stops updating it or until it is paid in full in which case the creditor will note the debt as paid in full and the debt will be fully settled on your file.

Usually in cases where the creditor agrees to stop chasing for the debt they’ll mark the debt as partially settled and then stop updating your credit file which means it will be removed 6 years later. It isn’t guaranteed the creditor will stop updating the file.

I hope this answers your questions.

Thanks
Rachael

luke5121 wrote: »

Thanks for your insights Rachael. I do however have a few more questions if you would be so kind!

You mentioned defaults dropping 6 years post default date, which was 2012 in my case. You then mentioned that they shouldn't be updating the debt, however it shows to be last updated last month? Does this mean they are and is this debt rolling/ will not drop off?

You speculated them to be marking it as a partial settlement and should drop off 6 months later - is this from the settlement date? My credit score hasn't actually moved since this 'settlement' and this is still showing as a default on my accounts.

Thanks in advance...

I'm swaying towards clearing this to be honest!

dod929

Hi,
Just wondering I asked Robinson Way to 'prove' I owe an old Santander account, I opened it in the whole switch and get £100 but never made the swap from my old account and never used the card.

I was in debt already and moved around a bit and just got into a habit of never opening post so didn't know until I got my head out the sand and by then it had been sold a few times.

I asked them to prove the debt around 9 months ago, I have had 4 letters saying we are working on proving this but the original account holders (Santander) are not getting back to them and they will get back to me asap.

Ultimately my question is: Do they have to prove it within a certain time scale? The original account was from 2011 so would be close to being statute barred? Thanks in advance!

Former_StepChange_Matthew

Hi,
Just wondering I asked Robinson Way to 'prove' I owe an old Santander account, I opened it in the whole switch and get £100 but never made the swap from my old account and never used the card.

I was in debt already and moved around a bit and just got into a habit of never opening post so didn't know until I got my head out the sand and by then it had been sold a few times.

I asked them to prove the debt around 9 months ago, I have had 4 letters saying we are working on proving this but the original account holders (Santander) are not getting back to them and they will get back to me asap.

Ultimately my question is: Do they have to prove it within a certain time scale? The original account was from 2011 so would be close to being statute barred? Thanks in advance!

Hi there,

Thanks for getting in touch.

This is a difficult question to answer as I am unsure how you requested that Robinson Way proves the debt belongs to you. If you verbally asked the creditor to prove the debt was yours then there isn't a timescale to prove this unless you have made a formal complaint with Robinson Way. The debt is still enforceable but if you make a formal complaint to Robinson Way, they will have 8 weeks to provide you their final response. If you're not happy with their final response, you can take it to the financial ombudsman to make a formal complaint and they will investigate this complaint from an impartial viewpoint. They could rule the creditor is at fault or you are liable to pay this back.

If you requested this proof under sections 77 - 79 of the consumer credit act, the debt is not enforceable unless the creditor can provide you with the information you have requested for. If Robinson Way can provide this information, the debt becomes enforceable again.

If you requested that Robinson Way sends you information about the debt under the data protection act, then the creditor has 40 days to comply with your request. Both of these examples are explained here.

Debts become "statue barred" if:

• You have not acknowledged the debt in writing within a 6 year period
• You have not made payment to the debt within a 6 year period
• The creditor has not obtained a county court judgement against you

This would mean that assuming Robinson Way does not obtain a county court judgement against you and you have not acknowledged the debt in writing or made a payment since 2011, then the debt will become statue barred some time next year.

I hope this helps
Matthew

beccaspex

I agreed a full and final settlement with cabot for a credit card debt. They wanted the payment on 4 instalments with the final instalment being due by 28 01 2014.
I paid the 2 final instalments together before the final instalment was due. Total 4150 paid as per agreement.
I have today received a letter from mortimer Clarke solicitors threatening ccj on behalf of Cabot. Surely I don't owe them anything? I'm not sure what I need to do next. All advice appreciated.

carlosat4

Hi advisors, how do you barter with debt companys to state i am fully satisfied when only paying 80% of my debt

dod929

StepChange_Matthew wrote: »

Hi there,

Thanks for getting in touch.

This is a difficult question to answer as I am unsure how you requested that Robinson Way proves the debt belongs to you. If you verbally asked the creditor to prove the debt was yours then there isn't a timescale to prove this unless you have made a formal complaint with Robinson Way. The debt is still enforceable but if you make a formal complaint to Robinson Way, they will have 8 weeks to provide you their final response. If you're not happy with their final response, you can take it to the financial ombudsman to make a formal complaint and they will investigate this complaint from an impartial viewpoint. They could rule the creditor is at fault or you are liable to pay this back.

If you requested this proof under sections 77 - 79 of the consumer credit act, the debt is not enforceable unless the creditor can provide you with the information you have requested for. If Robinson Way can provide this information, the debt becomes enforceable again.

If you requested that Robinson Way sends you information about the debt under the data protection act, then the creditor has 40 days to comply with your request. Both of these examples are explained

Debts become "statue barred" if:

• You have not acknowledged the debt in writing within a 6 year period
• You have not made payment to the debt within a 6 year period
• The creditor has not obtained a county court judgement against you

This would mean that assuming Robinson Way does not obtain a county court judgement against you and you have not acknowledged the debt in writing or made a payment since 2011, then the debt will become statue barred some time next year.

I hope this helps
Matthew

Thank you, it was verbally unfortunately, one day I will learn my lesson!
If I put in a formal complaint stating the data protection act and sections 77 - 79 of the consumer credit act after I have made a verbal request will the 8 week/40 day time limit come into force?
I have never spent or paid any money into or from this account or made any contact at all, just worried that it is coming to the 6 year point and I already have a previous CCJ and don't want to get any more!
Many thanks!

Former_StepChange_Matthew

I agreed a full and final settlement with cabot for a credit card debt. They wanted the payment on 4 instalments with the final instalment being due by 28 01 2014.
I paid the 2 final instalments together before the final instalment was due. Total 4150 paid as per agreement.
I have today received a letter from mortimer Clarke solicitors threatening ccj on behalf of Cabot. Surely I don't owe them anything? I'm not sure what I need to do next. All advice appreciated.

Hi there,

Thanks for your post and welcome to the forum.

I can understand your concern with this, especially as you are under the impression that there is nothing to be paid as it was agreed that this would be written off.

I'd recommend that you make a formal complaint to Mortimer Clarke , stating that the debt was cleared in full and final settlement and that you would like this to be looked into. Mortimer Clakre then has 8 weeks to to look into your complaint and resolve this or give you their final response. If this is not resolved or you are not satisfied with their final response, you can escalate this to the Financial Ombudsman to look into this for you (you can find their details here ) .

If you have received written confirmation that the debt would be written off, you should send a copy of this to Mortimer Clarke when making your complaint. If not, Mortimer Clarke should still investigate your complaint and look into this for you.

Certainly though, if you have stuck to the terms of the settlement offer and your creditor agreed to this, they should be honouring this for you.

I hope this helps
Matthew

Former_StepChange_Matthew

Hi advisors, how do you barter with debt companys to state i am fully satisfied when only paying 80% of my debt

Hi there,

Thanks for your post and welcome to the forum.

We have a settlement service within the charity that can offer a full and final settlement with your creditors if you have a lump sum available. We can speak to your creditors and ask them if they will accept your lump sum in full and final settlement and write off the remainder. Once this is done, this will appears as partially satisfied on your credit report as you have partially settled the debt. If this is something that you would like our support with we will need to discuss this in more detail to identify the likelihood of your settlement being accepted and to explain how this process works within StepChange.

I'd recommend having a chat with our Helpline to discuss this further. You can find contact their details here.

I hope this helps
Matthew