What happens if you simply stop paying your credit cards?

hp48910

It was the CAB they went to and the guy worked there. They are following his instructions and have his details incase there are any issues with the companies.

He claimed to have written letters and phonecalls where people had not been able to sort the F&FS. He said the only time he couldn't was when a lady said she had no ability to pay but had purchased a £1000 multigym the previous day. In that instance he said the lady had not helped herself but had otherwise never had a problem getting companies of peoples' backs.

I'll try to remember what my friend said his background was.

StressedSteph

I find it hard to believe it was a CAB employee.
Sounds more like a private company making false promises, but the person with the debt would have to pay to sign up to their company for them to sort all this out for them.

Sounds like a scam.

Tixy

I would be very cautious about this advice - in fact I would suggest to them that they get advice from at least one other source (other debt charity etc).

At the extreme but technically possible end, anyone they owe more than £750 to could petition to make them bankrupt. Thats unlikely, but what is more likely is that some of the creditors will obtain CCJs. And some credit card providers are significantly increasing the use of charging orders. I have seen reports where MBNA have pushed for a charging order for a debt of around £2k.

If any go to court for CCJs/charging orders and the judge sees there has been no effort to repay this is far more likely to result in a forthwith judgement than someone who has been paying token payments and paying what they can afford.

hp48910

Thanks Tixy, that makes complete sense to me. Stressedsteph, it was definitely through the CAB. I remember them saying that he had said he shouldn't really be telling them how to do it but nonetheless, he did!

I think they are purely just looking at getting rid of the debt but when you think about it, six years is quite a lengthy time to have a poor credit score hanging over your head.

sistafromanothermista

I would be very cautious too.
Is the loan unsecured?

Mrs.Downie

I'd tread cautiously, very cautiously, sounds like a way to get yourself into a bigger mess.

Power to your friends though if they can withstand the harassment and letters and calls from creditors. The guilt would tear me apart.

hp48910

sistafromnothermista, I am assuming the loan is unsecured.

Lucy1010

Hi OP

I have a charging order on my property for a credit card debt of £2,500 from over 15 years ago.

The debt was sold by RBS to a debt collection agency and after years and years they tracked me down in 2007 and placed a charging order on my house. I sought my solicitors help but there is nothing I can do bar pay the debt. I cannot sell my house until they have been paid, it's scary as this is a public record on my property!

I would not be envious of your friends

hp48910

Thanks for the reply...This is scary stuff. The problem is they are now in their second month of this!


:eek:

onamissionEU

Hi OP,

I can only tell you of my personal situation which is similar to that suggested by the CAB man. I had 3 debts totalling 12k and a Mortgage to boot. Having struggled to service this debt for years I made the decision to default my 3 credit cards in the hope of getting them passed on to DCA's. Once an unsecured debt is with a DCA (who purchase debt for pence in the pound) it is usually possible to get a reduced settlement. I paid 40% to settle.

This is NOT an easy road and will involve the following:

* A default on your credit file for each creditor. Lasts 6 years and will effictivly stop you from getting any credit inc mortgage.

* Phone calls, threats, letters, stress and more. Not going to kill you but scary if you are not prepared for it. Creditors will also request SOA's before considering !!!!!!. You can lie and usually get away with it but, again, this is risky.

*This is not a quick process. The original creditor will take around 3-6 months to default you (if you make no payments), longer if you make partial payments. A lot of banks have "in house DCA's" and your debt may be passed around between several DCA's (taking several months) before being sold on to a DCA receptive of a !!!!!! offer.
depanding on the amount of creditors you have you could easily be looking at 1-2 years from start to finish.

* Bailiff. Not had the experience myself as I emigrated before defaulting (making the whole process for me a lot easier). Never open the door to one and NEVER EVER let one in or sign anything. They may "ask to use the toilet" to gain entry - REFUSE. Once you let a bailiff in to your home FOR ANY REASON you are screwed.

ALWAYS refuse phone calls and ask that ALL comms are done per post. There is a possibility that creditors will try to get a CCJ against you or push to make you bankrupt but this is very unlikely for credit card or unsecured loan debt. NEVER mess around with council tax or HMRC debt - pay it or you will end up in court.

Once a debt has been defaulted you have nothing much more to lose as your credit file is shot for 6 years. If any creditor serves court papers you have lost the battle and just pay the debt.

Personally I was never asked about my mortgage (perhaps as I made clear I am not longer a UK resident) despite having a lot of equity in my property - can not offer advice on this part. For me a shot credit rating is no issue as I have no plans to return the the UK.