Default after 6 years still with outstanding balance

Mrsb999

My husband currently has 2 defaults on his credit file, both with a default start date of July 2010 and both currently being paid a small monthly amount, one through apex credit management and the other Blair Oliver and Scott.

As far as I'm aware these defaults will be removed from his credit file July 2016 however there will be amounts still outstanding, what happens to this debt after the 6 years? Will my husband continue to pay the current monthly amount until the debt has completely paid off or will the actual debt as well as the default be wiped?

I have been trawling the Internet trying to fine a definitive answer to this bit can't seem to find one!

Many thanks in advance for any replies

moohound

The default drops off so it won't be visible to prospective lenders, the debt still stands. Sometimes it takes a bit longer to drop off depending on the files are updated for a particular credit reference agency.

Only if there is no payment or acknowledgement of a debt for 6 years does it become statute barred.

Mrsb999

So in this case he would continue to pay the monthly amount until the debt has settled even though the default will have dropped off?

Or will they expect him to have save up the balance and pay it off in full by July 2016?

moohound

He will keep paying until its all paid off, or if he can save up while making the payments he can offer a full and final settlement for a % of the outstanding balance, this can be done at any time, not just after 6 years.

Offers can start low at say 25%, some have had success even lower.

I have been paying mine off with full and final offers, the lowest I got was 38% just over £5000 cleared with an offer of £2000

The highest was 85% so far, but it was still a saving.

There is a template letter to go with the offer, it is carefully worded so they can't chase you for the balance or sell it on. It is thought best to get a third party to write the cheque, there are some funny laws about third party rights, and it is easier to defend if they try to sue for the balance. Letters should not be hand signed, you don't want DCAs to have copies of your signature. You should only get full and final settlement offers in writing from whoever owns the debt, not over the phone. You need to protect yourself if they try to sell the debt on. Keep all correspondance if not forever, for at least 6 years.

Credit files would be marked P for partial settlement. Future lenders will look unfavourably on partial settlements, but I don't want credit ever again, so I don't care.

The default stays on for the 6 years even if you settle in full, as it is an accurate account of what happened.

I hope this helps.

Mrsb999

Thanks again for the replies - very useful.

We are hoping to pay at least one of these debts off before the 6 years in up by offering them a reduced amount, just out of interest which letters did you use? Also how long did it take for them to accept an offer, did they decline first and you went back with another offer?

If the debts are not settled by the 6 years will they expect the full amount there and then or will they accept his current payment plan?

Sorry for all the questions!

happy_bunny_2

Have a read of this:
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

If taken out pre April 2007 worth hitting with a CCA request before entering into the offer stage. No have it then you can settle for lower, most likely.