Debt on credit file - what happens after 6 years?

leeanne1604

Hi, apologies if I have posted this in the wrong area but I'm new to all this. Here goes ...

I have quite a large debt which was a bank credit card which was £9,000 before it was sold to Iqor. Anyway it went to default and that's when it got sold to Iqor. The date of default was September 2007.

I have been making payments of £60 per month to them - couldn't pay anymore due to living costs and all that but I know that amount isn't even scratching the surface. I'm now able to pay them a little more so will do that tomorrow.

What I am wanting to know is what happens when the 6 years comes along? Will the default drop off and how will it sit since I am still paying the debt off?

Iqor had offered me a 25% discount if I was to settle the debt and I think this would cost about £4300. I had though about pooling my 2 credit cards to pay it off and clear it off my credit file but there is problems with that as I'd be paying more fir the debt in the long run.

It's the only bad thing on my Credit file so would like to improve it as we will probably be looking for a new house in a couple of years and would like a better mortgage deal than what we are currently on.

Any advice greatly appreciated.

matttye

Default will drop off September 2013. You'll continue to pay the debt but it won't show up on your credit file.

leeanne1604

Thanks for the reply.

So it won't show up on my credit file at all even though it is still something I am paying?

If that's right then in theory my credit file would look pretty healthy??

Buzby

That's about it - the time bar takes care of it.

Even if you stopped paying - and were not clearing off the balance, this would disappear too.

leeanne1604

So a bit of a stupid question but is there any point for still to pay it?

I'm all for paying off my debts and I've work really hard over the last few years clearing my outgoings up but if its going to disappear then just wondered if there is any point?

matttye

leeanne1604 wrote: »

So a bit of a stupid question but is there any point for still to pay it?

I'm all for paying off my debts and I've work really hard over the last few years clearing my outgoings up but if its going to disappear then just wondered if there is any point?

If you don't pay off the debt, the company could take you to court and obtain a CCJ against you, which will stay on your credit files for a further 6 years and is worse than a default. If the company thinks you can't afford to pay and you owe them more than £750 they could even petition for your bankruptcy, but this would only work if you really cannot pay. If you can pay, then as I said before you'd more than likely get a CCJ.

There's also a moral obligation to pay off debts but not everyone cares about that.

So "is it worth it?" is really a question of risk. If you're willing to gamble that you won't get a CCJ then you might decide it's not worth paying.

leeanne1604

Thank you for the advice. I am keen to pay it off and my plan is to keep paying the £60 per month but try to get the money together sometime for the 25% settlement discount.

At least I can have some breathing space to work on paying it off without it affecting my credit score.

oknow100

Hello,

Well, if you had not paid anything since the default, the debt would vanish in September, but as you have been paying they could still take action if you stopped paying. You may be able to make a lump sum offer of around 50% of the debt, depending on the company, a lump sum offer would be very welcome.

Good Luck.

leeanne1604

So are you saying that the debt won't go off my credit file after 6 years as I have still been making payments to it?

fermi

It will be removed from your credit report 6 years after the default was first put on.

oknow100

Hello,

Yes the default will go after the six years, what I meant was the debt would would remain, as you had been paying it. (For example, if you had not paid anything in the last 6 years, the debt would become statue barred along with the default being removed). However, they probably would of taken you to court in that time.

Thanks