Old Debt - Requesting Removal

flanker

Hi there,

Apologies if this has been answered elsewhere, I had a search but didn't find an answer.

After a debt filled university career my credit was shot. I made a full and final with one bank and due to lack of funds, totally ignored another.

It has now been almost 5 years since I've spoken to them but all of a sudden they've started contacting me through a separate agency whom they sold my debt onto. I don't think they're going to take action but I'm really keen to clear up my file so I can get credit again.

Rather than waiting just under 2 years for it to be statute barred, is there any way I can negotiate with the agency that if I make a full and final settlement, they'll erase the entire listing from my credit reports? Have other people done this successfully in the past?

I'd rather get the debt settled if I'll finally be free of this debt, if not I'll just wait out the next 2 years.

Thanks

fermi

flanker wrote: »

Rather than waiting just under 2 years for it to be statute barred, is there any way I can negotiate with the agency that if I make a full and final settlement, they'll erase the entire listing from my credit reports? Have other people done this successfully in the past?

Occasionally a debt collector is willing to do a deal like that.

It is quite rare though, and I haven't heard of anyone managing it recently, so I would be expect to get knocked back.

CKhalvashi

After 5 years, you'll be lucky to get this agreement.

If they've taken no action, you may be best to wait it out and not to alert them you have spare cash, so to speak.

CK

fermi

flanker wrote: »

I'd rather get the debt settled if I'll finally be free of this debt, if not I'll just wait out the next 2 years.

Given the limited chance of success, it may be better to just wait.

However, below is the ICO's position on deals like that.

**th ****** 2010

Case Reference Number ENQ*******

Dear Mr ******

Thank you for your enquiry regarding the manner on which defaults information is recorded on credit files. Please accept my apologies for the delay in responding to you; this is due to the large caseload we are currently experiencing. Unfortunately, this has meant that we have been unable to deal with incoming correspondence as promptly as we would like.

You have asked in your inquiry whether, once a default has been recorded with the credit reference agencies, it is possible for a lender to come to an agreement with the debtor to remove the default record as part of a negotiated settlement.

I can confirm that removal of the default record under these circumstances would be at the discretion of the lender. Removal of the record would not contravene any part of the Data Protection Act 1988, or the data protection principles embodied in that act.

You have further asked whether the assignment of the debt and the transfer of the default record to another company, a debt collector in your example, would effect this position.

I can confirm that any subsequent maintainer of the default record due to a sale or 'assignment' of the debt would hold the same power of discretion previously mentioned.

I hope that this information has been helpful. If we can be of any further assistance please contact our Helpline on 08456 306060, or 01625 545745 if you would prefer to call a national rate number, quoting your case reference number.

Yours sincerely

**** ***** Case Officer

Information Commissioner's Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF
T. 01625 545745 F. 01625 524510 www.ico.gov.uk

Please consider the environment before printing this email

flanker

Thanks for all your advice.

That's a real shame, you'd think the longer that went by the more willing they would be to do anything to secure some of the cash. Changing a credit file isn't too much hassle considering the fact that they may never see a penny from the debt they bought.

I may not bother in that case, gutting because I want to do the right thing but can't afford to have it on my file for another 6 years.

fermi

If there is a default registered on your file, then settling the debt would NOT mean another 6 years of it on your report.

Defaulted accounts are removed completely from your credit reports 6 years from the default date, no matter what. Even if you have settled them only recently.

On the other hand, because of that these accounts will be off your report in a year or 2 no matter what you do, so factor that in as well.

flanker

fermi wrote: »

If there is a default registered on your file, then settling the debt would NOT mean another 6 years of it on your report.

Defaulted accounts are removed completely from your credit reports 6 years from the default date, no matter what. Even if you have settled them only recently.

On the other hand, because of that these accounts will be off your report in a year or 2 no matter what you do, so factor that in as well.

Thanks for your advice.

Does settling the debt have a significant effect on the credit rating? Just trying to figure out if it's worth it.

Buzby

No. A credit rating is a figment of a CRA's marketing department. I've certainly negotiated a F&F settlement conditional on all adverse data being removed, but this was a good few years ago before they got delusions of bring the repository of some public status 'record'.

A default remains whether paid off or not - and if sold off to an unconnected third party, my view is that if the original outfit don't want your money, then your moral responsibility to pay expires. Some may disagree, but that's their problem!