We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Why bother paying debt??
Hatecreditors.com
Posts: 119 Forumite
Thought I’d start this thread as a slightly perplexed debt free wannabe!
I was chatting to my cousin the other day who was in a similar debt situation to me. My debt was circa £45,000 and his was over £50,000.
After mulling over the various options (Bankruptcy, IVA, saving for full and final settlements) I decided on a Debt Management Plan. I used all the money so thought it was only right to pay it all back.
Conversely, my cousin stuck his fingers up at his creditors, moved house and hasn’t paid a penny back.
I have 8 months left of my DMP with a balance of circa £8,000. Whilst I’m looking forward to my Debt Free date, I’m left baffled by my credit file. My creditors have mainly applied AP markers which will last for 6 years from my final payment. The AP markers were applied from the start of my DMP over 4 years ago, and will potentially last until 2020.
My cousin on the other hand, hasn’t heard from his creditors at his new house and has had no form of CCJ etc. He checked his credit file and all accounts were defaulted back in 2008. So not only are they statute barred, they will all drop of his file next year.
So, I paid £45,000 back and will be adversely affected until 2020.
My cousin paid £0.00 back and will be adversely affected until 2014.
Where is the justice in this and is there nothing that can be done about this ridiculous credit reporting system?
I was chatting to my cousin the other day who was in a similar debt situation to me. My debt was circa £45,000 and his was over £50,000.
After mulling over the various options (Bankruptcy, IVA, saving for full and final settlements) I decided on a Debt Management Plan. I used all the money so thought it was only right to pay it all back.
Conversely, my cousin stuck his fingers up at his creditors, moved house and hasn’t paid a penny back.
I have 8 months left of my DMP with a balance of circa £8,000. Whilst I’m looking forward to my Debt Free date, I’m left baffled by my credit file. My creditors have mainly applied AP markers which will last for 6 years from my final payment. The AP markers were applied from the start of my DMP over 4 years ago, and will potentially last until 2020.
My cousin on the other hand, hasn’t heard from his creditors at his new house and has had no form of CCJ etc. He checked his credit file and all accounts were defaulted back in 2008. So not only are they statute barred, they will all drop of his file next year.
So, I paid £45,000 back and will be adversely affected until 2020.
My cousin paid £0.00 back and will be adversely affected until 2014.
Where is the justice in this and is there nothing that can be done about this ridiculous credit reporting system?
Debt at Start of DMP in October 2009 - £45,000 :mad:
Debt in March 2014 - £0.00 :beer:
Debt in March 2014 - £0.00 :beer:
0
Comments
-
yes find out what all the accounts are and send them a change of address and £1 Payment on his behalf...0
-
Good on your cousin!!0
-
Well done to you, you did the right thing.
On the other hand, your cousin has done the wrong thing, deceiving and manipulating the system. To be honest, that kind of behaviour should have criminal consequences, IMO.0 -
Hatecreditors.com wrote: »So, I paid £45,000 back and will be adversely affected until 2020.
My cousin paid £0.00 back and will be adversely affected until 2014.
Unless his creditors decide to take out ccjs in 2014 and secure the debts against his house.yes find out what all the accounts are and send them a change of address and £1 Payment on his behalf...
Only counts as acknowledgement if done by the debtor or his agent!0 -
Well done to you, you did the right thing.
On the other hand, your cousin has done the wrong thing, deceiving and manipulating the system. To be honest, that kind of behaviour should have criminal consequences, IMO.
Or at least his credit file should be shown in a worse light than someone who has paid the debt back in full!
That's the point I'm getting at. How can someone be worse off by paying debt back than someone who hasn't paid anything at all.
All wrong!Debt at Start of DMP in October 2009 - £45,000 :mad:
Debt in March 2014 - £0.00 :beer:0 -
Totally agree with you - defaults can actually be an advantage because they ensure that the debt falls off your credit report after 6 years, paid or not.Hatecreditors.com wrote: »Or at least his credit file should be shown in a worse light than someone who has paid the debt back in full!
That's the point I'm getting at. How can someone be worse off by paying debt back than someone who hasn't paid anything at all.
All wrong!
Like you, I have paid off every penny I ever borrowed, working hard for the last 8 years to do so.
However, I don't think I could have taken the risk of the defaults being turned into CCJ, which have a lot more impact and also the thought that creditors could catch up with you at any point - I would have found that very stressful.
I suppose it depends on everyone's own attitude to risk.[STRIKE]DFW Nerd number 729[/STRIKE]Debt Free & Proud0 -
Miss_Marple wrote: »Totally agree with you - defaults can actually be an advantage
Exactly; which is madness as Defaults are supposed to be the worst case scenario. In hindsight, I wish I’d forced defaults (i.e not paid for a few months) then started my DMP.
I remember getting a notice of default from Tesco regarding my loan and was hoping that they didn’t default me. At the time, I was so thankful that they didn’t default me but have since discovered that they have applied late payment markers for 4 years. Again, this will show on the file until 2020 whereas a default would have dropped off in 2014!
The whole system needs an overhaul IMO.Debt at Start of DMP in October 2009 - £45,000 :mad:
Debt in March 2014 - £0.00 :beer:0 -
It begins to look like a reasonable way to proceed, given that you are treated worse for trying to continue paying.Hatecreditors.com wrote: »In hindsight, I wish I’d forced defaults (i.e not paid for a few months) then started my DMP.You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'0 -
It maybe doesn't seem like much consolation, but at least you did the right thing morally and that has to count for something.0
-
Only way to help this is if you were paying less than min payment by quite a bit. In which case you could complain to creditors that they should have defaulted you.
Have a read of these, including the DMP section and the bit on being no worse off than someone who made no attempt to pay.
https://forums.moneysavingexpert.com/discussion/3172602:beer:0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.5K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.5K Spending & Discounts
- 245.5K Work, Benefits & Business
- 601.4K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards