Defaulting even though I am making payments??

carloshoodios

Hi all,

So a couple of years ago I decided that I would not go with the option of bankruptcy and would instead pay a nominal amount for a large loan I took out for law school. The loan repayments are supposed to be £371 a month but I couldn't afford that so I now pay £5 a month through CapQuest. I was going to up it to a higher amount (the full amount is over £35,000 so it's unrealistic that I will ever pay it off) but then I checked my credit report and it says I have still been defaulting because I am only paying £5 a month.

Is there any point in upping it if I can never pay it off??

Has anyone got any suggestions?

Tixy

That would be the correct way for it to show on your file.

The default and the whole record of the account will drop off your file 6years after the date of default (per the file).

In terms of increasing your payments, it won't make much difference to your credit file.
If the creditor decides they think you can afford more (or want to find out if you can) then they could take court action against you and obtain a CCJ and get the court to decide how much you can afford to pay back. If they ever did that then the CCJ would be on file for 6 years. Equally they may just continue to accept the £5 for years to come.

Another option might be to offer a reduced full & final settlement at some point, thats if you could raise the money to do so and there is no guarantee they'd accept one.

[Deleted User]

I think you were pretty lucky to get them to accept £5 per month on such a large debt; you can't really complain they've marked a default on your file when you're paying such a low token amount! Personally I wouldn't increase the amount if it is still unrealistic that you can pay it off any time soon.