Advice on a debt settlement - 1st Credit

alext_3

Hi Guys,

Hope you are all well. I am looking for some advice on an old default if possible.

I am currently trying to straighten out my finances for good - i've never had a majorly bad rating but back in 2008 I was at University and got a Halifax credit card and student bank account.

Without going into major detail - in 2008/09 some very unfortunate personal circumstances forced me to quit University after my first year and go into full time employment to help support my mother financially with the mortgage. She had just split up with my father after 40+ years and as you can imagine it was a terrible time. My brother also had MS (he has since passed away) and took a turn for the worse with his condition around this time. I was on top of my finances and intended to go back into University after a gap year but one day received a call from Halifax demanding I paid them my "£1400 debt".

I didn't have a £1400 debt - I had an agreed overdraft, but they decided to take this off me with immediate effect and demand the money back.

As you can imagine, things spiralled and Halifax were atrocious in their dealings with me. They told me the minimum I could pay was £200+ per month which I simply couldn't afford. I ended up defaulting and due to so many things going on in my life just decided to move banks and be done with it. Not the best decision I ever made, but I felt exhausted by it and there was a lot on my plate at that time.

Here I am today - I have just finished paying off all my student loan from University which totalled about £6000-6500 originally, which is good news. I can't get accepted on many credit cards, but have one with Capital One which I got around 18 months ago and have paid every month with the specific intent of helping my credit rating - i'm not bothered about lending any money. I also have an Aqua card which i've just got to do the same thing.

I am now in a position where i've been saving some money into a Nationwide Save to Buy account and want to purchase my first house next year sometime, but obviously want to clear up my two defaults first.

I have managed to save up a small bit of cash on the side to try and part-settle the accounts and get them over and done with.

My credit card debt was roughly £750 with Lowell. They were genuinely great to deal with and I can only praise them. They listened to my personal circumstances and allowed me to settle for £175. They actually seemed like they wanted to help me and I can't fault them.

On the other hand, 1st Credit have been appalling to deal with. I have roughly £350 I can afford to settle with them over a debt which they are saying is £1400. Now - I appreciate its a big discount, but my debt with Halifax can't have been more than £900ish and is clearly pumped up with charges of all sorts.

Their advisers were blunt, rude and unhelpful. "We're not accepting that, we can only accept £550 and thats that". They aren't interested in anything at all in regards to me settling the debt. Here I am after 3-4 years ringing them up saying "i've got cash here to pay you" and they aren't interested unless I pay £550! As you can imagine, with Christmas approaching this isn't easy.

Does anyone have any advice on how to approach them? Also - do you think these debts will stop me being able to get a mortgage next year? I will have £10,000 hopefully saved up in the account by the middle of next year and may utilize the new government scheme. Btw - I can't get at this money as it is locked away in the Nationwide account. Its taken me a long time to save this up but I have remained disciplined.

Any help and advice is appreciated.

CLAPTON

money in a save to buy isn't locked up ; it's just you don't choose to access it

anyway more important what defaults etc are shown on your credit files?

Thrugelmir

alext wrote: »

Also - do you think these debts will stop me being able to get a mortgage next year?

Unfortunately yes. You've defaulted on debts then gone on negotiate partial settlements (which you don't seem particularly enamoured with). Then you wonder how these same lenders will view your application for a mortgage. Not wishing to sound harsh but lending money is a business not a charity. At the moment your recent history isn't very appealing. You've someway to go to convince a lender you've learnt your lesson.

Keep building the deposit. As the larger it is the more your chances will improve.

happy_bunny_2

Yes, default dates are important.

Leave them to sweat, they will likely take £300 or £400 at some point.

Don't ever ring them, they will lie and threaten you. In writing only.

alext_3

Thrugelmir wrote: »

Unfortunately yes. You've defaulted on debts then gone on negotiate partial settlements (which you don't seem particularly enamoured with). Then you wonder how these same lenders will view your application for a mortgage. Not wishing to sound harsh but lending money is a business not a charity. At the moment your recent history isn't very appealing. You've someway to go to convince a lender you've learnt your lesson.

Keep building the deposit. As the larger it is the more your chances will improve.

Point taken. I haven't missed a payment on any credit agreement since 2008/2009. So in terms of "recent" history I have kept myself clean.

My capital one card has been paid religiously, as have two phone / broadband contracts and a Virgin account. I'm not saying these have made me squeaky clean or "trustworthy" in the eyes of lenders, just that the defaults from those years ago are the only ones I've ever had. One of them is now settled, (even if it is partial) and the other I am working on.

My credit file shows these two defaults which one should obviously now show satisfied. My experian score is actually in the "excellent" category- not that this necessarily means anything.