Continue or Increase Defaulted Repayments?

goose32

I currently pay a small amount per month to a debt collection company, in respect of a defaulted student overdraft account, which would take another 36 months to completely clear.

Since setting the agreement up my income has improved and I can afford to pay more. Should I:

1. Contact them and increase the amount to pay back per month.

2. Continue at the lower amount, save up the outstanding balance over the next 9 months and look for a full and final settlement figure from them?

If 2 is the best option for me (financially), could there be any further negative impacts - i'm guessing the bank wouldn't look to do any business when I finally get to a position where I'm in the market for a mortgage.

rizla_king

2 is tempting but leaves you more open to action against you. 1 is safest although may cost you more.

happy_bunny_2

How old is the default, for how much?

Fully settled default will look better than a partially settled one for a mortgage, I would think.

Defaults fall off your report after 6 years, fully paid or not, as long as they don't get a CCJ.

goose32

happy_bunny wrote: »

How old is the default, for how much?

Fully settled default will look better than a partially settled one for a mortgage, I would think.

Defaults fall off your report after 6 years, fully paid or not, as long as they don't get a CCJ.

Default was mid 2010 for £1,950. Mortgage is min 4-5 years away in all honesty.

As I see it as long as i'm meeting the agreed amount then 2 would be the best financial option - especially as the default falls off my credit file before i'm in the mortgage market.

happy_bunny_2

goose32 wrote: »

Default was mid 2010 for £1,950. Mortgage is min 4-5 years away in all honesty.

As I see it as long as i'm meeting the agreed amount then 2 would be the best financial option - especially as the default falls off my credit file before i'm in the mortgage market.

Yep, I would go for 2 also