When to pay back debts? And settlements and default removals advice

North37

Does anybody know if you pay your debts off and have lets say 2 years remaining on the default whether the creditor will take off the default as goodwill. Lets say you pay back in full. Has anyone done it?

jonnym8083

I have same question

fatbelly

The answer is that they shouldn't remove the default from your file as it is supposed to be an accurate record.

However, there are stories of lenders who will do that, particularly if you are making that a condition of full payment.

So you can try...

fermi

fatbelly wrote: »

The answer is that they shouldn't remove the default from your file as it is supposed to be an accurate record.

However, there are stories of lenders who will do that, particularly if you are making that a condition of full payment.

So you can try...

Actually, queried that several times with the ICO and this was their stance once referred to their 'legal' people.

**th **** 20**

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.

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 affect 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

matttye

Cloudy456 wrote: »

Not being funny, but if you've come into money why are you not just paying what you owe. Presumably you spent the money to build up the debts, yet you're trying to get away with paying less. As I understood it, offering a full and final settlement would be something for situations where people cannot, and have no realistic hope, of paying back what they borrowed. You're not in that situation and quite aside from the moral aspect of it, why end up with another black mark on your credit file? Just my thoughts anyway, I know many will disagree and say pay the minimum you can get away with.

When a lot of the debt is interest (a heck of a lot more interest than we get keeping money in bank accounts I might add), I don't see why full and finals are a bad thing. So long as the lender gets what they actually leant back plus a fair amount of interest of top, that fulfils any moral obligation to repay IMO.

Cloudy456

I get what you're saying Mattye and everyone's entitled to their opinions. But I think it comes down to taking responsibility for the agreements we enter into. OK banks are paying less interest than they are charging but no one goes into a credit agreement not knowing what the interest rate is, it's always made clear. It's up to people if they choose to take that loan and in my opinion there is then no excuse for paying it back in full in line with that contract when the money is available. I am not saying this as a smug person with savings, by the way - I am also busy clearing debts but I'm trying to do it by taking responsibility and not blaming other people or 'the system'.

Also, a lot of full and finals seem to be for a relatively small percentage of the balance which I can't believe does in fact cover the full balance plus interest, especially taking into account costs incurred chasing non-payment over the years.

Stewart_78

If you have the 5k I would go for full payment on condition the defaults are removed and get it in writing. Also, say it's from a relative and is conditional. They won't give you the money unless the defaults are gone. I suspect you might be lucky if you are offering immediate and full settlement.

sourcrates

Cloudy456 wrote: »

Not being funny, but if you've come into money why are you not just paying what you owe. Presumably you spent the money to build up the debts, yet you're trying to get away with paying less. As I understood it, offering a full and final settlement would be something for situations where people cannot, and have no realistic hope, of paying back what they borrowed. You're not in that situation and quite aside from the moral aspect of it, why end up with another black mark on your credit file? Just my thoughts anyway, I know many will disagree and say pay the minimum you can get away with.

I see it like this, if buying a car, you never pay the screen price do you, so repaying defaulted debt, you never pay the whole amount, if you can help it, its all about negotiation, these DCA`s buy the debts at discounted prices, so why should the consumer be the only one who pays full whack ?

Cloudy456

For me it's just a moral thing - if I spend money, I pay it back. Otherwise it's taking what isn't mine which I don't do in other areas of life. And if the DCA may have bought the debt cheaply, that means that the original lender has already paid for some of your spending. I'm sorry, I just cannot reconcile trying to get stuff for free (i.e. all the things someone bought on credit and not paying it all back) as OK.