Making a full and final settlement ?

BreakfastTea18

Hi there

I am hoping to make a full on final settlement on some old credit card debts I defaulted on whilst going through a bad period with divorce, legal bills etc.

I would like to move house and take out a mortgage much smaller than the one I have now and also pay my ex husband his charge on the property which thankfully is small compared to the equity.

I have 3 outstanding debts, Mint card, defaulted in 2010 amount owing £540, have been paying £1 per month token payment.

MBNA £1055 defaulted the same time but has passed to different DCA's , last one was Arrow Global but I continued paying MBNA as they never informed me they were selling on the debt and they weren't passing on the token payments to Arrow Global either. Arrow have also sold on the debt but again I just got a letter out of the blue a few months ago offering me some sort of payment plan to pay off the outstanding balance. I chucked it in the bin but probably shouldn't have. Will have to find out who DCA is but amount owing is about right.

Santander, £470 current account overdraft debt, joint debt with Ex Husband although he has paid his half of the debt when it stood at £1000. Seeing as he r it up he should be paying all of it as far as i'm concerned but he won't so I will take this on. no interest being added, again making token payments. Defaulted in 2010.

If I make a full and final settlement on each, how long before my credit record is clear in order for me to apply for a mortgage as this is my primary driver for settling these now.

Also, should I do this in writing or by telephone ? Really not sure on best way forward.

Thank you in advance

double_mummy

2016 until they come off but if you want to try for a mortgage before then you may want to consider paying the balances in full as it will then show as satisfied not partially satisfied
or as part of your negotiations you could offer a price but say this is dependent on them showing a 0 balance and as satisfied on credit file although not many are willing to do this now

BreakfastTea18

Ok thank you, that's helpful...so basically for credit reference purposes, it has to show 0 balance and satisfid, or if I can't get that to happen, there really is little mileage in paying them in full...I may as well wait till they drop off. I appreciate I do owe the money, I don't dispute that, but most of the balances are interest anyway. Is it best to do this in writing or by phone ?

BreakfastTea18

Well I've just phoned Mint and they don't want to know. its full balance or nothing.. I pointed out I am only payig £1 a month so surely in their interests to accept an offer as it will drop off my credit record in a couple of years and I doubt that my £1 per month will add up to what I was prepared to settle at. Might just cancel that payment as well and see if they come back to me.

sourcrates

Kimlisa1 wrote: »

Well I've just phoned Mint and they don't want to know. its full balance or nothing.. I pointed out I am only payig £1 a month so surely in their interests to accept an offer as it will drop off my credit record in a couple of years and I doubt that my £1 per month will add up to what I was prepared to settle at. Might just cancel that payment as well and see if they come back to me.

Usually a creditor wont accept anything but full payment, you may fair better if the account was passed to a DCA as they are more inclined to accept lower offers.

longtermplanner

You are not talking about large sums of money. If you have a reasonable hope of saving up for a deposit, then i suggest you should just clear the debts in full and move on.

If you don't have much chance of saving up for a deposit, then settle the debts for as low a figure as you can manage!

happy_bunny_2

Best post on the mortgage board. They can advise on chances of a mortgage. Probably a broker job.

[Deleted User]

Kimlisa1 wrote: »

Might just cancel that payment as well and see if they come back to me.

Stopping paying, may cause them to take you to court, leading to a CCJ (which will stay on your Credit File for 6 years), and result in a charge on the property.

BTW. How do you plan to pay a mortgage, if you can only afford £3pm toward your debts :huh:

BreakfastTea18

Bedsit_Bob wrote: »

Stopping paying, may cause them to take you to court, leading to a CCJ (which will stay on your Credit File for 6 years), and result in a charge on the property.

BTW. How do you plan to pay a mortgage, if you can only afford £3pm toward your debts :huh:

I already have a mortgage for your information, but due to a change in financial and other circumstances that has been forced upon me and one that I can do little to change, I am looking to downsize my property.

I will however need a small mortgage of around 20k or less to add to my existing equity, which I then hope to pay off when I am awarded compensation for a road accident I was involved in a few years ago. At the current time I do not have the funds to pay off the card and overdraft debts, but I will be able to do so if I can sell my house and buy a smaller one that is suitable for my needs, to do that, I need to take a small mortgage that I cannot get due to the defaults on my credit report.

It's a bit chicken and egg at the moment, one effects the other. I have offered a reasonable solution to the card company but they have refused, so they will carry on getting a quid until such time they relent or the debt drops off my credit report, whichever is the sooner.