Credit rating after SC?

meredith132

I am on the brink of sorting this mess out thanks to SC. I am sure this has probably already been answered on here but I can't find an answer. What happens with your credit rating once it all starts processing? I have been advised to pay a token payment for one year to give time to get on my feet. I expect credit rating is totally screwed immediately !!! I wondered if so how soon into repayment plan it picks up again. My mess is due to partner leaving and the frustrating thing is I have so much equity in home yet can't remortgage as I don't yet earn enough. This is all being addressed but its very maddening:mad:

dancingfairy

Defaults stay on your file for 6 years. I'm not sure how payment plans/token payments are marked on your file or how much they affect it.
If this is the right option for you you shouldn't let damage to your credit file put you off. In most cases credit files heal over time and can be repaired (obviously if you get a ccj that's a bit different).
df

meredith132

As of yet I have not defaulted on any payments but realistically in the next couple of months it is likely if I do not address the situation now.

Gorchard_2

Couldnt just read-n-run.

Best advice I can give is to call nationaldebt helpline.
They are FABULOUSLY helpful and knowledgeable.

They can help advice how to put together a budget, they way to proceed, and the effect token payments will have.

Depending how serious the problem is, they can put you in contact with the right people to help.

If you want help here, then feel free to post specific details of what you owe, what you earn etc, and the friendly geniuses that read this forum will happily give support and advice.

- welcome. :-)

meredith132

I've been in touch with step change, but I find myself holding back trying to think of different things I could do. I guess I am cheesed off at losing my credit rating when I have not defaulted yet. But I know I could easily default in next few months. Is it normal to feel like this? I don't know whether to risk juggling for a couple of months because either way my rating will get shot down !!! i have done the moving around cards and the consolidation route and now I'm thinking kick butt and sell stuff, do whatever but don't go down the DMA route. 2 hours ago DMA seemed perfect:eek:

Learning2Budget

As soon as my plan was in place most of my creditors defaulted me. This wasn't an issue for me as my plan is longer than 6 years. So my defaults drop off this year and we still have 4 years on our plan.

meredith132

Thanks , thats good to know. I will definately be in for the long haul for paying back. I think I will call my bank today , First Direct, and just see if there is anything they can help with if not I think I will have to go DMP! I was trying to talk myself out of it last night but actually reading others posts this is a mess I have been in for years and trying to solve it on my own has got me in deeper , coming on here shows me I am not alone :eek:

Tixy

Hi meredith

I think its really common to feel as you do and that that leap in to any debt solution. Equally many people on here post about the feeling of relief once they have done so and are not worrying and juggling money so much that it takes over their lives.
But if you have been advised to make just token payments rather than even reduced/pro rata payments then it does sound like you probably have no chance of saving your credit rating.

When making reduced payments usually the sooner your creditors issue defaults the better, as that then begins the 6year period until the defaults drop off your file.
If you do default on your debts though then your chance of being able to remortgage in the next few years (even if you do start to earn more) will be massively reduced.

In terms of the equity in the property, have you considered selling and moving to a cheaper property to release the equity? or is that something you have already discounted?

DS4215

Creditors should mark a default on your file that drops off after 6 years. Some, very sneakily, mark the account as arrangement to pay - which then drops off 6 years after you pay off the debt.

On_my_way

meredith132 wrote: »

I've been in touch with step change, but I find myself holding back trying to think of different things I could do. I guess I am cheesed off at losing my credit rating when I have not defaulted yet. But I know I could easily default in next few months. Is it normal to feel like this? I don't know whether to risk juggling for a couple of months because either way my rating will get shot down !!! i have done the moving around cards and the consolidation route and now I'm thinking kick butt and sell stuff, do whatever but don't go down the DMA route. 2 hours ago DMA seemed perfect:eek:

You are definitely not alone. Creditors will mark your rating with defaults which will definitely affect you but it's better than ending up bankrupt! Don't forget to keep budgeting and try very hard to put by an emergency fund. Also, if you are having trouble with your DMP call them - don't let it get out of hand as well!

Well done!

On_my_way

Tixy wrote: »

Hi meredith

I think its really common to feel as you do and that that leap in to any debt solution. Equally many people on here post about the feeling of relief once they have done so and are not worrying and juggling money so much that it takes over their lives.
But if you have been advised to make just token payments rather than even reduced/pro rata payments then it does sound like you probably have no chance of saving your credit rating.

When making reduced payments usually the sooner your creditors issue defaults the better, as that then begins the 6year period until the defaults drop off your file.
If you do default on your debts though then your chance of being able to remortgage in the next few years (even if you do start to earn more) will be massively reduced.

In terms of the equity in the property, have you considered selling and moving to a cheaper property to release the equity? or is that something you have already discounted?

Credit rating is only an issue if you want to borrow money or get a new mortgage etc. It isn't forever and hopefully you will be able to settle your DMP very early anyway as you should be able to budget and get savings put aside.

Good luck!