Confused and frustrated

johnny80

Hi, sorry in advance if this is in the wrong board...

I'm just hoping for answers to a couple of questions or even any useful advice from anyone who may be in, or has been in a similar situation to myself.

Basically around 4-5 years back I split with my long term partner and was left saddled with the majority of the debt run up together. As it was primarily in my name my ex was allowed to walk away from it all and hasn't looked back since.

The joint account was closed and I was given some kind of child's bank account that prevents me running any kind of credit up. Fair enough, debts and credit are something I've had my fill of for this lifetime!

From there I was left paying 4 debts for a credit card, a store card, a loan and a joint overdraft (how does that work Yorkshire Bank!?!?!). Shortly after the split, the jointly owned house was sold with no profit (just covered what was left owing on the mortgage) - bought in the boom, sold in the rescission - and I was forced into rented accommodation, renting through a member of family.

I was unable to pay all my bills so spoke to the Citizens Advice Bureau who advised bankruptcy, which thankfully I didn't do. What instead happened was they contact each of the creditors and notified them of my situation and agreed to freezing the interest and a minimum re-payment plan, which was ridiculously low but really helped me out of an impossible situation.

I'm not even sure what this was called though, no court action was necessary and I havent had much dealings with the companies since (apart from NRAM selling their loan debt to Marlin and the occasinal call to check my circumstances).

Now several years down the line, the original creditors have all sold the debts on to debt recovery agents who are still working to reduced repayment plans, however I'm not sure what this is classed as, what kind of debt management this is and more importantly as there's no fixed term of repayment, where it's all going!

Naturally I don't want to be forever paying off debts and I'm getting scared at just exactly where it's all going, especially as I'm trying to move on with my life and have met someone new.

I've very recently had a small promotion at work and having a partner has really helped out with some of the small day-to-day living costs, so I've been paying additional payments to my outstanding debts as and where I can.

However I don't want to rely on or have my debts carried over to my new partner. She's very understanding but it's not her responsibility and I feel terrible for holding us back with my crippling past.

I'm getting quite worried now as it's getting to the stage where I will need to move soon due to circumstances out of my control but I have found I have been left almost crippled with a poor credit history now, so basic things such as applying to rent a new property seems to be almost impossible as well as quite humiliating for me. Having strangers pour over your credit history and having to explain you're in debt management to friends or family who are asked to be used as validators for rental agreements is very embarrassing. It all seems a little unnecessary too as the money i repay is all outside of my "essential" living costs anyway, so bills such as rent are considered as living costs and priority.

I am employed full-time and have always worked in a reasonably stable (if not outstandingly paid) job and I'm prepared to pay the debts owed despite feeling bitter about it, but feel it's unfair for it to dominate my life in the way it does, especially when i am forced to explain it to others.

I've already had to forfeit my successful application to in the police force on this (I appreciate its my own fault!) and even had some other jobs prospects jeopardised by it - both of which ironically would have helped clear these debts quicker.

Now I'm worried how long this cloud will be over my head and how it will affect me and my new partner.

I owe somewhere in the region of £12k and even if the repayments were restored to the original rates, I would still be left with years worth of heavy debt, that until paid would basically holding me back and keeping me in slum accommodation with no chance of a future.

I'm at a bit of a loss what to do to try and tackle these debts or where to turn next.

In my mind I feel I could probably clear at least 1 or 2 of the outstanding debts relatively quickly (the two smallest ones for the over draft and store card) but the loan and credit card are thousands of pounds worth and im worried the debt agency will start to get heavy soon. Is it advisable to reduce a couple of the debts? The CAB initially warned me against this, saying it was only fair to pay back each in equal amounts and it was all they would accept as part of the repayments plan. Is this correct?

Also if by some miracle I did manage to pay these debts off in the short term, how long do the "hangover" affects last? For instance in the future if I want to get a mortgage, would this be viable? Or will I be forever deemed a bad debtor (despite having previously had a mortgage and paid it off) and never to be given the chance of a mortgage again?

How will my debts affect my new partner if and when we move in together? What about if we plan to marry or have children?

Thanks in advance.

Foxy-Stoat_3

johnny80 wrote: »

I owe somewhere in the region of £12k.

Is it advisable to reduce a couple of the debts? As all the debts have been sold to debt recovery firm you will need to get balances and if any interest is being charged.

The CAB initially warned me against this, saying it was only fair to pay back each in equal amounts and it was all they would accept as part of the repayments plan. Is this correct? If would of been if all the debts are with the original lender AND you decided to go down the IVA route.

For instance in the future if I want to get a mortgage, would this be viable? Or will I be forever deemed a bad debtor? Defaults will fall off your credit file after 6 years. If you do decide to go down the IVA/BR route then you will need a good deposit for a mortgage, in reality you won't be taking out another mortgage again for around 8-10 years.

How will my debts affect my new partner if and when we move in together? If you create an association then these may effect your partners acceptance for credit.

What about if we plan to marry or have children? As above

Thanks in advance.

Shortened your post for you as too much information.

How much disposable income are you left with now, and what lifestyle changes could you make to increase this figure?

Whats your salary?

Tixy

Sounds like a low repayment debt management plan. This is an informal agreement with your creditors rather than a form of insolvency.

I would think it is definitely worth talking to one of the debt advice charities again (national debtline or stepchange should be quicker and easier to get through to rather than a money advice specialist at CAB).

The CAB initially warned me against this, saying it was only fair to pay back each in equal amounts and it was all they would accept as part of the repayments plan. Is this correct?

On a DMP is it generally advised to treat all creditors equally as that gives the best chance of them agreeing to freeze interest and charges and accepting the DMP rather than taking court action. That said once debts are passed to debt collectors some people do focus on one debt above another.

Also if by some miracle I did manage to pay these debts off in the short term, how long do the "hangover" affects last? For instance in the future if I want to get a mortgage, would this be viable? Or will I be forever deemed a bad debtor (despite having previously had a mortgage and paid it off) and never to be given the chance of a mortgage again?

It depends on how your creditors have marked this on your credit file, when and if they entered a default etc.
Typically in a DMP a creditor will enter a default notice in the first few months and then 6years after that the default and the whole record of the account/debt drop off your credit history. That said some creditors unfairly/incorrectly delay entering a default notice for sometimes a few years, which then means it is longer until the 6year timespan where it drops off (if they do this it can sometimes be challenged).
If a creditor/debt collector took court action against you sometime during your DMP then as you wouldn't be able to pay the CCJ in full within a month it would appear on your credit file for 6years from the judgement date.

Best option is to get copies of your credit files to see what they show currently and therefore how soon your credit history could be clear of these debts.

How will my debts affect my new partner if and when we move in together? What about if we plan to marry or have children?

She will never become legally responsible for your debts. They are yours.
However on a practical side they may well affect her financial situation if you live together as you will be repaying them and therefore have less to conribute to the household.
If you have any joint finances (mortgage/joint bank / joint loan then she become a financial associate and could affect her ability to get credit - as a potential lender would see your credit file as well as hers).

johnny80

Sorry for the initial long post, I think it was partly for my own benefit in getting my head around things. Thank you so much for the advise too. I will be contacting Stepchange for advice.

johnny80

Just a quick question;

Defaults will fall off your credit file after 6 years. If you do decide to go down the IVA/BR route then you will need a good deposit for a mortgage, in reality you won't be taking out another mortgage again for around 8-10 years.

What about if I don't go IVA/BR? What options are there? Will this increase my mortgage chances in the future?

longtermplanner

If you don't go IVA/BR then you have two options:

1) Stop making any payments to the debts In this case defaults may fall off your credit file, but that doesn't mean that you don't still owe the money. As you have been making payments, they won't become statute barred for 6 years after you stop making any payments

2) pay them off asap. If your partner could help out, you may be able to get full & final settlement s for a fiarly low amount as these have been hanging around for a long time

3) go for a low debt repayment plan. This sounds as though it could drag on for years and isn't a good idea.

Foxy-Stoat_3

johnny80 wrote: »

Just a quick question;

What about if I don't go IVA/BR? What options are there? Will this increase my mortgage chances in the future?

To be honest, IVA,DMP/DRO are all the same in the eyes of the lender, BR is probably more serious but no really knows for sure.

If the question on the mortgage application is "have you ever entered into an arrangement with creditors" then you will have to answer yes so whether your go IVA now (5 years to finish) or DMP (5-12 years to finish) then the possibility of a mortgage will still be the same and the need for a big deposit.

How much disposable income do you have and what lifestyle changes can you make now to increase that figure?

UpToMyNeckInIt

...With being on a DMP (which it sounds like you are at the moment), your credit rating is wrecked for the duration of the plan, and 6 years after your final payment. (How long will that take?).

Going insolvent (BR, DRO or IVA), your credit rating is only wrecked for 6-Years from the START of the process.

Regardless of whether you are on a DMP or go insolvent, you will be treated like a financial leper until your credit file recovers.

If you want to join the Police, I believe that going BR may be an issue, but otherwise I am struggling to understand why you did not take CAB's advice to go BR in the first place (ie: 5 Years ago)? Had you done so, you would no longer be insolvent, and your credit rating would recover in 1-Year's time.

Hindsight is great of course, but if you have now chosen a different career path, going BR, (or even a DRO if you have a disposable income of less than £50pcm after living expenses) sound like your best options on the face of it.

An IVA for a £12K debt is not wise in your situation (ie: assuming you have no assets to protect), unless going BR would affect your employment.

Your ex. will find that they will not be able to 'walk away' from your joint debts if you go insolvent: The creditor's will pursue them for the full debt's that were in joint names.

Speak to CAB & Stepchange and review your options.

best of luck.

johnny80

Again thank you all for your assistance.

Hindsight is indeed a wonderful thing, BR wasn't an option for me back when i split as I was in the final stages of joining the Police and this would have been an instant dismissal, also it would have had implications on the job I was doing (and ended up having to fall back on and am still doing).

What I should have done is went for an IVA or DRO at the time and I'd have been almost done now! I do feel this could have been made cleared at the time but I'm entirely to blame for being too willing to go along with the casual DMP i've been following which has ultimately drawn out the process and made things worse!

I think I still qualify for DRO so I will look towards that and black cloud over me for 6 years!

Thank you again for all your help.

Tixy

UpToMyNeckInIt wrote: »

...With being on a DMP (which it sounds like you are at the moment), your credit rating is wrecked for the duration of the plan, and 6 years after your final payment. (How long will that take?).

That isn't correct. On a DMP of over 6years it is quite common for the debtor's credit file is completely clean of any evidence of the debts or having got behind with any repayments well before the DMP has even finished.

If creditors enter defaults in the first few months (and it is worth pushing them to) then these will all drop off the file 6years after that date, not 6years after the end of a DMP.

johnny80

Tixy wrote: »

That isn't correct. On a DMP of over 6years it is quite common for the debtor's credit file is completely clean of any evidence of the debts or having got behind with any repayments well before the DMP has even finished.

If creditors enter defaults in the first few months (and it is worth pushing them to) then these will all drop off the file 6years after that date, not 6years after the end of a DMP.

So on my credit history only my initial defaults that were recorded during the whole process starting back in 2009 will show anyway?

Would this still be the case if I was to successfully change my current DMP to a DRO/IVA now based on the remaining debts?