Currently setting up Token Payments, how will this affect me

hotlymet

Hi All,

I lost my job in August which led me to default on a number of store cards and credit cards,

I have spoken with stepchange who have helped me clearly see my income/expenditure which shockingly only gave me £10 per month after all my essential bills - when I was in work!

They have suggested that i offer each of my 7 creditors a token payment of £1 per month. There are a few things that i could cut back on to increase the amount that i have after essential bills such as not buying food at work and taking in from home. This may give me ~£80 pm.

I wanted to know when will i be able to even contemplate attaining credit in the future? Will the defaults/token payment plan be taken off my credit report in 6 years? (although i'd still be paying them off)

Should i increase the token payment? I cannot see how this will benefit me as my credit will be trashed regardless?

Thanks

stator

I'm afraid your credit report will look pretty crap until the debts are repayed, people will be able to see that you are in an agree repayment plan. Once the plan is finished and the debts are gone your credit report will get better every year that goes past, but won't be clean until the 6 years after your final payment.

hotlymet

Ahhhh, I was under the impression that the token payments would not be visible on my credit file after 6 years.

I actually start a new job on Weds that will hopefully pay ~£50-£100 extra pm. If this is the case, it may be better if i increase the payments to £10 each

Helpmeoutofthismess

As ridiculous as it sounds you may as well just not pay anything for a few months, that way the companies you owe money to will default you and sell the debt to a debt collecting company. At least this way the accounts will drop off in 6 years and debt collection agencies don't tend to add on interest.

H x

stator

Helpmeoutofthismess wrote: »

As ridiculous as it sounds you may as well just not pay anything for a few months, that way the companies you owe money to will default you and sell the debt to a debt collecting company. At least this way the accounts will drop off in 6 years and debt collection agencies don't tend to add on interest.

H x

The people who buy your debt will also trash your credit file for a long time

Helpmeoutofthismess

stator wrote: »

The people who buy your debt will also trash your credit file for a long time

Yes but at least it will only be six years from the default and not six years from the final payment! The op's credit file is going to be trashed anyway from only making token payments.

H x

Thrugelmir

Helpmeoutofthismess wrote: »

Yes but at least it will only be six years from the default and not six years from the final payment! The op's credit file is going to be trashed anyway from only making token payments.

H x

There's wider issues to consider. The lenders that are defaulted on will most likely never deal with the OP ever again. That's life not 6 years.

tibawo

Thrugelmir wrote: »

There's wider issues to consider. The lenders that are defaulted on will most likely never deal with the OP ever again. That's life not 6 years.

I must be lucky then because now I've done my iva and started to build up my credit file I am with some of the companies who I owed money to. This time I can budget though.

Thrugelmir

tibawo wrote: »

I must be lucky then because now I've done my iva and started to build up my credit file I am with some of the companies who I owed money to. This time I can budget though.

Tried getting a mortgage or large loan for a purchase such as a car?

Helpmeoutofthismess

Thrugelmir wrote: »

There's wider issues to consider. The lenders that are defaulted on will most likely never deal with the OP ever again. That's life not 6 years.

It was only a suggestion so that the OP can at least expect the adverse information on his crf to drop off in 6 years. If the OP is happy for their credit rating to be trashed for another 6 years from when they finish paying that is fine.

Besides, paying £1 a month is still defaulting on your agreement so who is to say they would ever do business with the OP again anyway?

hotlymet

Hi Guys,

Apologies not had internet connectivity!
So if i wait until it is passed to the debt collectors, it'll drop off in 6 years time?

Also what are the chances of getting a mortgage in say, 10 years, if i keep my file clean and banks where lending the same as today (i know we can't say how banks are going to turn out like in such a great length of time)

My creditors are not banks, so i'm not too bothered if they don't give me credit again as it'd have to be for a ccard - which i dont want