Pay in full or settle a £2500 debt that's about to expire

CaptainH

Hi guys, I've got some inheritance money now and I have a CC and bank account that defaulted about five years ago. The CC is paid off in full but the bank account is paid off to about £2500. I've been told that they completely disappear in six years, so I was wondering if I should save money by settling this debt instead of paying it off in full. I've already told them that we're selling the house so I expect they've noted that down and will know that I can afford to pay off the whole thing. Is it worth trying to cheap out and is it worth keeping this bad stuff on my credit report for another year or should I just get this paid off as soon as possible? We're going to be looking for a mortgage withing 2 - 3 years.

I'm trying to use the Experian free trial at the moment but it appears to be having a few technical problems.

TBagpuss

why would they accept less that they are owed, when they know you can afford to pay it in full?
And why do think it is morally acceptable to steal this money from them?
the 6 year period related to when the debt was last acknowledged, not when you defaulted. When did you last speak to them or make a payment?

CaptainH

Because the stress and fines they imposed upon me when I was broke mean I would love to do anything to screw them over. Any money I save paying back will only be a fraction of what I was paying just after the recession hit, paying loads in overdraft fees just to pay the bills. I could only work 20 hours per week for six months and spent a year with £0 income (not even JSA for reasons I won't go into) paying rent on my credit card. They're still coming out of this quids in (the collection agency is working on behalf of HSBC who I owe the debt to). I won't lose any sleep if some banker, who probably helped cause the recession, takes a hit on his bonus. I probably lost a years worth of sleep during the last five years due to money.

I've been paying the debt £50 per month for about 8 months now. And I don't expect them to accept the offer, which is why I was asking. I just got into Experian and my credit report is 908 and I have just over a year left before that default expires.

Thrugelmir

CaptainH wrote: »

I've been paying the debt £50 per month for about 8 months now. And I don't expect them to accept the offer, which is why I was asking. I just got into Experian and my credit report is 908 and I have just over a year left before that default expires.

You can't have you cake and eat it.

We're going to be looking for a mortgage withing 2 - 3 years.

No chance. Unless you deal with the situation in a mature and responsible manner. You need the lenders. They don't need you. Their rules to play the game.

stator

Just send them a settlement offer and see what they say. No harm in trying. If they say no you'd be better paying it off and keeping a clean healthy credit history for a few years so you can get a mortgage.

Quimoi

CaptainH wrote: »

...I have just over a year left before that default expires.

Just to point out that even though the default disappears off your report after six years the debt still exists and the creditor can keep chasing you for the money. Worst case they take you to court and you end up with a CCJ on your report for another six years.

I do sympathise about the stress/hassle of the last five years and am no friend of many financial institutions but I'd pay the debt when you have the money - no harm in trying for a partial settlement first though as others have said.

JKSandy

If you've been making payments over the last 8 months does that not reset the 6 year rule?

glentoran99

CaptainH wrote: »

Because the stress and fines they imposed upon me when I was broke mean I would love to do anything to screw them over. Any money I save paying back will only be a fraction of what I was paying just after the recession hit, paying loads in overdraft fees just to pay the bills. I could only work 20 hours per week for six months and spent a year with £0 income (not even JSA for reasons I won't go into) paying rent on my credit card. They're still coming out of this quids in (the collection agency is working on behalf of HSBC who I owe the debt to). I won't lose any sleep if some banker, who probably helped cause the recession, takes a hit on his bonus. I probably lost a years worth of sleep during the last five years due to money.

I've been paying the debt £50 per month for about 8 months now. And I don't expect them to accept the offer, which is why I was asking. I just got into Experian and my credit report is 908 and I have just over a year left before that default expires.

then nothing is going to expire, otherwise no-one would have to pay back a loan with a term over 6 years

stator

The defaults will still drop off your credit search after 6 years.