Old debt - how will it affect me?

iSaving

It can NEVER hurt to make offers where you can. If it's an old debt, a lot of companies will accept a partial payment to clear the debt - assuming they haven't sold it on to a debt collection agency.

You say you owe 12.5k and are repaying at £300 per month - does this take into account any interest payments, or are you not incurring interest on any of these accounts? I'm sure you've done the calculations, but paying off at this rate will take 3 and a half years to clear, assuming no interest is being added on. If there is interest being applied, you need to re-plan how to pay off the debt, trying to hit the highest interest debts first.

poordolly

Thanks everyone - Will check out the wannabe board!

I don't think I'm accruing any interest - everything looks to be sold onto DCA's. There are only 2 that are not and the amount on my credit file is the same as the amount I thought I owed so hoping that's correct!

There are two biggies at £1549 and £1959 these are the oldest and going to be the hardest for me to clear, then there are a few at £500-650 but most are less that £200.

iSaving

I didn't see you being chased for the £1959 in your previous replies. How old is that debt? Is the £1549 Lloyds? (you mentioned a slightly different figure earlier).

Have you contacted any of those companies chasing you? Have you explained your circumstances and accepted liability and made any offers yet?

poordolly

My error - the Lloyds one is £1598, the other one is Natwest and not being chased for that one, it's from 2011.

iSaving

poordolly wrote: »

My error - the Lloyds one is £1598, the other one is Natwest and not being chased for that one, it's from 2011.

I suspect, if they've not been chasing it since 2011, it's unlikely they'll start now - did they ever sell that debt on (have you ever had any external debt collection letters on that one)? If not, I would avoid repayments on that while satisfying the ones you are being actively chased for. In theory if nothing ever surfaces on that one, it should clear off your credit report at some point in 2017.

By all means, do not just forget about it. But there's not a lot of point paying off a dormant debt if they've already marked your credit record and given up chasing it.

jamesd

Before you contact your creditors read what National Debtline has to say about the statute limitation period. The key part is:

"A simple contract debt will normally be statute-barred if:
the creditor has not already obtained a county court judgment (CCJ) against you; and
you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years; and
you have not written to the creditor admitting you owe the debt during the last six years."

If you write to the companies seeking offers you're likely to end up admitting that the debt is yours and restarting the six year clock from the date of your letter. You've already reset it for the ones you made payments on.

Don't simply respond to all chasing letters, that automatically gets you into a worse situation by restarting the statue barring clock. Usually the best thing to do is completely ignore them until a letter from a real court arrives. Instead, pick and choose any where it seems sensible to make an offer in "full and final settlement", probably those you have acknowledged recently, not those soon to be statute-barred.

You should be discussing this in the Debt-free wannabe section where you're less likely to get replies suggesting actions that will cost you money unnecessarily.

What you should start by doing is making a list of each debt, the default date if you know it, the last time you either made a payment or admitted that the debt was yours in some way, like by making an offer to settle, and the amounts.

Once you have that list you can pick the ones that it's best to leave until they are statute-barred after six years and which you might want to make payments on. For the small ones of a few hundred Pounds it's unlikely that they will ever do more than write you letters because the cost of taking you to court is too high compared to the potential gain.

Essentially you should pick those that will stay on your file for many years because you acknowledged them recently and maybe consider paying them, while leaving the others to become statute-barred. The recent ones will then stay around until six years after you complete paying them off. For the recent ones, because you're stuck with them for many years, your credit file would look better if they showed as settled than still fully owed.