Debt plan

Gazbill

Hi,

Looking towards the future and want to be debt free (or at least making progress towards a resolution). Ultimately looking at getting a mortgage with my partner within the next few years and would like to know the best path towards clearing the debt in order to secure the mortgage. My partner has no debt. My credit rating is fair.

History:
-4 unsecured unpaid debts totalling ~10k which are unmanaged and I have lost track of the creditors, they also do not show up on any credit report, no letters come through? I am not contributing to these loans and they are all over 6 years old. The 3 main credit bureau's have all my previous addresses, I am on the electoral roll. How do I ascertain the current state of these debts, or as I have not heard anything and no mention on my credit report, is it better to just sit tight?
-I was paying into a previous DMP for all the debts up until 3 years ago, would this reset the clock on the statute barring?
-Would returning to a DMP or IVA be better in this situation? Would this affect a mortgage?
-Do I need a solicitor?
-I cannot afford to make more than token amounts to any creditor until a salary increase due in September.
-I estimated it would take me ~11 years to pay off the debt as opposed to 3 years before they are statute barred (assuming the DMP resets the 'clock')

Please help!!

Any help or advise you can offer would be very greatly appreciated. Any questions please ask.

National_Debtline

Hi Gazbill


Just some initial observations in bold below. I'll check back in tomorrow but am sure others will be able to contribute in the meantime.

Gazbill wrote: »

Hi,

Looking towards the future and want to be debt free (or at least making progress towards a resolution). Ultimately looking at getting a mortgage with my partner within the next few years and would like to know the best path towards clearing the debt in order to secure the mortgage. My partner has no debt. My credit rating is fair.

History:
-4 unsecured unpaid debts totalling ~10k which are unmanaged and I have lost track of the creditors, they also do not show up on any credit report, no letters come through? I am not contributing to these loans and they are all over 6 years old. The 3 main credit bureau's have all my previous addresses, I am on the electoral roll. How do I ascertain the current state of these debts, or as I have not heard anything and no mention on my credit report, is it better to just sit tight?


Your credit report will only hold information going back six years. If these debts were defaulted on longer than six years back, that will explain why you can't see them on the report now.

Out of interest, how long ago did you apply for your credit report? This sometimes has the effect of flagging up your current whereabouts to old creditors, so if you only did this recently, it may be that letters start to reach you in the near future.

-I was paying into a previous DMP for all the debts up until 3 years ago, would this reset the clock on the statute barring?
In a word, yes. If there has never been a continuous period of six years where you've not paid these debts or acknowledged them in writing, they can still be enforced through the courts. Of course, whoever owns the debts now may have no idea of the payment history - they may have only very scant information.

-Would returning to a DMP or IVA be better in this situation? Would this affect a mortgage?


It isn't necessarily a case of one or the other. IF you end up having to engage with these creditors at all, it might be best to consider some sort of one-off payment in "full and final settlement". This could allow you to get a guarantee that the debts would no longer be chased, while avoiding doing anything that would unnecessarily affect your credit report ahead of a potential mortgage application.

-Do I need a solicitor?


There's no need to employ a solicitor for any of these options.

-I cannot afford to make more than token amounts to any creditor until a salary increase due in September.
-I estimated it would take me ~11 years to pay off the debt as opposed to 3 years before they are statute barred (assuming the DMP resets the 'clock')


This confirms to me that a DMP-type arrangement is very unlikely to be your best bet.

Dennis
@natdebtline

Gazbill

Hi Dennis,

Thanks for your quick reply and information so far, I still have a few concerns. Sorry for my ignorance.

How do I determine if the debts are statute barred, chaseable or likely to cause future judgements? How do I track down the current creditors?

I have only just filed for the credit reports with Equifax, Experian and Noddle (CallCredit), and updated addresses.

Have one default on record from 2010 which I just uncovered from the Noodle report, and no correspondence regarding, so assuming it will be statute barred soon? Would I need to do anything to wipe this record?

So would it be better to somehow to track down the creditors, and make arrangements to pay the debt in small token amounts? Unfortunately I am not in a position to pay the debt back in larger amounts until a pay rise due in September. Neither could I do a full settlement unless it was greatly reduced (is this likely?) I really don't want to "shoot myself in the foot" here by opening up old wounds, but I want the most stable and secure outcome. Not willing to gamble on debts disappearing, unless this is the most likely outcome.

Thank you for the advice on the solicitor and the DMP, I did not think it was necessary at this stage.

Any further advice is very welcome, thank you.

sourcrates

Hi,
I would sit tight for now, as Dennis says, if you recently checked your credit file, that will be "flagged up" to creditors, so they may start writing to you.

If letters do start arriving, there are various things you can do to slow them down a bit, until you decide on a plan of action.

Starting an IVA would greatly affect your chances of getting a mortgage, as its the next step down from Bankruptcy, it shows on your credit file, as well as the insolvency register, and would be visible for 6 years.

Another DMP will have a lesser effect, but is still not ideal for the purposes of getting a mortgage.

Wait and see if they wake up or not !!

National_Debtline

Gazbill wrote: »

Hi Dennis,

Thanks for your quick reply and information so far, I still have a few concerns. Sorry for my ignorance.

How do I determine if the debts are statute barred, chaseable or likely to cause future judgements? How do I track down the current creditors?

Statute barred? Based on what you've told us, probably not, as you state that you were paying them until three years ago.


Chaseable? Anything could fall into this category as debt collectors will always try their luck - then it's up to you to ignore/dispute/negotiate as appropriate.


Likely to cause future judgments? Impossible to state with any certainty from one case to the next. What I would say is that it would make little sense for an old creditor to dash straight to court the moment they tracked you down, without knowing anything about your general situation and ability to pay.

Gazbill wrote: »

I have only just filed for the credit reports with Equifax, Experian and Noddle (CallCredit), and updated addresses.

Have one default on record from 2010 which I just uncovered from the Noodle report, and no correspondence regarding, so assuming it will be statute barred soon? Would I need to do anything to wipe this record?

The 2010 default will take six years to drop off (like any other), so that day is not too far off now. Please bear in mind that this is not the same thing as the debt becoming statute barred - if you were still paying in until three years ago, the "clock" only started ticking when your payments stopped.

Gazbill wrote: »

So would it be better to somehow to track down the creditors, and make arrangements to pay the debt in small token amounts? Unfortunately I am not in a position to pay the debt back in larger amounts until a pay rise due in September. Neither could I do a full settlement unless it was greatly reduced (is this likely?) I really don't want to "shoot myself in the foot" here by opening up old wounds, but I want the most stable and secure outcome. Not willing to gamble on debts disappearing, unless this is the most likely outcome.

Basically, with the exception of that one default, it sounds as if these debts have long since ceased to have an effect on your credit report. There are only a few very specific events that could now change this:


- Entering a formal insolvency arrangement such as bankruptcy or an Individual Voluntary Arrangement (IVA) - realistically you are not going to do this;


- One or more creditors obtaining county court judgments (CCJs) - this too is rather unlikely on the face of it (see my comments further above).


All things considered, as sourcrates says, you may just want to sit tight for now and wait for creditors to make contact. As you're not looking to apply for a mortgage in the immediate future you don't need to do anything hasty. If you are trying to save up towards a deposit (because these days, you will certainly need one!) then these savings may give you more options in the event that any of the debts do resurface.


Dennis
@natdebtline

Gazbill

Many thanks for your replies.

The default was never paid through the DMP or directly so it should drop off my credit report soon.

Thank you for your advice I will sit tight for now and see what materializes.

Thank you for your assistance.