Paying debt off vs DMP/Bankruptcy
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bilbodreams
Posts: 101 Forumite
Hello. Hope I am posting in the right area.
My OH and I had over 25000 gpp worth of debt, from the year 2009 onwards, some of it on his name, some of it on my name, over the last few years we have been worked really hard to pay it off. We are down to the last 1200 :j :
However , last year I defaulted a Santanderrr loan a few times. This has gone on my credit report. The debt with Santander is now clear though.
We would like to buy a bigger property in the next couple of years. I understand that my credit report won't be "clean" for six years from the day of the default.
How can we improve the chances to get a mortgage?
If we had filed for a DRO or Bankruptcy ( instead of paying the debt off)we would have been "cleared" by now, is that right?
Would it be in our favour somehow that we paid the debt off ( having defaulted?
My OH and I had over 25000 gpp worth of debt, from the year 2009 onwards, some of it on his name, some of it on my name, over the last few years we have been worked really hard to pay it off. We are down to the last 1200 :j :
However , last year I defaulted a Santanderrr loan a few times. This has gone on my credit report. The debt with Santander is now clear though.
We would like to buy a bigger property in the next couple of years. I understand that my credit report won't be "clean" for six years from the day of the default.
How can we improve the chances to get a mortgage?
If we had filed for a DRO or Bankruptcy ( instead of paying the debt off)we would have been "cleared" by now, is that right?
Would it be in our favour somehow that we paid the debt off ( having defaulted?
0
Comments
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Sorry title should say DRO not DMP0
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If you had done a DRO or Bankruptcy then both of these are forms of insolvency. They may no longer have been visible on your credit file but future lenders could ask "Have you ever been insolvent?" as part of an application. If they were to ask this then you would've had to declare it - even if it was no longer showing on your file - and this may damage your ability to secure future credit.
Also if you have/had a mortgage property at the time of considering insolvency you may have put your home at risk of repossession. Your situation is not 100% clear but considering you are now down to the last £1200 (well done by the way) you should continue to negotiate to get it cleared. Bear in mind that the older information is on your credit file (normally) the less impact it will have anyway.
Laura
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
Thank you Laura, I am a bit more clear about it now, and yes, we do own a property so going bankrupt was not a good idea for us, it has been hard, many many sleepless nights, but now that we can see the end, I feel happy and proud we manage to get where we are.0
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Build a good deposit up is the key. Pay down your existing mortgage by overpaying. Time does heal.0
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