please help asking for a friend

all_hours

a friend is having a problem and doesn't have internet at the moment so i'm asking this on his behalf.

he's in the middle of setting up arrangements with creditors. he has a credit card ,current account od ,and loan with the same company. the agreement with the loan and current account is complete - the agreement with the card isn't yet.

he paid into his current account to cover the negotiated lower amount for the loan but the credit card took this. he can't pay any more before the loan payment is due.

can they put him in a position where he breaks the other agreement and pay themselves a higher percentage than other creditors? can he do anything legally - the card won't return the payment.

tia.

HairyHandofDartmoor

He should pay all his creditors an equal amount I think, but others know more about this than me. I'm sure someone will be along later (or in the morning) who can give you better advice.

CLAPTON

He needs to open a new bank account urgently like today.. .. with a bank he has no debts to and make sure all his income goes in there.
Then he will have to treat the credit card, loan and current account as one debt.

all_hours

CLAPTON wrote: »

He needs to open a new bank account urgently like today.. .. with a bank he has no debts to and make sure all his income goes in there.
Then he will have to treat the credit card, loan and current account as one debt.

he has another account that he's been using - he only paid in enough to cover the loan.

i don't think he knew he should treat it as one debt as he mentioned being put through to several different departments within the same organisation to come to arrangements. thank you clapton - i will pass on that information.

all_hours

another question he had - his situation is temporary and when it improves he'll be able pay off the debts in a few years.

he said not all creditors are issuing defaults - some are understanding and keeping the reduced arrangement internal

if the debts are showing as settled but with defaults 3 or 4 years old - will this stop him getting a mortgage?

will the number of defaults make a difference - if he has 4 defaults or 6 showing on his credit record?

all_hours

please can anyone help advise about getting a mortgage with old defaults.

Treadmill

Each lender has its own lending criteria but I would suggest that having a default would lead to rejection by the main stream lenders but you/He could get a mortgage with a sub-prime lender, its getting tighter though and some of these have stopped lending to new borrowers. Obviously the worse your credit history the higher the APR.

all_hours

thank you treadmill.

i'll pass on that information.