Part settling an account that was defaulted.

North37

So, if you have an account that was defaulted and the six years have now passed but there is still money owed and you do a part settlement, what happens to the credit score/credit file? As it is off the file does it come back?

fermi

No, it does not come back. One dropped off due to the default being 6 years old, that is it. Gone for ever, no matter what you then do.

North37

So Fermi, if I get an offer to a discount for the debt or even I could go to the creditor and make an offer or get them to make me an offer, say debt was 5k and we pay 3k nothing would happen to my credit file record etc? I'm about to apply for a re-mortgage to pay off my remaining debt and build an extension on my house, effectively I could not pay the full amount owed.

fermi

Yes, if it's dropped off it can't go back on, no matter what agreement you make.

WillJMA

Once the 6 years have passed the default is gone completely and is never reported again as the above poster also said.

I've done the exact same thing this year. After 6 years being chased for an original 2k loan from Welcome Finance, I spent 2 years paying £69 a month religiously until I ran into financial problems and could no longer pay the debt. Funnily enough I still had over £3500 remaining owed until it finally dropped off my report. Now they can whistle for it.

(How many people will disagree for my non payment just because it no longer affects my report?)

Thrugelmir

WillJMA wrote: »

(How many people will disagree for my non payment just because it no longer affects my report?)

Depends who you default on. You'll be unlikely to be granted credit again in the future from them or any related group company.

glentoran99

WillJMA wrote: »

Once the 6 years have passed the default is gone completely and is never reported again as the above poster also said.

I've done the exact same thing this year. After 6 years being chased for an original 2k loan from Welcome Finance, I spent 2 years paying £69 a month religiously until I ran into financial problems and could no longer pay the debt. Funnily enough I still had over £3500 remaining owed until it finally dropped off my report. Now they can whistle for it.

(How many people will disagree for my non payment just because it no longer affects my report?)

Whistle and/or take you to court,

WillJMA

Apart from the fact they haven't bothered to contact me for over 3 years, and the whole dodgy company went bust years ago and being sued by everyone they ever dealt with, makes me think I'm ok

scoops82

Just reading through your messages and it makes me think


My GF has an old debt with welcome - are we saying that if the debt is over 6 years old then it gets removed from your credit file and no matter how much you pay back the damage is done?


She currently pays back £50 per month but its going to take another 5-6 years worth of payments to clear her debt - maybe a bit quicker once the PPI claim has been resolved. As they have gone bust she is not likely to ever want credit there again.


We are doing things to try and improve her credit rating and although potentially morally wrong she could really do not having to make payments for the next 6 years.


Were not currently linked financially but would like to be in the future for mortgage purposes so some clarity would be most helpful.


Thanks
S

scoops82

Ive just remembered that her outstanding debt was sold to Experto Credite - so I assume they will still want paying.


When the debt transfers from one entity to another I'm assuming that no additional information is added to your credit file?

Westminster

WillJMA wrote: »

Apart from the fact they haven't bothered to contact me for over 3 years, and the whole dodgy company went bust years ago and being sued by everyone they ever dealt with, makes me think I'm ok

You may want to take a bit more care here.

The fact that an account with a balance is no longer visible on your CRA files after 6 years does not preclude a creditor taking you to court for a CCJ.

Whether a company is/was being sued and no longer existing it no real protection as their assets (i.e. loan book) will have been sold and the new owner will be looking to maximise their investment.

You paid it for a couple of years which effectively means you acknowledge the debt is/was legitimate so it may be more difficult to avoid payment if it does go to court.

You basically need 6 years to expire from your last contact / payment on the account before you are 'safe'