Part settling an account that was defaulted.

absolutereturn

scoops82 wrote: »

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?

The default drops off the credit file six years after being recorded, regardless of whether it's paid back fully, partially or not at all. The damage is done for six years, wiped off after that.

scoops82 wrote: »

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.

For the purposes of credit rating it won't make any difference. IMHO I don't think it' s morally wrong to default against a defaulter, if they went bust, aren't they worse defaulters themselves?

scoops82 wrote: »

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

They will, but they will also have bought the debt for pennies in the pound, probably just 10% or less.

scoops82 wrote: »

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

The files should be updated with the name of the current owner but she should make sure the original default date stays the same, in some cases it gets 'updated' to the date when the debt changed hands and this should be challenged if it happens.

absolutereturn

WillJMA wrote: »

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

Payment or non-payment doesn't affect your report one way or other, this is a common myth. The only change could be when a full & final settlement is accepted by the creditor and the default gets reported as partially satisfied, for most practical purposes it's still a default while it stay on record.

I don't disagree with the idea of not paying, however, you should be aware that debts only go statute barred when there has been no payment for at least six years, otherwise court action is still possible after the defaults drop off. It's a tricky situation because if you never stop payments the clock never starts to run, if you do they could take you to court. It doesn't always happen and there are options open to you if they do. :cool:

WillJMA

I don't disagree with the idea of not paying, however, you should be aware that debts only go statute barred when there has been no payment for at least six years, otherwise court action is still possible after the defaults drop off. It's a tricky situation because if you never stop payments the clock never starts to run, if you do they could take you to court. It doesn't always happen and there are options open to you if they do. :cool:

Thanks for the info, in my case it's been well over 6 years since the last payment was made to them, and over 6 years since any contact has been made on my part. Also the default dropped off my report this year as it took them a while to report it.

fermi

Just to be clear, if the account and default have already dropped off the report due to the default being > 6 years old, so settlement - partial or not - will/should make anything about the debt 'reappear' on your report.

absolutereturn

WillJMA wrote: »

Thanks for the info, in my case it's been well over 6 years since the last payment was made to them, and over 6 years since any contact has been made on my part. Also the default dropped off my report this year as it took them a while to report it.

In that case the debt is statute barred and you can forget about it, but do keep an eye on the post. Claims can still be issued for debts that are time barred and you would have to submit a defence of statute barred.