£10k in 12 months

sillysladey

Hello Everyone,
I've joined MSE forum today to seek advise and also to make a log of my personal journey as I aim to become debt free in 2016.
So let me start by listing my debts:
Cabot Finance £8,960 (was a Lloyds TSB loan) default date Oct 2010
Cabot Finance £1,860 (was a Lloyds TSB Credit card) default date July 11

I'm looking to try and agree full and final settlements on these debts to get me back on track as I aim to buy my first home this year. The question is:
Should I make a Full and final offer on the larger loan account now, so in 6-9 months time I can say to any potential mortgage companies the debt is resolved. Or do I hold onto that money to help me put towards my deposit (which would be a huge help) and just not apply for a mortgage until this debt has been cleared from my credit file? ..... or would mortgage companies still be able to see this on my file?

I'd prefer to do the first as I know at some point I will need to settle this account. I'm just trying to think smartly, however selfish it may be. Any recommendations would be hugely appreciated.

P.s I've just made a F&F offer on my credit card account of £1k....... fingers crossed, will update you all on the progress of that one!

Many Thanks

C.

National_Debtline

Hi C and welcome to the forum.


It's a tricky one and likely to involve a bit of speculation on your part.


Defaults stay on your credit file for six years, so the older (and larger) debt will disappear altogether in around nine months from now, as you may be aware. The only "but" is that if Cabot were to sue you for the debt in the meantime, the judgment would stay on your report for a further six years from the date it is made. That would obviously be very bad news for your mortgage prospects.


Settling now would certainly remove any lingering danger of such court action, albeit this reduces your deposit fund and the "partial settlement" would show on your credit file until the default expires in October - at which point the debt disappears completely from your file. If you were to take the "settle now" option, I would therefore be inclined to wait until October before making any mortgage applications so that this is not a factor.


I am working on the assumption that you have not made any payments or written acknowledgements of the loan since the default date. When was your last payment/contact actually made? If it significantly predates the default date, the debt may become "statute barred" and thereby unenforceable sooner than you envisage.


Either way, the second option of sitting tight, keeping your deposit fund intact and waiting for the debt to disappear is effectively a calculated gamble that Cabot will not sue before the relevant deadline. I'm not a gambler, so I will leave that one to you!


It remains to be seen whether your F & F offer towards the credit card influences Cabot's behaviour in respect of the loan. Keep us posted.


Dennis
@natdebtline

sillysladey

Hi Dennis,
Will do, and thank you for your response. I found it very helpful.
I don't think this would qualify as 'statue barred' as I have made repayments as recent as 2014 when I was able too. Would this increase the changes of them going down the legal route?

I read that the more the debt gets passed on the less a company would have paid for the account. This has been passed between about 4/5 agencies, so I'm hopeful a small F&F will do the job. if they accep the credit card I'm going to in at £3k...., meaning Cabot have had 40% reclaimed. I think they would have paid significantly less for the account considering.
For now I'm playing the waiting game emailed them regarding credit card at end of last week, still no response.
Thanks again for your response, it's much appreciated.

Regards
C.

sillysladey

Hello, quick update on my progress:
I've negotiated with Cabot a £1k full and final offer in the credit card saving me £800.
Bad news is As I approached them to discuss a settlement offer on the loan, they instructed me it had gone to a solicitors, so now I'm very concerned.... I've tried contacting the solicitors but was only able to leave a message. any suggestions would be very welcome as I'm extremely nervous this will now scupper any chances I have of a mortgage.

sourcrates

sillysladey wrote: »

Hello, quick update on my progress:
I've negotiated with Cabot a £1k full and final offer in the credit card saving me £800.
Bad news is As I approached them to discuss a settlement offer on the loan, they instructed me it had gone to a solicitors, so now I'm very concerned.... I've tried contacting the solicitors but was only able to leave a message. any suggestions would be very welcome as I'm extremely nervous this will now scupper any chances I have of a mortgage.

Hi,

You treat solicitors the same as a DCA, they would still have to write to you to ask you to pay under the pre-action protocol, civil procedure rules, so you will still have an opportunity to settle this before any legal action can commence.

sillysladey

Hello update of my progress. I am due to pay £1k towards the c.c on 29/02/16 ...(that pay day can't come quick enough) & spoke with solicitors, we've agreed £100 pcm at the moment hopefully that will pasify them until it is wiped from my credit report!!! Or do you think this will remain on my credit report for a further 6 years? As a result of making monthly repayments? ��

sourcrates

sillysladey wrote: »

Hello update of my progress. I am due to pay £1k towards the c.c on 29/02/16 ...(that pay day can't come quick enough) & spoke with solicitors, we've agreed £100 pcm at the moment hopefully that will pasify them until it is wiped from my credit report!!! Or do you think this will remain on my credit report for a further 6 years? As a result of making monthly repayments? ��

A default only stays on your file for six years, period.

Nothing you do will or can alter that fact, pay it, don't pay it, makes no different to the date the default goes.

sillysladey

Hello, another update of events: credit card is sorted Boom! That's 1 off the list!!
But the loan has caught up with me, I spoke to them over the phone and agreed to pay £100 pcm. At the start of the year and I have been keeping up the repayments, only found out this week that despite that agreement because they now have my correct address they have gone as head and started legal proceeding and I should be getting a letter I think it's a county court claim.... They've asked for the full amount to be repaid or £50 per month.... Silly really when I'm already paying£100!!!!! But none the less I'm feeling deflated that my dreams of owning my own home by the end of the year may be about to take a huge blow if a ccj is issued against me....... Think this is a lesson to all people in my position, don't be so bloody honest!! had I not given them my current address they wouldn't have acted any further and just accepted the money!

sillysladey

Quick question:
Loan Account defaulted October 2010
If a ccj is issued now is it from the date of issue (e.g 1/4/16) or would it be in effect as of October 2010? And therefore expire from my credit file by November 2016?

KirstyO

ccj is a new action, the date of its issue would be reported.

Kitten868

Have you requested a cca? Even if it just buys you some time?