Debt Advice (DMP/F&F)

sullino

Hello, I would appreciate some advice.

I've had a DMP since mid 2009 with the debt now down to ~£23000. I am 27 and have been unemployed since September 2014 (back to university) but my father has made the DMP contributions on my behalf, the DMP and creditors don't know that but I think I should tell them now to help with a F&F offer. My father would now like to give me a lump sum for the F&F to clear my debt (~£7000). One debt is with RBS the others are with debt collection agencies. How low should I start as a percentage considering my situation? (10-20%?)

Furthermore, should all defaults now be removed from my credit report? I have requested credit reports from Experian and Equifax. Callcredit however have four defaults showing on my account. A and B starting in Jan14 (A is a doubler of an account that is actually shown in the closed section, should A not have the same default date as the closed account?), C in Dec13 and RBS went into arrears in Aug10 but shows a default on Jul15 (even though I have been making payments! It's been in arrears since then so surely should have defaulted earlier?)

I would like to be clear of my debt and improve my credit rating as I am getting married this year and do not want this affecting our relationship and lives together (mortgages etc)

Thanks in advance

HappyMJ

sullino wrote: »

Hello, I would appreciate some advice.

I've had a DMP since mid 2009 with the debt now down to ~£23000. I am 27 and have been unemployed since September 2014 (back to university) but my father has made the DMP contributions on my behalf, the DMP and creditors don't know that but I think I should tell them now to help with a F&F offer. My father would now like to give me a lump sum for the F&F to clear my debt (~£7000). One debt is with RBS the others are with debt collection agencies. How low should I start as a percentage considering my situation? (10-20%?)

Furthermore, should all defaults now be removed from my credit report? I have requested credit reports from Experian and Equifax. Callcredit however have four defaults showing on my account. A and B starting in Jan14 (A is a doubler of an account that is actually shown in the closed section, should A not have the same default date as the closed account?), C in Dec13 and RBS went into arrears in Aug10 but shows a default on Jul15 (even though I have been making payments! It's been in arrears since then so surely should have defaulted earlier?)

I would like to be clear of my debt and improve my credit rating as I am getting married this year and do not want this affecting our relationship and lives together (mortgages etc)

Thanks in advance

Did all the creditors agree to the reduced repayments in writing at the time you entered into the DMP?

If they didn't agree in writing then you may have not been in arrears until August 2010 and the reduced repayment may not have shown as a default until July 2015. The payments you were making may have been quite close to the contractual minimum payments due.

They don't have to register an account in default straight away if you're making reduced payments. Sometimes the only way to force them to do that is just to stop making any payments at all.

Do you own anything of value such as a house? If not I'd consider getting the debt under £20,000 and consider a DRO. Your dad won't have to pay much and all of your remaining debts will be written off. You could also consider bankruptcy which will write everything off. As you've no income you won't be required to pay anything.

sullino

Thank you for the quick reply.

I am not 100% sure if they did, I don't ever remember receiving written confirmation from any of the creditors to be honest. I understand that I would have been meeting minimum payments but if the interest had been frozen and my monthly payments have been going up over the years surely I'm still making the minimum payment and they can't default?

I don't own anything and I live in Scotland so I don't think DRO is an option for me. Bankruptcy just sounds scary to me as I believe it will cripple me in the future financially.

As for being unemployed, I now have my masters so I'm hoping I'll get a job asap!

Thanks again

fatbelly

The Scottish equivalent is MAP bankruptcy, with max debts 17k

There are other options

https://www.nationaldebtline.org/S/information/10%20ways%20to%20clear%20your%20debt/Pages/default.aspx

It's worth getting advice before changing your strategy

National_Debtline

Hi

It's a good shout from fatbelly to get an overview of your options. We've made a few changes to the website recently and you might find some of the links have changed. The page I think fatbelly was linking to is now here:

www.nationaldebtline.org/S/information/10%20ways%20to%20clear%20your%20debt/Pages/default.aspx

It's worth giving us a call if you would like to discuss your options with an adviser.

James
@natdebtline

sullino

I have spoken to representatives of stepchange and the national debtline. They were very helpful and managed to clear a few things up.

The debts are now over 6 years old so the defaults will not show on my credit report. However the debt is still there, so a partial payment of any kind would make my debt 'live' again and this will show on my report on the date paid. A 'settle' or more likely a 'satisfied' status would be shown as it's a partial payment. This would have less severe consequences than going bankrupt though as that would stay on my report for a further 6 years so wouldn't be able to get a mortgage in the future.

Has anyone had any experience in F&F settlements? How should I approach the debt collection agencies? A CCA request with an account statement initially letting them know that I will be making a F&F offer so they don't take me to court? How low should the offer be when they get back to me? 20%?

fatbelly

sullino wrote: »

I have spoken to representatives of stepchange and the national debtline. They were very helpful and managed to clear a few things up.

The debts are now over 6 years old so the defaults will not show on my credit report. However the debt is still there, so a partial payment of any kind would make my debt 'live' again and this will show on my report on the date paid.

I hope they didn't say that because it's mighty confused.

Regarding your credit file, the entry disappears 6 years after it is marked 'defaulted' or 'settled', whichever comes first. It does not reappear as an entry.

Regarding statute barred status, a debt (in Scotland) becomes statute barred 5 years after it is last acknowledged by payment or in writing. In Scotland, the debt is then 'extinguished' and ceases to exist.

sullino wrote: »

A 'settle' or more likely a 'satisfied' status would be shown as it's a partial payment. This would have less severe consequences than going bankrupt though as that would stay on my report for a further 6 years so wouldn't be able to get a mortgage in the future.

Has anyone had any experience in F&F settlements? How should I approach the debt collection agencies? A CCA request with an account statement initially letting them know that I will be making a F&F offer so they don't take me to court? How low should the offer be when they get back to me? 20%?

If a debt is settled under a full & final settlement the correct mark according to the ICO is 'partially settled'.

Any form of insolvency creates a fresh (and damaging) mark on your file. Often people go for insolvency at the same time as their debts are being defaulted anyway so it doesn't make much difference either way - their file is trashed anyway.

If you give us an idea of what each debt is, roughly how big, and when you last made a payment to it we could suggest a starting point for F&F or whether it was just a non-starter.

National_Debtline

Just to clarify, if a defaulted debt is still showing on your credit file it will drop off your credit file 6 years after the original default date, regardless of whether you settle or not.


EDIT - cross posted with fatbelly


James
@natdebtline

sullino

Regarding your credit file, the entry disappears 6 years after it is marked 'defaulted' or 'settled', whichever comes first. It does not reappear as an entry.

That's some good news.

Regarding statute barred status, a debt (in Scotland) becomes statute barred 5 years after it is last acknowledged by payment or in writing. In Scotland, the debt is then 'extinguished' and ceases to exist.

I have been making regular payments through DMP for the last 6/7 years so it rules that out.

If you give us an idea of what each debt is, roughly how big, and when you last made a payment to it we could suggest a starting point for F&F or whether it was just a non-starter.

Current account with OC/£500
Credit card with DCA/£5,900
5 different accounts mixture of credit card, loan and current accounts with DCA/£16,600

DMP payments are currently £120/month.

Sazzie23

i think the F&F thread suggests you start negotiations with an offer of 25% if its a DCA or 40% if its original creditor.

Success depends on the time of the month, the comission rate of the person you deal with and the moon being first house of jupiter...i.e. its fickle and you'll get different success with same debts on same creditors!

fatbelly

sullino wrote: »

Current account with OC/£500
Credit card with DCA/£5,900
5 different accounts mixture of credit card, loan and current accounts with DCA/£16,600

DMP payments are currently £120/month.

You probably won't get anywhere with a F&F on a current account with OC but could try challenging charges & fees

On the other stuff, if the debt has been bought by a debt buyer like Lowell, cabot or 1st credit then yes 25% is a good starting point. Lowell are writing to a lot of people with a 50% offer and that is just their starting point.

If the original creditor still owns the debt and they have instructed a collection agency like Wescot or Moorcroft then 40% is not a bad place to start.

Remember you can always go up.