Old HSBC student overdraft debt now with Robinson Way

Kuriousoranj

Hi all - I'm new to the forum so I hope I have posted this in the correct place.

While at university I took out a second student overdraft of £700 with HSBC to supliment my already large NatWest overdraft of £2000. I basically took on the account, withdrew the money and ignored the account. Stupid now I look back on it! The account was opened 4/6/2010, and as far as I can remember never used apart from withdrawing the money to Max out the overdraft.

Anyway, I finished university and paid off all of my NatWest debt and now have a Barclays current account without any overdraft and no other debts/credit cards etc.

I continued to ignore the HSBC account and received letters from a number of different debt collectors that I ignored thinking that it didn't matter.

Roll on 5 or 6 years and while I have no other debts I am unable to get things like mobile phones etc because of my credit score. I am also in a relationship and would like to look at getting a mortgage at some point.

So my question is, what can I do about this default? Looking at my noddle account the default is dated 4/11/2011. I've no idea why it was almost a year and a half later? It is now in the hands of Robinson Way and I am in a position where I can set up a payment plan, but do not want to risk it staying on my account any longer than it needs to be.

If I begin paying will it reset and remain on the account for another 6 years? If I pay it all off before the 6 years will it be cleared from my credit report?

Thanks in advance!

crazy_cat_lady

It will drop off your report 6 years from the default date, whether it's settled or not.

sourcrates

Hi,


I would be wary of doing anything at the moment.


It can be tricky determining "cause of action" dates with overdraughts, as you are not required to make monthly repayments.


Although the default date may be 4/11/2011, the actual cause of action date, the date a creditor could of taken legal action against you, and the date from when the time clock starts running, will undoubtedly of been many months before this.


So any payment or written acknowledgement will re-start the statute barred clock, it could become statute barred this july/august.


Nothing you do will change when the default drops off your file though, it will be gone after 4/11/2017.

Kuriousoranj

Thanks for that. So, just to be sure, if I contact the debt collector and arrange a repayment plan, I may risk the date at which they are legally allowed to chase me, but no matter what I do, the default will remain the same?

If I do pay off the debt, will that make a major difference to my credit score? Even if it remains, it'll show as settled?

And finally, do I risk anything like court action/CCJ/bailiff etc? I just want to be as clear as possible by Nov 17 so I can look at getting a mortgage.

Many thanks for all your help so far!!

sourcrates

Nothing you do will change the default status.
Paid or unpaid won't affect the drop off date.

Yes legal action is a possibility. Credit scores are meaningless.

It's credit history that counts, if you will be wanting a mortgage soon then paying off the debt is best policy, rather than hoping it goes statute barred.
After default drops off, it will be like it never existed.

Kuriousoranj

Brill. Thanks for that! I'll get in touch with them and start paying it off.

Is it worth trying to see if theyll reduce the debt owed or will that show up too?

KirstyO

if you don't pay off the full amount it will show on your credit file that you haven't paid the full amount that you owed (until the account drops off - either 6 years after default or 6 years after account was closed, whichever comes first). Plus they have every right to say 'no' to any offer that you make.


Generally speaking in the debt world, people who have been paying only token payments for a while and then come into some money through a gift or inheritance perhaps, will make a Full and Final offer. This indicates that they are willing to pay an agreed lump sum in order to end the debt, and the creditor either accepts and acknowledges that if the reduced payment is made by a certain date they will not pursue the remainder, or they may negotiate the sum being offered, or they may say no.


I've not really heard of anyone negotiating the total amount owed and continuing to pay monthly - so be careful unless you have a lump sum to throw at it.


PS - I could have got this completely wrong, but as someone who made full and final offers to my creditors while I was in debt, I know that when I negotiated the amount for one of them, I only had 14 days from the date of the letter to pay the reduced amount in full, or the terms would have reverted back to my normal monthly payment, for the full amount.

Kuriousoranj

I guess its best then just to pay the full lot in installments. If I do drop on any money in the future I can discuss a settlement with them then.

With regards to the default, am I more likely to get a mobile phone contract with my credit report showing that I'm paying the default off in installments? Does that even show up on the report?

I've also just been accepted for a credit card with Vanquis which I will use and pay the full balance each month when I am paid. I guess this will also help? At the moment all my credit file shows is a current account with no OD and the default, so I imagine lenders don't have much more to go by when considering offering me credit.

Thanks again for all the replies - they've been really helpful!!