Default dropped off but still paying debt off

Missnikon

Hello, I defaulted an account back in 2009 which was promptly moved on to a debt collection agency. Now I have been paying them for the last 7years with no issues.

My question is this, the default for this account dropped off November 2015. Why has the account completely disappeared on my credit file?

Now I have no defaults yet still pay this company X a month (no fees or anything) will the fact I'm paying a debt agency so much a month still affect my mortgage chances? Technically no defaults and or anything to say on credit file I owe anything. Have I slipped into an unknown loophole?

[Deleted User]

Accounts are removed from your file 6 years after the default. The debt remains, however.

The debt will be factored into your affordability for a mortgage.

Missnikon

Thank you for your advice.

The bit I don't get is that this company I'm paying too doesn't show on my credit file anymore.
When the default dropped off the whole account Disappeared.

It's as if it doesn't exist anymore even though I'm paying it

Westminster

MissNikon wrote: »

Thank you for your advice.

The bit I don't get is that this company I'm paying too doesn't show on my credit file anymore.
When the default dropped off the whole account Disappeared.

It's as if it doesn't exist anymore even though I'm paying it

That is how the system is designed to work.

However, just because its not visible on your CRA files, does not mean you don't owe the money. It also doesn't mean it can't come back - if you stop paying and the creditor successfully claims a CCJ against you, it will be visible for another 6 years on your file unless you clear the CCJ within 28 days (the specifics may be slightly different - but this is the gist).

You will need to include the payments as an outgoing on your mortgage application (and I would be prepared for the mortgage lender to request several months of bank statements which will also show the payments).

In your situation - I would be highly tempted to contact your creditor with a full and final settlement for around 25-30% of the outstanding balance on the condition that they write to you before you make payment to confirm they will no longer pursue the debt.

This way, you won't have it included in your mortgage affordability calculation.

Missnikon

Thank you for your advice - I will have a look into that.

I know I've still to pay the debt back that goes with out saying and I'm happy to pay it back. I'm just worried that a potential lender of a mortgage might see me paying that money out monthly but not see who I'm paying it too because it's no longer on my credit file. So thought that might cause me an issue.

I have previously requested a settlement figure which they quoted halve of the debt which was great however they said they would relist a default against me by way of a 'partial settlement' Which I'm guessing would be their for another 6 years. However I have read that technically any default should only be counted from the first instance I fell into arrears & that they can't relist a default... I dare not risk it.

Westminster

MissNikon wrote: »

Thank you for your advice - I will have a look into that.

I know I've still to pay the debt back that goes with out saying and I'm happy to pay it back. I'm just worried that a potential lender of a mortgage might see me paying that money out monthly but not see who I'm paying it too because it's no longer on my credit file. So thought that might cause me an issue.

I have previously requested a settlement figure which they quoted halve of the debt which was great however they said they would relist a default against me by way of a 'partial settlement' Which I'm guessing would be their for another 6 years. However I have read that technically any default should only be counted from the first instance I fell into arrears & that they can't relist a default... I dare not risk it.

Disregard anything they say - the account will not reappear.

In fact, I would be tempted to respond to them if they said this, that you want it in writing so you can bring a complaint to the FOS as it would be illegal action on their part (they would never do it - but the poorly trained telephone staff are often sources of poor / erroneous information which they like to try passing off as fact).

Half sounds a bit much to me - pop over to the debt free wanabees forum for a good template letter offering 25%

fermi

MissNikon wrote: »

I have previously requested a settlement figure which they quoted halve of the debt which was great however they said they would relist a default against me by way of a 'partial settlement' Which I'm guessing would be their for another 6 years. However I have read that technically any default should only be counted from the first instance I fell into arrears & that they can't relist a default... I dare not risk it.

They can't. They are telling you a load of nonsense.

A F&F will not make it reappear.

Missnikon

Westminster wrote: »

Disregard anything they say - the account will not reappear.

In fact, I would be tempted to respond to them if they said this, that you want it in writing so you can bring a complaint to the FOS as it would be illegal action on their part (they would never do it - but the poorly trained telephone staff are often sources of poor / erroneous information which they like to try passing off as fact).

Half sounds a bit much to me - pop over to the debt free wanabees forum for a good template letter offering 25%

Thank you. :beer:

North37

Miss Nikon - I am in exactly the same boat as you. I want to know 100% that if we do a partial settlement it won't have any effect on my mortgage application (we won't apply to the same company as our creditors) and credit score, but in fact might improve it as we won't be in a DMP. But I've read that you need to show 3 months worth of bank statements which would show the DMP so we might have to wait till that's clear. Good luck and please let me know how you get on.

North37

We have a new mortgage and I was right it has no effect.

dranzer01

so you guys are saying when 6 years passes and the default comes off your file - you still have to pay that debt?

is that what you guys are saying?

I think most people thought if you have a debt and dont pay it/default on it then a default appears on your credit file, that is effectively a punishment because you didnt pay your monthly payments on the debt - now it sounds like, it wouldnt matter

so its a punishment for 6 years + you still have to pay the debt in some way shape or form......