Default Question - Part Settlements??

Hi all, having recently discovered the site it is great to see that I am not all alone in trying to cope with my debts.

I have finally faced up to the fact that my finances need confronting, as I have been trying to ignore the fact that I have been missing payments on a credit card and loan from Cahoot. I have student borrowing which I am paying regularly as well as a credit card from HSBC which has somehow gotten up to £7000!, but which I am also paying regularly and have not missed any payments on this one.

However the two items from Cahoot, one for £3000 and one for £4000 have now defaulted and have gone to collection agencies. I have arranged regular payments with them as I am not in a position to settle the debts.

My question is this; if I do settle the debts by offering them about 20%-50% of the amounts (which I see may be an option) will this show differently on my credit score, as opposed to settling in full? Also does the fact that I now have defaults mean that I will not be able to get ANY credit for the next 6 years??

Thanks all.

Comments

  • scotswarvet
    scotswarvet Posts: 78 Forumite
    Also does the fact that I now have defaults mean that I will not be able to get ANY credit for the next 6 years??

    I do not think you will get much traction from finance companies until the defaults have dropped off.

    A friend of mine had 100k unsecured debt which she has paid nothing back to this very day, since 1998, and is only now starting to get credit again....

    Hope this helps you a lil?
  • loobyloo1980
    loobyloo1980 Posts: 587 Forumite
    ttonyjba wrote:

    My question is this; if I do settle the debts by offering them about 20%-50% of the amounts (which I see may be an option)

    If you have read this in the same place I did, then you have probably misread it as I did. It is a 20-50% REDUCTION in the debt, NOT a settlement for 20-50%. I though this was the case and got very excited, but sadly not the case.

    Just thought I would point that out to you, in case you made the same mistake.
    Official DFW Nerd #148 :D
    Debt level @ highest (May 2004): £15000 :eek: Debt level @ August 2006: £9591.53
    Lightbulb moment May 2006 :idea:
  • loobyloo1980
    loobyloo1980 Posts: 587 Forumite
    I do not think you will get much traction from finance companies until the defaults have dropped off.

    A friend of mine had 100k unsecured debt which she has paid nothing back to this very day, since 1998, and is only now starting to get credit again....

    Hope this helps you a lil?

    so she has made no repayments at all, yet still got credit after the default finished? Only reason I ask is that I have a default for credit card, which is now 3 years old. Am desperate for a mortgage, but know there is no chance while showing defualts etc. Always wondered what the position would be once the default had jumped off my credit report. Interesting.......
    Official DFW Nerd #148 :D
    Debt level @ highest (May 2004): £15000 :eek: Debt level @ August 2006: £9591.53
    Lightbulb moment May 2006 :idea:
  • scotswarvet
    scotswarvet Posts: 78 Forumite
    Any defaults will drop off after 6 years and you will be free to start applying for what you want without any blacklisting..... :D
  • loobyloo1980
    loobyloo1980 Posts: 587 Forumite
    Any defaults will drop off after 6 years and you will be free to start applying for what you want without any blacklisting..... :D


    That's good then, not that I will get more credit debt, but I want to buy a house and that is very good news :T
    Official DFW Nerd #148 :D
    Debt level @ highest (May 2004): £15000 :eek: Debt level @ August 2006: £9591.53
    Lightbulb moment May 2006 :idea:
  • barber1982
    barber1982 Posts: 194 Forumite
    Is that 6 years from the default or 6 years from when you pay everthing off. I am despair to get a mortgage
  • loobyloo1980
    loobyloo1980 Posts: 587 Forumite
    barber1982 wrote:
    Is that 6 years from the default or 6 years from when you pay everthing off. I am despair to get a mortgage

    6 years from default :D
    Official DFW Nerd #148 :D
    Debt level @ highest (May 2004): £15000 :eek: Debt level @ August 2006: £9591.53
    Lightbulb moment May 2006 :idea:
  • Moses
    Moses Posts: 18 Forumite
    There is always some Ar___ ! Company that will lend you money, they have mountains of the stuff, which all us idiots have helped them to build with high interest payments, late charge payments every time we fill our car up we our paying over the odds to help finance the credit card payments the shops have to pay 2% to 5%, the bit we don't see.
    The question is are we idiots ?
    Mortgage aside do we realy need to keep borrowing and not saving.
    Have we not learnt any lessons yet ?
  • Iona_Penny
    Iona_Penny Posts: 697 Forumite
    First Anniversary Combo Breaker
    I speak from the position of having a ccj on my file which although paid will stay until next year. It really does affect loads of things although I have been able to get a mobile phone contract for the last two years. However I have learnt my lesson and good practices (many from browsing this site ) but I hope that in the future I WILL be able to get a card to use to my advantage. Booking flights or hire cars are very difficult without one for example; I also want to be able to have a card that I use on internet purchases only (I shop at Tesco on line and order wool) at the moment my husband has to use his card for me. But there will be no debt run up.

    As for getting a mortgage where are you saving? If it is a high st. name I would go and speak to them and explain how you are going to pay ie take budget sheets and bank statements etc Come clean about how the debt occurred and what you did to pay it off, especially if it is going to be a joint mortgage with someone eith a clean credit history. You have nothing to lose. But steer clear of the finance companies who will be happy to lend no questions asked.
  • fantaice
    fantaice Posts: 8 Forumite
    6 years from default :D

    Just to make sure and not give some people false hope.....

    Say you take out a Loan/Credit card in August 1999 and default on it.......

    Its coming close to August 2006.....and you think that you'll be able to get credit again as is will drop of your credit file........

    If a Debt Collecting Agency tracks you down 1 year- 3 years even 5 years into the DEBT....then the counter is set to ZERO.....and you will wait another six years.......which would be 2012......
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