Help with becoming debt free

sdb1

It is finally time i crack down, make a active effort and get my finances in order. Instead of ignoring them for as long as i have.

All of my debts are old and I am not being chased down any more for them, the newest debt defaulted in 2013, but the updated date on my noddle report is from this year 2016.

I have previously been self employed for around 3 years, with some on and off times. This year being very off, with everything pretty much folding, due to some differences with people i was working with. So for the last few years money has not been "spare" to tackle debts.

I recently stopped being self employed a few weeks ago (still very fresh) and I am now thinking about finally sorting my debts out once and for all (i can).

The problem I am having at the moment is, knowing what to pay.

reading so much online, there are so many different opinions and ways people have tackled each problem they have had.

My main issue is knowing what to approach first or in some cases what bills to even approach.

Reading online, some people say do not even bother making a payment to a credit agency, as it will stay on your report and not make a difference anyway. (is this true?)

at the moment i currently have a total of £4800 total debt and £900 in ccj debt

so the grand total is £5700

over the year i have had a few offers from some of these companies (but being self/un-employed) this year i have been unable to make payments to these.

I was going to start by making offers to all of my debts to get a lower agreed amount to have the accounts satisfied and settled.

I think this is the 'normal" first step

How would i work out the most important accounts to pay off first?

What happens to your report once debts are paid / satisfied etc?

I am thinking or looking to get a credit card or credit accounts right away, as I have lived probably the last 10 years without credit. But it would be nice knowing my report is clean(er) and the score is higher than the 400s

I wasn't sure how much or little to post on this subject, if anyone is able to offer some suggestions or advice etc, but needs more information, I am happy to reply in this thread.

Thank you in advance.

sourcrates

Hi,

When you say old debt, how old do you mean ?

If you haven't paid any of these accounts for six years or more, and no CCJ`s have been recorded, the accounts may be statute barred.

Can you elaborate on the debts you have a bit more please, what type of debt, how old approx, balance owing etc

You need to establish if the accounts are statute barred or not, before you contact anyone.

MrsTinks

First - welcome to the boards!

Second - stop focusing on the rate thing! It's not a real thing and just "their guess" at what your credit worthiness is. Ultimately you could have a score of 999 and still be turned down if a lender feels you don't fit THEIR criteria, so stop being lured by a fictional number

The rest - post up an SOA - someone will no doubt post the link shortly, and that will help us advise you on how to attack your debts in the most structured way.

Yes you can ignore all your non-priority debts (so not the CCJ, council tax, rent etc) BUT it's fairly probable that will result in more CCJs which you would probably like to avoid...

Yes getting a bad credit card might help you improve your credit history if you pay it in full each month, but do you have the discipline to do that? Right now you won't qualify for much better than an Aqua card, but even they can serve a purpose. If that purpose is to get a mortgage in years to come then totally see the point. If not then avoid the temptation and just work on making your file look better in general for now.

sdb1

Hi, thanks for the replies. Didn't think i would get replies so quick.

Unfortunately none of the debts are statute barred, and when i say old, i mean 2012/2013 is the default dates.

The credit scoring number thing, i wasn't sure about that, they make it such a big thing, so im glad it isnt the be all and end all of this.

I honestly do not think i can get any type of credit card, even the high percentage ones. Last time i tried was around 2 and a half years ago, i got a credit card with a limit of £200. which i then used to pay the council tax bill (and then defaulted on the account) Strange thing is, I have not received any letters about this account, and it is not on my credit report at all. (i actually forgot about it until i just had to write that)

debts i have on my account

lowell £330 - defaulted 6/10/13

lowell £520 - defaulted 14/05/13

3 instant cash loans £274 - £335 - £385 ( i know i know) all were taken out within 2 months of each other (while not working and was last resorts) they defaulted april/may 2013. all 3 were taken out in november and december of 2012

I have a water bill £1500 from a old address in 2010. defaulted in 2014. At the time of living at this address (18 months) we thought that the water was included (as we were told when moving in) i was unaware of this bill until it turned up in 2014. At the time of living here i was sharing a property with someone and the bills and property was in both of our names. So i don't know why the bill only found me. (Will i have to pay this all myself?)

and as i mentioned 2 ccjs that total 900. one being 600 and one being 300 (2014)

What would be the best or most reasonable steps to start on this journey, and what would it mean for myself at the end of it. As i mentioned before I have no plans to take out any loans or get a big long list of credit in the near future, but at the same time I do not want to go all out, clear all this debt and be in the same position as i am with the debt anyway.

This is where i am getting confused reading online, some times i am seeing do not pay and just let it come off the report, some i am seeing offer small (15%) and then haggle to get a deal if the money is available.

National_Debtline

Hi

The defaulted accounts will drop off your credit reference file completely 6 years after the original default date. The debt will still technically exist, but at that point they’ll stop having a negative impact on any credit applications, regardless of whether you settle them in full, partially, or not at all.

Very generally, the longer ago something negative is on your credit file, the smaller impact it tends to have.

There’s no right or wrong answer on how you should deal with your debts, as there are pros and cons. You could leave them and see what happens, but there is the possibility that a creditor or debt collection agency could apply to court for a CCJ, and then use enforcement if you don’t pay. It’s also possible that the creditors do nothing, and after 6 years of no payments or written acknowledgement the debts become statute barred. It's a risk though.

If you can agree full and final settlements it should bring some peace of mind at least. This factsheet gives an overview of full and final settlement advice if you need it:

www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

James
@natdebtline

EssexHebridean

Reading between the lines of your posts, it sounds as though you're looking for the closure that knowing things are settled is going to give you? Is that accurate to say? One way or another you have 2 - 3 years before everything will drop off your file, and I can't imagine you want it hanging over your head for that period of time always feeling like you're looking over your shoulder.

As Mrs Tinks said, get your SOA completed and post it up, and we can take a look at your budget and see if there's anything you're missing/anywhere you can make savings.

The water rates bill, most likely you have proved the "easy one" to find, and all the company who are chasing it are concerned about is getting their money, they're not going to care who from. Are you still in contact with your bill-sharer of that time? In which case it may be worth a simple approach to say that this bill has come out of the woodwork, and they'll need to pay half of it...nothing to lose there, possibly. Do you have anything in writing from your landlord there to confirm that the water rates were included? If so that may be someone else to go after about it, either way that's a heck of a high bill for 18 months! :eek:

sdb1

looking for the closure that knowing things are settled is going to give you? Is that accurate to say? One way or another you have 2 - 3 years before everything will drop off your file, and I can't imagine you want it hanging over your head for that period of time always feeling like you're looking over your shoulder.

NAIL ON THE HEAD!

Basically this. The main question I had was if i was to clear everything quickly or if i was to do it over a period of 3 years, would it make any difference to my file. Its the feeling of being in debt and not having a plan of action in place that is just unsettling, i would much rather know that things are being sorted out, even if it was over a period of time. just would feel much nicer with myself knowing this.

Water bill wise. I have mentioned it to the person i was sharing with, and not much luck there at the moment. (long-ish story) we both actually looked for the agency that rented us the property back then and it isn't even around any more, it was a independent, just one lady, and we were one of her first tenants. I also thought, well know, that its very high for 18 months. It obviously shouldn't be that, but me being how i have the past however, have not looked into it or been in contact to contest (bad, i know) these are the things i am working up to now.

I might be in some luck with it though, because when we moved out of the property, we received a electric/gas bill for £1500 from a company called spark (thats who was providing the flat) this company were chasing for this money for ages. While living there we were paying a flat rate of £150 for gas and electric (75 on each) which at the time we thought was normal and just paid it by DD each month. (not really knowing how much less you can actually have utilities until moving out of that flat) in the end the bill got wiped as a 'mistake' as apparently there was only 1 meter on the whole block. Im wondering if there is or was a issue with the water also.

Really i need to make contact with everything on my credit report. next month is december and i'm sure 3 or 4 of them will come with some christmas settlement offers as they always do.

So am i correct in saying that if i made a 3 year debt free plan it would be the same results if i was to do all this in 1 year?

Again there is no rush for anything, i am not planning on having any mortgage or loans or anything like that it is just the stress being lifted off my shoulders i am really looking for.

enthusiasticsaver

£1500 is a high water bill. Even in the South West with 4 of us in the highest charging area in the country our water bill was only around £600-£700 per year. I cannot imagine that this is correct for just 2 of you. As you say £150 per month for gas and electric is also expensive so maybe it is the same issue and the meter reading was incorrect.

Personally with the other debts you know you are responsible for I would contact them and see how much is outstanding and maybe make some F and F offers when you are in a position to.

MrsTinks

The water bill... do you or the other tenant have ANY emails or letters that state what was included in the bill? You say it was a flat, was it a converted house by any chance where the meters hadn't been converted to individual meters?

If that is the case then I would guess what has happened is that the somewhat shoddy rental company which has since folded not only pocketed your gas/elec money (cheek charging you £150 a month for that in any rate!) but also failed to pay the bills for any utilities...

I wonder if you didn't get any utility bills during that time exactly what address they went to... worth asking the companies for copies of the bills with addresses. State that you are disputing it.

If the bill originally went to Mrs Smith @ Lettings'R'Us then I would inform them that the reason it went to her is that your utilities were included in your rent and fees and the contract between them and her is not your responsibility. Whether that will stand up I don't know but I would think that IF it was in her name it would lend support to your claim that it was included in your rent/fees... Nothing ventured and all that!

Otherwise I would probably request details of exactly when it was accrued and relating to what address. If the address is for YOUR flat only and for the exact period you lived there then I'd ask them to send you an itemized bill. Was it a meter or standing fee (again this is where the type of flat could matter - if it was a set fee (not metered) then if it was a whole building the £1500 could make sense, but if it's just for one flat? ehhhh.... somewhat extortionate )

National_Debtline

sdb1 wrote: »

So am i correct in saying that if i made a 3 year debt free plan it would be the same results if i was to do all this in 1 year?

Again there is no rush for anything, i am not planning on having any mortgage or loans or anything like that it is just the stress being lifted off my shoulders i am really looking for.

A 3 year plan would have the same result as a 1 year plan in terms of dealing with the debts and getting them settled. The only reason someone might want to pay them off more quickly is the possible improvement to credit history and being able to take out more credit. It doesn’t sound like that’s something you're too concerned with at the moment.

The Consumer Council for Water are a useful organisation you can complain to if you have issues with the water company.

www.ccwater.org.uk

James
@natdebline