Settlement advice appreciated

201erMike

I would really appreciate some advice on debt clearance, consolidation etc.

Brief scenario. My partner & I run a business together, managed to rack up around £110k of various credit card debts - a mix of personal, and some business - maybe £20k business.

Around 4 years ago one desperate day I picked up the phone to the National Debt Line and they guided me on the way to come to an agreement with all debtors for £1 repayment. I did this via letters to all credit card companies. 4 years later we have around £80k debt left - we made a couple of large repayments when we sold a property.

The debts are now split between Link, Akinika, Robinson Way and Westcot.

We aren't really in a position to start paying more off - although I agreed to £25 a month with Akinika.

We own two properties in London - probably £650k equity in them together - and know we are lucky to have these. We are however looking to move out of town soon and sell the properties. We currently live in one flat and get rental income from the other. We run a business together and can generally only draw around £1,000 a month.

We have never had a formal debt arrangement put in place, informal agreements have worked ok - and the collection agencies have generally been ok with us.

I am trying to understand the implications of settling debts. Does it mean no more mortgages etc forever? I'm concerned if we sell our London property and clear the credit debts with some of the funds we won't be able to then get another mortgage.I have no interest in owning credit cards again - unless using one and repaying every month could help with the credit rating.

Should we just try settle for as little as possible to keep our equity? Or does this affect our credit rating too much. Our rating is probably shot to pieces but if at all possible I would like to try and repair it.

Any advice on settling/not settling much appreciated.

Thank you.

sourcrates

Hi,

Credit files are only affected for 6 years, defaults etc drop off your file after this time period.
No one gets affected by debt forever.

Do what your most comfortable with, your credit file should be your last Concern to be honest, if you can settle for a good deal less than is owed, then do so.

Make sure everything is in writing though.

There are numerous threads on the forum about settlements, have a search around.

National_Debtline

Hi

If you partially settle a debt it will show the default as partially satisfied on your credit file. It might not be as good as paying off in full for some potential mortgage lenders, but probably better than an unpaid default.

As soucrates says though, the defaulted accounts will come off your credit files completely 6 years after the original default date. At that point they will no longer have a negative impact of credit applications, regardless of how you settle them.

James
@natdebtline