PayPlan DMP needs to GO!!!!

sourcrates

Rjhsteel wrote: »

So its best to pay it off then, otherwise it could stay on the credit report.

Paying it will not remove a default, only time will remove it.

Rjhsteel

sourcrates wrote: »

Paying it will not remove a default, only time will remove it.

i understand that, but if the debt is "written off" does that stay on the file, even after 6 years?

sourcrates

Ok, are any or all of your accounts already defaulted ?

Rjhsteel

Back in 2014 was the last default

sourcrates

Rjhsteel wrote: »

Back in 2014 was the last default

So six years from default date, the entries will be gone regardless of ANYTHING you may do.

Rjhsteel

What i'm saying is, when a company writes off a debt, is that the same as paying it off....will that be extinguished from the file after 6 years?

January2015

Rjhsteel wrote: »

What i'm saying is, when a company writes off a debt, is that the same as paying it off....will that be extinguished from the file after 6 years?

From the point an account is closed/settled/defaulted (take your pick), the account information will remain on credit reference file for 6 years. So if account already defaulted back in 2014, regardless of what you do now in terms of settlement, it will disappear from your credit file sometime in 2020 (2014 + 6 years). It doesn't matter what you do now to that debt, e.g. settle, pay monthly etc., that debt will disappear from credit file in 6 years even if you haven't finished paying it off. A default registered on the credit file is like a magic time marker - that's the clock starting to 6 years for information on that debt and then after that - no more!

If any of your accounts are not yet defaulted and you make settlement agreements with any creditor or debt collection agency, then your account will be marked as settled (or partially settled if that is the case). This information will remain on the file for 6 years from date of settlement.

Rjhsteel

So, if i pay it off, or its written off, that will have the same effect on my credit file. Just checking as i want to make sure my credit rating will be the best it can be after the event.

MrsTinks

It may have a slightly less negative effect, I do think however you would be better off speaking to an independent mortgage adviser about your options, they will know better than us what lenders at the moment are likely to offer and how much of a difference it might make to your offers if you settle your DMP. Do however be aware that you are going to be stuck with the defaults on your credit file for some time to come.

January2015

Rjhsteel wrote: »

So, if i pay it off, or its written off, that will have the same effect on my credit file. Just checking as i want to make sure my credit rating will be the best it can be after the event.

I thought I had answered that in my last response.

As you are on a DMP already - your credit file is currently trashed.

If an account is already defaulted - clock has started ticking from date of default and info on that account will disappear from your credit file 6 years after date of default.

If you pay an account it in full, information will remain on the file for 6 years from date of settlement so any new searches of your credit file will show previous 6 years history, including any late payment/agreement to pay information etc.

If you pay it off in by making partial payment, i.e. agreeing to settle an account for less than the outstanding balance owed, and this is done with the written agreement of creditor or DCA) this information will remain on the file for 6 years from date of settlement. So again, the history of any late payment and agreement to pay will remain on the file for 6 years from the date of settlement.

Does that make more sense?

In my opinion, as you have already been on a DMP, it makes more sense to negotiate settlement figures if you can rather than pay off debts in full because your credit file is trashed anyway. I can't see any win over paying off accounts in full now - I think the impact to your credit file will be the same regardless.

All that said, we recently were fortunate enough to come into a fairly nice sum of money which would have cleared our debts if we could have settled at 35%. Not one of our creditors was willing to negotiate below 70% (and only one was willing to go that low). Now that's probably down to the fact that we have only been on DMP 2 years and had been paying a reasonable amount each month. Creditors rarely settle at much below the outstanding balance. DCAs settle for less but even they will hold out for higher percentages if they have been, and will continue to get, monthly payments towards debts.