Forcing defaults to make settlement offers

sjx1407

Hi Skintandfat (love the name btw...)

Thank you for sharing you story - I've read all with interest.

It has raised a couple more questions though if you would?

I do plan on writing a full letter to the three creditors with a full and open SOA and will make a F&F there and then (my family would help with this).

First question. Do I stop all payments and then wait for the default to be marked on my credit file before offering the £1 payments?

2nd question. What purpose do the £1 payments serve?

3rd questii. Assuming each paymemt

sjx1407

Sorry, hit the post button there.

3rd question. Assuming the £1 serve as acknowledgement. Am I right in thinking the debt could effectively last forever? But the default can only affect my score for 6 years after the date?

For example, could a creditor take me to court in 8 years assuming I haven't managed to reach an agreement?

Final quesion.is an overdraft in any way different to a credit card? Since there is no minimum payment as such, at what point does it default?

Thanks again everyone for all your input. It is totally invaluable and I appreciate all your time.

sourcrates

Hi, we move threads if we think they’ll get more help elsewhere (please read the forum rules) so this post/thread has been moved to a new thread. If you have any questions about this policy please email forumteam@moneysavingexpert.com.

sjx1407

No problem.

If anyone can answer any of the above questions, I'd be eternally grateful!

My new bank account has now been approved, so looking to default and write to creditors in the next week or two.

Any advice prior to this would be invaluable!

Thanks again!

National_Debtline

Hi

I haven’t seen the other thread you’re referring to but I’ll try to answer your questions.

If a creditor thinks you can afford the on going contractual payments they’re less likely to accept a full and final settlement. The idea of defaulting and offering token payments is to demonstrate to the creditor that you’re actually struggling to afford everything. Normally you would offer the token payment in a negotiation process as a good will gesture if you can’t afford to pay anything more. You would just offer it when the next payment is due, and by not meeting the minimum contractual payments the creditor will default you within several months usually.

The £1 payments would count as acknowledgement from the perspective of debts becoming statute barred. The default and the entire record of the debt will drop off your credit reference file 6 years after the default date, but you’ll still owe the debt until it’s paid off. In theory a creditor could take court action years later if you had been paying £1 per month for the entire time.

Overdraft defaults are different to debts with regular contractual payments. An overdraft defaults when the bank formally asks you to repay the full balance of the debt.

I hope that helps.

James
@natdebtline

McKneff

If a thread has to be moved , why can the person who moves it, and informs us that it's moved, actually say where they have moved it to. It's very frustrating.

sourcrates

McKneff wrote: »

If a thread has to be moved , why can the person who moves it, and informs us that it's moved, actually say where they have moved it to. It's very frustrating.

The OP "SJX1407" tagged there post onto the end of an old thread, where the original poster had not been back to update in 18 months.

Rather than let the post go without any responses, I thought it best to move it to a new thread.

Sorry if this has caused confusion, but the OP's questions are pretty standard stuff.

(It is, after all, only my second week as a board guide)

blisteringblue

sjx1407 wrote: »

My new bank account has now been approved, so looking to default and write to creditors in the next week or two.

Simply not going to happen. You stop paying for between 4-6 months to get the default and then wait for it to be passed on or even sold to another company.

It's at the sold stage you will make good F&F settlements, but if you are up to date with your payments now even just the minimums you are 18 months plus off getting to good F&F territory.

Your best bet is stop paying now, save the money for the F&Fs when it gets to that point, but it won't be anytime soon.

If the debt is still with the original creditor expect little if no offer as an F&F.