Payment plan with Debt Recoveries

brendon22uk

Hi all,

I have a £820 balance to clear with MMF debt recoveries after receiving the first letter from them a week ago.

This debt was originally from a payday i took out in 2014 which states 'settled' on all my credit files but the original debt was never cleared.

Im looking to apply for a mortgage next year.

May question is, hows best to approach payment terms with a debt collector without affecting my credit file? Im not in a position to clear the full amount right away and therefore thinking a payment plan.

Does anyone know if arranging a payment plan with debt collector will make my credit files get updated to 'AR' (arrangement plan) or similar?

Kinda hoping its more discreet and i can clear this off in 4 months with the credit file still stating settled 2014 rather then 'AR' mar/apr 2017, which may affect mortgage terms?

Many thanks for your help.

[Deleted User]

Has the account been defaulted?

StopIt

So nobody has registered a default? Well, that's different.


Remember MMF can register this as defaulted, but they'll have to date it from the point that the relationship with the lender broken down, so 2014. If they do, then you're in a spot of bother, but with PDLs on your credit file, I'd be speaking to a broker who specialises in adverse credit.


Also, are you expecting a lump sum to get a mortgage? If not surely you're saving for a deposit and if so, should use that funding to clear this ASAP before MMF can get nasty and register that default.

MEM62

I would contact MMF and make an arrangement to clear the debt that you are comfortable with and can that is realistically affordable. A settled debt will always look better on your history.

The fact that you do not have the means to clear an £820 debt without an arrangement suggests that you have no savings. With no deposit a mortgage next year is unlikely. Concentrate on clearing this debt and then look to saving a deposit and I am sure that you will get there in the end.

PixelPound

Wanting to know if it gets updated to "AR" sounds like your main motivation is to make it look better on your mortgage application. This would only be if the default was registered for it as outstanding. If no default has been registered by MMF, get an agreeable plan now.

If you are unable to clear the balance because of a lack of savings, the as MEM62 says, you are probably not in a position to get a mortgage yet. If you are wanting a PP as you don't want to touch your deposit savings, then think again, as paying this off before you apply will look better since they may query the regular monthly payments going out to a debt collector in your bank statements. Its better to pay now and then spend 6 months rebuilding the deposit as it will also mean cleaner bank statements.