Trying to work out the best way forwards.

GP1983

Hi,

Originally I posted in another area of this forum however someone recommended I post here.

I'm trying to get my finances sorted out as best I can and I wondered if someone could offer me some advice.

Background - I had a manageable amount of debt (approximately £25,000) which was being paid off on a monthly basis. Due to a business which failed, I was left with no income quite literally overnight and I had around a year without income due to illness. This gave me a lot of problems as you can imagine.

My current debts are:

Tesco (defaulted and is now Robinson Way): £6,849.27 (£20.00 being paid off each month)

Virgin Money (defaulted and is now MDRL): £2,897.41 (£20.00 being paid off each month)

BarclayCard (defaulted): £12,599.00 (This is not being paid off. For some reason they aren't even chasing it)

02 (defaulted and now Lowell): £145.79 (£20.00 being paid off each month)

Family: £6,400 (I'm paying this off at £500.00 a month)

I don't know what other debts I have, but according to checkmyfile:

Yorkshire Water: £234.00 (from a previous address). This is listed as Not Satisfied.

TalkTalk: £272.00 (from a previous address). This is listed as 'Not Reported'.

I also know that NPower are chasing me for approximately £2,500 from a previous address. This is not listed anywhere on my credit file.

I am currently registered to my previous address so I'm not receiving letters for NPower, TalkTalk, Barclaycard or Yorkshire Water.

Once I've finished paying my family off, I will start chipping away at the debts I'm paying £20.00 to. As my pay increased, I will start paying more back.

Is it likely I will ever be considered for credit again in my life time? 2 years has completely ruined me but I am trying to get myself sorted. I have paid off around £12,000 in 11 months, and that is earning £16,000 a year!

1. Is there anything I can do now to improve things for myself?
2. My credit rating is obviously dreadful. I was told to weigh up whether it's worth paying off the likes of BarclayCard, NPower (the debts I have no agreement with) or leaving it for another 4 years, at which point the debt will be written off, unless they give me a CCJ. Can someone offer some advice on this?
3. Can my credit rating improve at all, while I'm paying off debt?

Thank you in advance.

CanadianDream

Just a quick message to say good luck.


Paying back £12,000 in 11 months on a salary of £16,000 a year is incredible. How do you do it?


Will you be posting your SOA?

GP1983

Thank you!

What is a SOA?

I moved home to my parents after it all fell to pieces. I just literally spend nothing. Lost 4 stone in weight, learned to eat healthier and just really learned not to waste any money at all. I've learned a lot, I just need to get this last bit sorted so I can move forward properly.

enthusiasticsaver

Defaults remain on your file for 6 years so you are unlikely to get credit in that time. My suggestion would be you continue current arrangements and maybe offer full and finals when you are in a position to. Paying back £12000 in one year on a salary of £16000 is impressive though.

An soa is a statement of affairs. There is a link on the sticky at the top of the DFW board. Your credit rating is unlikely to improve with those defaults showing especially if they go to ccjs.

GP1983

Thank you.

I'm quite happy not getting any credit (ever again, to be honest!) but I will want a mortgage at some point in my life. This situation has taught me a lot.

I someone decides to take me to court over an unpaid debt, what happens? Will I receive notification in the post that this is what they're doing? (i.e. a letter from the court stating this is what's happened) I'm wondering because I could, at that point, then just offer a payment plan to the company.

OK so 6 years isn't too bad. I understand credit rating is like a 'rolling timeline', so, after 6 years, will my credit rating suddenly improve?

If, after 6 years, I've still got debt which I'm paying back, will this affect my ability to obtain a mortgage?

rockabillygirl

Just wanted to wish you the best of luck with your debt free journey and with moving forward x

enthusiasticsaver

You wont magically get a good credit rating 6 years after the defaults. The defaults will not show on your credit report but a good credit rating has to be built back up again which takes time. No, you generally won't get a mortgage if you have debt or clearing it may be a condition of a lender granting a mortgage to you. Some lenders will allow debt but generally the amount they will lend you is reduced.

National_Debtline

Hi GP1983

Well done on paying such a big amount back in a year, that’s really impressive. You mention you’ve been told to consider not paying some of your debts in the next 4 years in the hope they will be written off but that’s not exactly what happens.

You’re thinking of when a debt becomes statute barred, which means when a creditor has run out of time to use court action to recover a debt. This applies when there has been 6 years (since court action could have been taken) where you have not acknowledged the debt in writing, no payments have been made and no CCJ has been obtained. You need to consider that 4 years is a long time to wait. You could wait 3 years and the claimant could then get a CCJ. It would stay on your credit file for 6 years prolonging the amount of time it takes to improve your credit history, and affect your ability to obtain a mortgage.

Unfortunately no one can give you a definitive answer on what your creditors will decide to do. They would have to send you a letter before court action warning you of their intentions. Once you had received court papers you would get a CCJ unless you could successfully defend the claim or persuade the claimant to withdraw the claim (this is unlikely). If you could pay the full balance of the CCJ within one month of it being made it would not show on your credit file. It’s important to consider all of your options, I agree posting your SOA will be really helpful to get some further advice on your options.

Susie
@natdebtline

EssexHebridean

Further to what Nat debtline have sensibly posted above, there's the psychological aspect to consider too - 4 years of wondering every time an envelope drops through the doors whether it will be a creditor demanding repayment, or notice of impending court action. That's got to be stressful.

GP1983

Thank you. I will post a statement of affairs as suggested.

Thanks for all your advice so far, I'm learning a lot.

GP1983

UPDATE - I am working through my creditors and arranging payment plans.

A couple of them have said they can no longer take payment for the debt and I must contact a company they have employed to do this for them (for example, Advantis, Transcom). Am I right to contact these guys and arrange payment with them directly?