Spanner in the mortgage works.

never_go_back

Hi all,

I'm just in the process of buying a house and I woke up this morning to find a letter from a debt recovery agency asking for over £1,000 which I can't afford to pay.

I accept I owe this money and will pay it back but I'm worried about how it will effect my house going through.

Basically I got in a lot of debt when I was in my early 20s. Later, when I decided to buy a house with my ex I checked my credit report, paid all my defaults, and the got a morgage no problem with him.

Unfortuanately the relationship became abusive and I had to leave.

Since then I've found a new place, got an agreement in principle for a mortgage on my own, but have decided to start a fresh application with a new company and better rate.

Solicitors have been instructed and the survey has been completed but now I've got an this extra debt and my credit was never whiter than white in the first place.

This debt is almost 10 years old and like I said I will pay it but I am worried that it will show up as a fresh default on my credit file and stop my mortage going through.

I can manage maybe £100 a month but will paying back at that rate make my credit file look better or worse.

I feel like they have waited until I tried to move on with my life before they sent this bill out and if only it landed 6 months ago, or even 3 months ago, I could have delt with it, but now everything is in the air again.

I suppose if it does stop my mortgage going through I can always pay it off out of my deposit! Arrggghhhhhh.

Thank you for reading.

NGB x

m00m00

if it's over 10 years old, it will probably have NO impact on your current credit rating unless a CCJ was gained for the debt

if you have not acknowledged this debt in the past 6 years it will be statute barred, and unenforceable

at a guess the demand came from McKenzie Hall.

never_go_back

It's from 1st Credit Ltd.

Although the debt it refers to is almost 10 years old I couldn't say how old the default is and when I last spoke to them.

guppy

never_go_back wrote: »

Although the debt it refers to is almost 10 years old I couldn't say how old the default is and when I last spoke to them.

Let them provide this information then?

PasturesNew

What sort of debt is it?
Borrowed money? Unpaid bill for utilities?

never_go_back

Borrowed money. They are acting on behalf First Direct.

NGBx

SquatNow

Seriously... if you have outstanding debts and can only afford to pay them down at £100 a month, are you really in a good position to buy a house...?

It sounds like your going to be living hand-to-mouth. This means even a small interest rate rise would wipe you out.

In addition to all that, your buying an overvalued asset at the peak of a bubble. You need to reconsider your entire situation completely.

BobProperty

Post the details on the Debt Free Wannabe board. I'm sure the rules are 6 years in which to chase the debt, unless it was a secured loan (in which case it's 12 years). If you haven't heard from anyone for over 6 years then I suspect this is a debt collection company trying their luck to blag something out of you.

never_go_back

SquatNow wrote: »

Seriously... if you have outstanding debts and can only afford to pay them down at £100 a month, are you really in a good position to buy a house...?

It sounds like your going to be living hand-to-mouth. This means even a small interest rate rise would wipe you out.

In addition to all that, your buying an overvalued asset at the peak of a bubble. You need to reconsider your entire situation completely.

I accept what you are saying Squat Now but £100 is all I can manage these last few months running up to Christmas IF my fixed rate mortgage goes through AND I actually decide to buy a house for me and my children.

As I said in original post if it came just 3 months earlier I could have dismissed fairly easily.

To the best of my knowledge I didn't have this debt two years ago when I checked my credit report or even a few months ago when I was dipped by my broker.

My concern is what affect this 'new' debt will have on my mortgage application.

never_go_back

SquatNow wrote: »

Seriously... if you have outstanding debts and can only afford to pay them down at £100 a month, are you really in a good position to buy a house...?

It sounds like your going to be living hand-to-mouth. This means even a small interest rate rise would wipe you out.

In addition to all that, your buying an overvalued asset at the peak of a bubble. You need to reconsider your entire situation completely.

I accept what you are saying Squat Now but £100 is all I can manage these last few months running up to Christmas IF my fixed rate mortgage goes through AND I actually decide to buy a house for me and my children.

As I said in my original post if the bill came just 3 months earlier I could have discharged it fairly easily just as I might in another 3 months.

To the best of my knowledge I didn't have this debt two years ago when I checked my credit report or even a few months ago when I was dipped by my broker.

My concern is what affect this 'new' debt will have on my mortgage application.

poppy10_2

Make sure you don't acknowledge that you owe them anything. If it was a standard unsecured loan, it is statute-barred now that more than 7 years have elapsed, so you owe them nothing. Post on the Debt Free Wannabe board for more details.