Best way out of debt

justnotheralias

Hi all,

Got myself into a rather sticky situation about two years ago - had run huge debts on my credit cards up, and taken advantage of numerous bank loans and overdrafts that seem par for the course of being a student these days.

Went to see CAB and they were really helpful in providing a debt reschedulement plan. However Barclays offered for a cancellation of two thirds of my debt, which I was able to raise - knocked three and a half thousand off of the total.

Since then have managed to negotiate other amounts of the total sum, and am now down to three creditors, and owe a total of four and a half thousand pound. I owe two thousand pound to one group, and believe I can negotiate this down to around £1200.

However my question is - is it worth paying off the full amount if I can wrt my credit scoring - how will reaching a negotiated settlement affect it? I mean it would be money saving in the short term, but I'm in my late twenties now and would like to get a mortgage in the not too distant future.....

Thanks

anon

margaretclare

Is there any reason why you can't pay off the £4 1/2 K with a bit of effort and within a reasonable time? You seem to be saying that you owe these sums but you'd prefer not to have to pay them all off, just because you want to get a mortgage. Why think about getting a mortgage when you're in debt - why not take the advice freely available on Martin's site, and get out of debt once and for all?

Also, to get a mortgage you'll need some kind of a deposit, there are all the other charges - searches, surveys, conveyancing etc - so it would be a good idea to get into the mindset of saving and having a little bit behind you, rather than banking on 'negotiated settlements' all the time.

Aunty Margaret

jonesMUFCforever

The OP also seems to think that because he has 'paid off' the debts they somehow disappear off his credit file?
They will still be there for at least 6 years and show that he only paid off partial debt.

I think that obtaining a mortgage at standard rates will be almost impossible given the info that he has given us.However there are always lenders willing to lend on property if you don't mind paying through the nose: but beware of trying this trick with secured lending - you will end up losing the property!

Eric