CCJ & Defaults about to pass 6 years/expire. Is it worth paying them off?

Higher

Hi all,

After many years of financial instability due personal issues I ended up with a number of defaults and a CCJ. I wasn't in a position to pay these off previously and they have pretty much all just been ignored other than the CCJ which I make a small token payment to each month to keep them off my back.

I am now in a position where I could pay all of these debts off but I am wondering if it is even worth doing. The majority of the defaults pass 6 years/expire within the next 6 months. If I pay them off is that going to benefit my credit file in any way or would it make no difference once the 6 years is up?

The CCJ still has a few more years until it drops off my credit file but again is it worth me paying it off seeing as they currently seem happy with the small amount I pay each month?

I know really it would be ideal and fair if I payed off everything I owe but at this stage after finally getting my finances in order, if paying the debts off isn't going to change my credit score then is there any point.

I have spoken to step change debt charity or also check my file. Neither could really give a straight answer to my questions and were unsure whether even after the 6 years / expiration of my debts, that possibly they could still be affecting my credit score in the background due to them not being settled.

Willing2Learn

Hi,

Definitely, you should continue paying your CCJ, as the creditor could still seek enforcement options should you stop paying.

With the other debts, can you list them, stating the default date for each account, and when the last payment was made to each account.

Basically, I am wondering if any of the accounts are statute barred.

Unsecured debts, including most loans, credit cards, catalogues and overdrafts will normally be statute-barred in England and Wales if you can say YES to all the following four points:

• it had been more than six years since you last made a payment; and
• the creditor has a cause of action more than six years ago; and
• you haven’t acknowledged the debt in writing during this time; and
• the creditor hasn’t already gone to court for a CCJ.

Just to add, that the 'cause of action' would be the date of default for each account.

[Deleted User]

It’s up to you.

Either pay off in full now if you can or continue with the token payments.

Just don’t stop paying on any occasion even when they drop off your credit files.

sourcrates

A county court judgement never becomes statute barred, but, after six years has passed, if a creditor wanted to further enforce the judgement, they would need to ask the courts permision to do so, this may, or may not be granted, depending on the circumstances, so non payment may still trigger further action.

fatbelly

Higher wrote: »

I have spoken to step change debt charity or also check my file. Neither could really give a straight answer to my questions and were unsure whether even after the 6 years / expiration of my debts, that possibly they could still be affecting my credit score in the background due to them not being settled.

Looks like you're getting better advice on this site than from Stepchange, then.

For your normal entries, the entry disappears six years after being defaulted or settled, whichever happens first. They do not come back and so do not affect credit rating (score is meaningless).

For ccj entries they stay for six years from judgement.

Under England/Wales law, nothing expires, though debts may become unenforceable as posters above have explained.

Higher

Thank you all for your responses.

I do not think any of the debts are statue barred just yet. Seeing as the defaults have not reached six years.

I wasn't suggesting I'd stop paying the CCJ, I was just wondering if there was any point in me clearing the debt before the 6 years is up. If I carry on paying the monthly token payments, the CCJ would be nowhere near payed off when it reaches 6 years. But it sounds as though there's no benefit to me paying it off early anyway? With a CCJ is there any scope for getting it payed off as a reduced settlement?

Regarding the defaults, it sounds as if there is no benefit to paying them off if they are going to drop off after 6 years anyway so I'll just let leave those. I've just heard conflicting information that if not payed there still may be something showing on my credit files even after the 6 years has passed?

What's the difference between credit rating and credit score fatbelly?

boo_star

Higher wrote: »

Thank you all for your responses.

I do not think any of the debts are statue barred just yet. Seeing as the defaults have not reached six years.

I wasn't suggesting I'd stop paying the CCJ, I was just wondering if there was any point in me clearing the debt before the 6 years is up. If I carry on paying the monthly token payments, the CCJ would be nowhere near payed off when it reaches 6 years. But it sounds as though there's no benefit to me paying it off early anyway? With a CCJ is there any scope for getting it payed off as a reduced settlement?

Regarding the defaults, it sounds as if there is no benefit to paying them off if they are going to drop off after 6 years anyway so I'll just let leave those. I've just heard conflicting information that if not payed there still may be something showing on my credit files even after the 6 years has passed?

What's the difference between credit rating and credit score fatbelly?

There's no reason to pay it off early other than it being "the right thing to do."

This is especially true when the debt will fall off your files anyway.

[Deleted User]

You need to pay the defaulted debts because

A. You owe the money

B. They could go for a CCJ on the defaults before the 6 years are up

Pay you debts and stop looking for ways out of them.

Regarding credit score and ratings - neither are “real” - at least not the ones generated by the CRA’s.

Lenders will use their own internal scoring/rating system, which is commercially sensitive and not privy to the public.

Willing2Learn

Higher wrote: »

...Regarding the defaults, it sounds as if there is no benefit to paying them off if they are going to drop off after 6 years anyway so I'll just let leave those. I've just heard conflicting information that if not payed there still may be something showing on my credit files even after the 6 years has passed?

What's the difference between credit rating and credit score fatbelly?

Defaulted accounts are automatically removed from your credit file(s) six years after the date of default, regardless of whether or not the account has been settled.

Your credit score can be safely ignored as lenders neither use it nor see it. Lenders score you against their independent criteria and policies using the data held in your file, added to the data you submit in a credit application, added to the data they may already hold on you as an existing or returning customer.

fatbelly

Higher wrote: »

With a CCJ is there any scope for getting it payed off as a reduced settlement?

Regarding the defaults, it sounds as if there is no benefit to paying them off if they are going to drop off after 6 years anyway so I'll just let leave those. I've just heard conflicting information that if not payed there still may be something showing on my credit files even after the 6 years has passed?

What's the difference between credit rating and credit score fatbelly?

Although it sounds counter-intuitive, you may find a creditor will accept a full & final settlement on a ccj. If there is no way to effectively enforce the ccj, and monthly payments will take many years to clear the debt, then they will deal.

The default entriess won't affect your credit file at all after 6 years and Gary explains the difference between a 'rating' and a 'score'.

There is a risk that the default creditors may start a court claim before the 6 years is up but in your position (6 months left) I'd keep my head down and if any of them do send a pre-action protocol letter, post on the debt free wannabe forum for advice.

PRAISETHESUN

Higher wrote: »

Thank you all for your responses.

I do not think any of the debts are statue barred just yet. Seeing as the defaults have not reached six years.

I wasn't suggesting I'd stop paying the CCJ, I was just wondering if there was any point in me clearing the debt before the 6 years is up. If I carry on paying the monthly token payments, the CCJ would be nowhere near payed off when it reaches 6 years. But it sounds as though there's no benefit to me paying it off early anyway? With a CCJ is there any scope for getting it payed off as a reduced settlement?

Regarding the defaults, it sounds as if there is no benefit to paying them off if they are going to drop off after 6 years anyway so I'll just let leave those. I've just heard conflicting information that if not payed there still may be something showing on my credit files even after the 6 years has passed?

What's the difference between credit rating and credit score fatbelly?

There's no difference between a credit "rating" or "score" - what you really want to ask is the difference between "rating/score" and "history".

Your credit history is the contents of your credit files dating back over the last 6 years. This is what lenders look at when you make an application. They do not see the "score/rating" numbers provided by any of the CRAs - in fact no-one except for you does, which is why they are meaningless and should be taken with a grain of salt.

As for the debts, it may be worthwhile writing to the CCJ-lender and asking for a final settlement, to see what they might accept. For the others, be careful as writing to them in this way this will most likely reset the 6 year timer since you would be "acknowledging" the debt as stated above.