Repay Defaulted loan in full or pay settlement?

massop

Hi there.

I had a huge Natwest Black card debt from around 2009 (£20k ish)

I had a successful business that went bust and was only able to afford to pay back £100 per month as I was on jobseekers allowance then had very low paying jobs for the next 5 years or so.

Anyway fast forward to today and there is £6.6k outstanding and I am still paying the £100 per month.

I have a new business and am in the position to clear this balance but I was made an offer by Natwest (Wescot are now dealing with me) for a settlement of £5.3k.

If I pay the settlement it means on my credit file it will show as "Partially satisfied" for 6 years from June 2016, which means I will have this on my record for 3 more years.

I wanted to apply for a mortgage next year so my question to you is, shall I pay the full amount or save myself £1k and go for the settlement? Will a partial settlement hurt my mortgage application?

What are the pros & cons?

Thanks in advance

[Deleted User]

Has the account defaulted? If so when? 2016 sounds late.

To be honest, once you've broken the agreement, getting it satisfied is the important thing. I would take the offer, but make sure you use a broker for your mortgage.

massop

Thanks for the quick response

When I spoke to the lady on the phone (Wescot) She said if I paid the settlement amount (Not full amount) it would show on my credit history 6 years from June 2016 which I though was odd.

Maybe this was when Natwest transferred the debt to Wescot?

[Deleted User]

Check your credit files - it will fall off 6 years from default, regardless of payment.

sourcrates

massop wrote: »

Thanks for the quick response

When I spoke to the lady on the phone (Wescot) She said if I paid the settlement amount (Not full amount) it would show on my credit history 6 years from June 2016 which I though was odd.

Never listen to lady on phone at wescot, its likley this debt should have been defaulted much sooner than it actually was, as a rule of thumb, guidence states an account can be defaulted after between 3/6 missed contractual payments, so depending when in 2009 you got into trouble, date of default should be late 2009, early 2010.

If you want to pursue this, then a letter of complaint should be sent to the original creditor, and be prepared to escalate to the ICO if they won`t play ball.


After this length of time, it should not really still be showing on your file at all.