Debt advice please

JTaylor82

Hi just after a bit of advice regarding my debts. In quite a bit of debt  been like this for over 5 years or so.
My debts are quite large  39500 total.
I have had a plan in my head regarding these debts for some time now but i just want to make sure we are doing the right thing.

JTaylor82

In the last 5 years  we have completely changed are ways in terms of budgeting as i and my partner was really out of control with spending. 

For the past 5 year we have paid our  5 creditors  £10 each  only 2 got sold on  all defaulted over 5 years ago.  I have managed to save 25k over this time some of it I inherited.

We want to buy a house in the next year  when my credit file is clean.
Would  continuing as i am for a couple years with the small payments and  go in a iva in a few years time  be an option
any advice would be great. 

Cheers

sourcrates

If you were very lucky, and very canny, you could possibly partially settle that 40k of debt with the 25k you have saved.

JTaylor82

Hi i did think about it but it means it would almost certain mean i cant buy a house. If was younger  100%. But if i do this it would set me back another 5 years  and houses are so expensive especially  with a small deposit. After years n years off high private rent im desperate  to have a stable own home for family.

Maybe im looking at it all wrong
unsure.

MrFrugalFever

I am uncertain as to how it is possible for your credit file to be ‘clean’ next year when you haven’t paid your debts off. These defaults stay on your credit file for 6 years and if you have just made token gestures then the debt will still be showing. 

If entering an IVA or going bankrupt you will have to put that £25k in to the agreement.

i think you’ll need to clear your debt first and wait 6 years til your credit file is clear before you can even consider a mortgage?

JTaylor82

My defaults are over 5 years old so 8months they will be off my file

Sncjw

JTaylor82 said:

My defaults are over 5 years old so 8months they will be off my file

They will if you hadn't paid for the 5 years. Because you have been paying 10.quid a month your acknowledging the debt so it doesn't become statues barred.

Also if you are looking at a house they will take your debt into consideration and possibly take off the full debt amount off what they would loan you for a house so you may need to look for houses under what you were going to get.

Although I didn't have debt I bought a house with my partner way under the max of what they would offer me. 

JTaylor82

Yea but the mortgage lender wont know will they as it will be off my credit file

JTaylor82

I maybe wrong thou  not sure tbh

Sncjw

They won't be off your file as your still paying for them. You still acknowledging the debt so it will stay on your file. 

JTaylor82

Ahhhh  didnt no that 
god knows now