Should I settle a 4 year default?

Flick85

Hi everyone,

I have an default from an overdraft with date of 31 March 2017 in an amount of £2500. Long story short, this was a student overdraft from when I was an undergraduate until 2008 (I think it started with a 0% overdraft of, I think, £1000 though I may have increased that, I can’t remember) which I stupidly ignored and the interest increased on the balance until eventually it hit £2500 and was defaulted and sold onto various debt collectors. 

Part of the issue was that I became a student again in 2009, and continued being a student til 2016 (as I did a masters and PhD after my undergraduate course) so was pretty low income for a while. I can’t remember if I tried to get this overdraft back on a student basis at the time or not, probably not as I was a bit of a useless mess back then tbh. 

I haven’t settled this debt, I ignored the letters and door-stopping debt collectors as I was dealing with mental health issues due to undiagnosed autism, and eventually they stopped bothering me about it 2 years ago. I don’t even know who owns the debt now, so wouldn’t be sure how to repay it even if I wanted to. I’m in a much better position now, I’ve got my sh*t together and although am still in debt through credit cards and a consolidation loan, am doing well at paying these off and will have the credit card balance down to nothing in next year at which point I’ll focus on the loan.

Is the best course of action on the default to hold tight until the 6 years and hope it becomes statute barred? I have a very distinctive name (I am the only person with my surname in the world…) so the chances of me disputing if challenged on that basis are impossible. But, I could potentially dispute based on the fact it was a student account and I was a full time student from 2009 to 2017 though I don’t think I ever tried to prove that to them.

If they did try to challenge me in the next 2 years for repayment, I wouldn’t currently be in a position where I could pay as I’m not saving right now as I’m trying hard to pay down outstanding credit card debt and overdraft as I want to take out a mortgage in next year, if I can. But, I guess absolutely worst case scenario I could put that onto a credit card or take a loan to prevent a CCJ. I know that I am preapproved for a loan at a relatively good rate due to my job, so that is always an option in my back pocket but one I don’t want to take unless necessary.

Thanks in advance, I’d appreciate any advice.

GeordieGeorge

Yes, you should clear the debt and then you can move on without it hanging over you.

[Deleted User]

felicityBD15 said:

 I have a very distinctive name (I am the only person with my surname in the world…) so the chances of me disputing if challenged on that basis are impossible. 

The issue isn't that your name is unique, but that the debt is yours and not someone else's.

The defence of 'the debt must belong to someone else with the same name as me who lives in my house' is traditionally less than convincing. No idea why....!

fatbelly

You've answered your own question, I think

...eventually they stopped bothering me about it 2 years ago. I don’t even know who owns the debt now, so wouldn’t be sure how to repay it even if I wanted to....

...if they did try to challenge me in the next 2 years for repayment, I wouldn’t currently be in a position where I could pay as I’m not saving right now as I’m trying hard to pay down outstanding credit card debt and overdraft 

So you have active non-priority debt, that you're paying, and this old one that no-one has contacted you about for two years and is statute barred in another two years. Don't go digging.

I'd concentrate on clearing the active ones. In the unlikely event of court action (from anyone) there is a long process for them to follow and so post here if you get a pre-action 30 day letter, as that is the start of the process.

As for

...I want to take out a mortgage in next year, if I can...

if it's possible you would be better waiting till all your defaults have dropped off your file.

Flick85

Deleted_User said:

felicityBD15 said:

 I have a very distinctive name (I am the only person with my surname in the world…) so the chances of me disputing if challenged on that basis are impossible. 

The issue isn't that your name is unique, but that the debt is yours and not someone else's.

The defence of 'the debt must belong to someone else with the same name as me who lives in my house' is traditionally less than convincing. No idea why....!

Oh sure, I get that. But, with a unique name it’s going to be impossible to suggest that the debt is someone else’s… and that’s not really true anyway. That’s all I meant there 😊

Flick85

fatbelly said:

You've answered your own question, I think


As for

...I want to take out a mortgage in next year, if I can...

if it's possible you would be better waiting till all your defaults have dropped off your file.

Thanks so much for the reassurance… I’d pretty much reached the same conclusion as you note, but wanted someone else to confirm I wasn’t missing out anything obvious that would be my later downfall! And yup, if I do get one of the letters, I will of course take action somehow and ask for advice, but you’re right… best let sleeping dogs lie until they wake up!

In terms of the mortgage, I agree… ideally I would wait. But, I’m currently renting a property owned by a family member and they have said they’d like to sell up and stop being responsible for my living circumstances in next year, which is completely 100% reasonable. 

If I was to go into normal rented accommodation in my area my rent would increase by a minimum £500 a month as with this property I am just covering fees as the flat is now mortgage free. If my rent is increasing that much, I’d rather i’d put it on a mortgage. Plus, I have 2 cats and renting where I am based right now with pets is impossible.

So buying something myself even if rate will be high for first 2 year fix due to defaults on credit reports makes sense for everyone involved and I will have a healthy gifted deposit to put down when I need to. I’m basically going to spend next 6 months reducing debt balance as much as possible and let market settle a bit and let me settle into a new job, before purchasing something in a nearby town to my current city.

Anyways, thanks again for the reassurance that my plan to ignore the default until/unless it becomes a problem again isn’t completely ridiculous! Much appreciated.

GeordieGeorge

felicityBD15 said:

Deleted_User said:

felicityBD15 said:

 I have a very distinctive name (I am the only person with my surname in the world…) so the chances of me disputing if challenged on that basis are impossible. 

The issue isn't that your name is unique, but that the debt is yours and not someone else's.

The defence of 'the debt must belong to someone else with the same name as me who lives in my house' is traditionally less than convincing. No idea why....!

Oh sure, I get that. But, with a unique name it’s going to be impossible to suggest that the debt is someone else’s… and that’s not really true anyway. That’s all I meant there 😊

Committing fraud is never the right decision.

Flick85

GeordieGeorge said:

felicityBD15 said:

Deleted_User said:

felicityBD15 said:

 I have a very distinctive name (I am the only person with my surname in the world…) so the chances of me disputing if challenged on that basis are impossible. 

The issue isn't that your name is unique, but that the debt is yours and not someone else's.

The defence of 'the debt must belong to someone else with the same name as me who lives in my house' is traditionally less than convincing. No idea why....!

Oh sure, I get that. But, with a unique name it’s going to be impossible to suggest that the debt is someone else’s… and that’s not really true anyway. That’s all I meant there 😊

Committing fraud is never the right decision.

At what point did I say it was?

fatbelly

felicityBD15 said:

fatbelly said:

You've answered your own question, I think


As for

...I want to take out a mortgage in next year, if I can...

if it's possible you would be better waiting till all your defaults have dropped off your file.

Thanks so much for the reassurance… 

 Much appreciated.

No probs.

A couple of old defaults on your file isn't ideal but get yourself a good broker and you should get some sort of offer - just maybe not the ultimate best.

Keep looking after yourself and remember we're always here if something odd happens.

I have some experience with autism and it's no surprise that it took you a long time to get diagnosed. A friend of mine was similar and had learned so many coping techniques that it was difficult to get the diagnosis. There are some good aspects - she is very reliable, very accurate in her work and always gives me a straight and honest answer to a question!

sourcrates

It makes no difference if you recognise the debt or not, if someone chases you for payment, they must be able to provide evidence of your liability for that debt, when challenged.

Its not what you know, its what you can prove, this provides us a route so that we cannot have any old debt thrust upon us, and told we must pay it.

For the avoidance of doubt, a debt collector/creditor whoever it may be, must be able to show they have the legal right to ask for this money.

For a loan or credit card, they must provide copies of agreements/statements etc, for old bank accounts, statements would be acceptable, they must evidence that the debt they have actually belongs to the debtor, and they can prove as much.

Those who don`t ask for proof, (and who ignored correspondence) tend to end up with a CCJ by default, as the collector has not had to provide evidence.

Fatbelly`s post above, tells you all you need to know.