What should i do about my debts?

clueless_wonder

Here's the lowdown - 

Back in 2017 i decided to stop paying my loans, credit card and overdraft and let them all go into in default. I had a gambling addiction and couldn't afford the monthly repayments on them because i was throwing all my money away on roulette. Fast-forward to today - Gamble free for 3 years and trying to get my life back together!

Here's the question though -- What should i do about these debts??

CCJ - 9,291

Overdraft - 5,632

Credit Card - 2,249

Loan - 7,169

Payday loan - 632

Payday loan - 528

None of them have been paid since 2017 and i haven't made any contact with them. Do i keep avoiding them until 6 years has passed or do i make contact with them and try to arrange some kind of payment plan?

Me and my partner want to buy a house next year, we both know that with my awful credit history its going to be really hard for it to be a joint mortgage.

Help and advice please!

Thankyou

EssexHebridean

Congratulations on your three years clear of gambling - that is a real milestone!

You're unlikely to get any sort of sensible mortgage deal currently with those on your record, I'm afraid. Even clearing them down now there will still be a footprint left - particularly from the payday loans - which will impact what rate you're going to get and even who will lend to you. Are you in a position to make any impact on clearing them? That is also a very relevant question as if you're not them your hands are pretty tied!

Whether you just leave them to drop off by following the "non acknowledgement" route is a question only you can answer. Some folk are absolutely fine doing this - while others know that in the back of their minds there will always be some guilt hanging over them about it. If that second type of person is you, then you  need to evaluate whether it will impact your peace of mind to too much of an extent in the longer term, or not. No judgement, but something to be aware of. 

With the house purchase thing, bear in mind if it's not a joint mortgage, it's very possible that the house will also need to be solely in your wife's name with you simply an occupier - a lot of mortgage companies will insist on that. 

If I were in your position, I'd put the house purchase on the back burner for another year at least, and then look to clear down the debts one at a time - with the overdraft being the first thing to attack. That will at least get the accounts marked as settled which will help a little on the mortgage front. There may also be a chance of going after the payday lenders for irresponsible lending, although you'd need to look into that one a little more - that ship may have sailed.