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Angbunny
Angbunny Posts: 13 Forumite
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edited 18 May 2022 at 4:53PM in Debt-free wannabe
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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    edited 17 May 2022 at 3:45PM
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    You'll be put on an arrangement, which will be a big negative on your file.  Unless you think that it will be very short term - eg a month of two - you'd be better off defaulting.

    That will also stop any further interest.

    But first do an SoA here, to see if you have other options.


  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    It means you default on the arrangement. You can then make arrangements to repay and interest is frozen.

    The account will remain on your files for six years from default, whereas an arrangement stays on your files for 6 years from the when the account is settled (or from when you come off the arrangement).
  • Sncjw
    Sncjw Posts: 3,516 Forumite
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    Maybe we could look at your soa see where you could save money to prevent deafualtinf 
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • flipflopflo
    flipflopflo Posts: 485 Forumite
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    Defaulting is not paying the debt. So that when the creditors report to the credit reference agencies they report a default of payment. Then once the debt has defaulted you contact the creditors and ask to make reduced payments. The default drops off your file six years after the default. 

    As said if you make an arrangement to pay with the creditors it is on your file while you have an AtoP and then a further six after you finish paying. 
  • sourcrates
    sourcrates Posts: 29,212 Ambassador
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    edited 17 May 2022 at 6:46PM
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    Yes its a non essential debt, and you can`t afford it, you should stop paying all your non essential debts for the time being, and then take stock of your situation.

    You will have to endure collection activity, as they call it, phone calls, letters etc, I suggest you block there phone numbers, and write to your creditors informing them of your change of circumstances, explain you need time to arrange a strategy for repaying your debts, and that you will be in touch in due course.

    Once that is done, allow your agreements to default, you say this will be a long term thing, so a version of a debt management plan will most likely suite you best, but don`t rush into anything just yet, try and save some money over the next few months into an emergency fund, keep tabs on who is writing to you, then when your ready, you can make affordable arrangements with them.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
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