How best to proceed - 6 defaults from 2019

markmm

Good afternoon,

I have checked the 3 credit ref agencies (Equifax, Experian, Transunion) and gathered all the information about my defaults (6 in total).

The default dates are all in latter half of 2019 the total is around £56k when I ran into financial issues and buried my head in the sand. They are all unsecured debts (loans, CC).

 I also have a mortgage and have been able to renew it every two years without them doing a credit check and have never missed a payment.  I also have never missed any other payments such as car finance bill setc.

I initially set up payments to the various defaults but after a few months stopped paying.  My initial plan was as I live in Scotland they become Statute barred after 5 years so in two years they will no longer be actionable and then a year later they will drop off my file.  However I now think it's better to start paying them off as it will stop any potential CCJ's and will feel better about paying them off (can't afford to pay it off in one go though).

I know by contacting the DCA/Banks and acknowledging the debts it will reset the clock on my getting them SB'ed.  

What would you suggest the best approach is, assuming I would like to change mortgages in a few years?

Thanks in Advance

markmm

Follow up question, when the defaults drop off the credit file but you are still paying them off in installments does the record of the debt still dissapear?

sourcrates

Are you not being contacted about these debts ?

56k surely you must be.

Defaults stay on file for 6 years in Scotland, as in the rest of the UK, once the entry drops off your file, its gone completely, and for good.

However if a balance remains to be paid on any of those accounts, it is still enforceable, yes.

sleepyjones

I can understand @sourcrates reply but as to the question "How best to proceed" ... You need to restart paying the defaults, get in contact with those creditors and work out a plan to pay it back.
I don't know how mortgage renewals work / whether they credit check or not but If any of those creditors decide to get a CCJ on you I'm pretty sure the mortgage people will notice it.

markmm

sleepyjones said:

I can understand @sourcrates reply but as to the question "How best to proceed" ... You need to restart paying the defaults, get in contact with those creditors and work out a plan to pay it back.
I don't know how mortgage renewals work / whether they credit check or not but If any of those creditors decide to get a CCJ on you I'm pretty sure the mortgage people will notice it.

Thanks sleepyjones,

I have 2 years left until they are statute barred (I'm in Scotland) so if I hold off and they don't go for CCJ then the debts are wiped.  Also if one or more decide to go for a CCJ surely they have to warn me first and at that point I can make a F&F offer to avoid the CCJ?  All the creditors have my latest address (from when I was paying them initially).  

markmm

sleepyjones said:

I can understand @sourcrates reply but as to the question "How best to proceed" ... You need to restart paying the defaults, get in contact with those creditors and work out a plan to pay it back.
I don't know how mortgage renewals work / whether they credit check or not but If any of those creditors decide to get a CCJ on you I'm pretty sure the mortgage people will notice it.

The mortgage renewals are every 2 years and I've had 2 so far and the rate has went down each time (now sub 2%) this was after all the defaults. I use a broker and they told me no credit check is done as it's just a renewal of the existing mortgage (another 2 year fixed).  

GentleGiant01

Please understand that debts don’t simply “go away” at 5 years. The debt becomes unenforceable but you still owe said company that money. You have to think very carefully about the financial institutions that you owe money too. For example, if you owe a large sum to RBS and don’t pay it back, then you are unlikely to ever be able to bank with any bank within their group again. 

If you then have debts with the other large banking groups, you may be able to “bury your head in the sand” until they “disappear” but you will still have the consequences of being very limited in terms of changing banks for remortgage and day to day banking. Just food for thought. 

It is statute barred after 5 years from last contact / payment, so even if it defaulted in 2019, if you made a payment July 2020 then that’s when the clock resets. 

It is never a good idea to ignore the debt and hope it goes away - especially if all companies you owe too go to CCJ around the same time where on Earth are you going to get the settlement amount from? More debt? 

[Deleted User]

F&F offer can be made before they start a CCJ process - they won't send you an email saying they might do a CCJ, if they want to go for a CCJ, they will apply for it and then you have to go to court about it and assuming you lose, you have to pay the full amount of the judgement to avoid a CCJ. If you want to gamble on that, wait for 5 years, else offer a F&F now

sourcrates

The OP is in Scotland, which means the debt is extinguished in law after 5 years, so yes, occasionally debts do just "go away".

Unlike in the rest of the UK, under the Prescription and Limitation (Scotland) Act 1973, the debt is written off, and it cannot be chased.

The law up there is a lot clearer than it is south of the border, your creditors can start court action by applying for a decree. A different process to the rest of the UK.

Most of the court action commences in the Sheriff Court, your creditor will normally ask a sheriff officer to issue you a charge for payment. 

This is a formal document stating that they except you to pay your debt, or petition for time to pay, usually within 14 days, so you will have 14 days notice (at least) to pay what is owed.

All in all its not an unreasonable strategy, if they pursue legal action, you will just about have time to settle, if they don`t invoke their rights, then that is their decision to make.

Chino

sourcrates said:

The OP is in Scotland, which means the debt is extinguished in law after 5 years, so yes, occasionally debts do just "go away".

The response to "John's" question on the Advice Scotland link below suggests that it could still be six years if any of the OP's credit agreements are written under English law:
When Does A Debt Become Statute Barred?

sourcrates

If the OP resides in Scotland, then they are covered by Scottish law.

The law applicable to the country you live in takes precedence.