Should I go through with an AP?

Hi all, I have been reading around these forum's on what affect an AP would have on my rating longterm.

Basically my situation is that I'm paying off my credit cards, and after all my outgoings I'm left with less than £30 a month. I have looked at what I can cut back on but found nothing. 

I'm not able to get a balance transfer card on 0%, and I can't get a debt consolidation loan as my rating is fair.

I was thinking of going on an AP for 12 months to try and get myself back on track and pay all 3 credit cards off, but would like to in 2-3 years get a joint mortgage with my soon to be wife, so am aware of the negative affect an AP may have on my score.

Can anyone give me some insights of their experiences?

Comments

  • You're better off simply defaulting. It's the same as an AP but would be off your files much earlier.

    Ignore your score. It's not 'a thing', as the kids say.

    Visit the DFW boards for advice.
  • sourcrates
    sourcrates Posts: 28,825 Ambassador
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    Arrangement to pay markers stay on your credit file for 6 years after your final payment to a debt, so as said above, your better off allowing the account to default first, as defaults stay on file for the same length of time, 6 years, but from the date of default, not the date of your last payment, so it will vanish from your file a good deal sooner.

    The only problem with this in the current climate, is that lenders are being much more cautious about defaulting accounts, guidance leans more towards agreeing to make arrangements to pay, rather than defaulting, in a mis-guided attempt at helping the debtor.
    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
  • adamp87
    adamp87 Posts: 862 Forumite
    First Anniversary First Post Name Dropper

    I'd agree with the feedback above, however I think I'd lessen the idea of a joint mortgage, you'll be able to get one but with defaults/AP's you might find it very difficult to get a good rate through a broker, a major bank may not offer you one at all with defaults.

    If you have the mounting Credit Card debt which is leaving you penniless each month, have you discussed this with your partner? You can ask your lenders for some breathing space perhaps and see if you can reduce some of the debt down, it sounds as if the interest is just eating up your payments.

    The positive from defaulting is the interest stops and you can pay back what you can afford, the negative is it trashes your credit file for the next 6 years (you may see some recovery after 4/5 for some potentail lenders but really the damage is done for 6 whole years). If that is £1 a month for example and that's all you can afford that would then be what you could do.


     

     


  • kaMelo
    kaMelo Posts: 2,355 Forumite
    First Anniversary First Post Name Dropper
    Meleelord said:
    Hi all, I have been reading around these forum's on what affect an AP would have on my rating longterm.

    Basically my situation is that I'm paying off my credit cards, and after all my outgoings I'm left with less than £30 a month. I have looked at what I can cut back on but found nothing. 

    I'm not able to get a balance transfer card on 0%, and I can't get a debt consolidation loan as my rating is fair.

    I was thinking of going on an AP for 12 months to try and get myself back on track and pay all 3 credit cards off, but would like to in 2-3 years get a joint mortgage with my soon to be wife, so am aware of the negative affect an AP may have on my score.

    Can anyone give me some insights of their experiences?
    There is always some slack in everyone's budget that can be cut back on. Maybe post on the debt free wanabee forum to see how much slack you can generate before considering any AP or defaulting. 

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