Just Default? Should this be advised more mainstream for unsecured debt?

Rob5342 · 8 March 2023 at 5:01PM

luvmse said:

sourcrates said:

A classic example of why it`s sometimes better to default than agree an arrangement, is when a debtors income is assessed at a level where the minimum payment is equal too, or more than the contractual payment would have been.

Under those circumstances creditors will not stop charging interest, so you can find yourself in a position even worse than it was before.

Plus you suffer for longer credit file wise, instead of 6 years, your file may be affected for twice as long, or more under an arrangement to pay.

A good debt advisor will explain all the options to you, and allow you to make an informed choice, that is why forums such as this exist, a debt charity will always steer you according to there own guidelines, a compromise if you like, those who charge for advise have only one interest at heart, and that`s separating you from what's left of your hard earned money, you should avoid the latter.

It's a shame that arrangement to pay, or DMP etc are not on the same journey as a default. If all these options would expire after 6 years from the date they are actioned in the first instance it would make more sense.

It does seem rather unfair to me. If you speak to your creditor and arrange a way of repaying the full amount then the outcome for you is a lot worse than if you completely ignore it until it defaults. It seems a bit unfaair on the lenders too as it encourages people to stop paying so the lender makes a loss by selling the debt instead of them repaying the whole amount to the lender. I've stopped paying my Aqua card to make it default which makes it difficult for both of us as they have to keep sending me letters. I'd much rather just keep paying until it's paid off, but as it stands I'm not going to do that as it means my credit record will be harmed for twice as long.