Should I default on my debts?

Verulamium_Vixen

Hi
I would really appreciate some advice. 
I am 59 and owe £35,000 across 3 credit cards and am repaying £850 per month. (Virgin, Barclaycard and John Lewis - the old one, I didn't order the new one so that account is closed.)
I am trying not to spend on the remaining 2 but want to clear them. I am planning to retire next year and my lump sum should clear them. (I plan to resurrect my nursing registration once retired and work as a nurse in addition to my pension)
We also have a mortgage of £220k fixed at 1.79% until 2027.
I really cannot afford the monthly card repayments and was going to approach the companies and ask them to suspend interest but I  think even asking that question would affect my credit rating. 
I want to pay them off, close them down and never have a credit card again.
I must protect my mortgage, I cannot lose my home.
All the cards are in my name only, none have an additional user.

The advice on here seems to be to simply default and wait for them to contact me.

I have a few questions:
Could they force me to sell our home?
Could they freeze my bank account?
Would they chase my husband? He is already retired and in very poor health. 

When I do clear them off next year would I still have an adverse credit record which will prevent me renewing the mortgage in 2027?

Please don't attack me,  I am more than happy to clear my debts, I just need some space.

V

fatbelly

Can you really afford to lose 35k from your pension? That seems quite a big hit.

It might be a better plan to default now, make payments of what you can comfortably afford, let them pass (sell) the debts to a debt buyer (Lowell, Cabot, PRA...) and then start talking about full & final settlement in a year or so's time.

You don't seem to have much understanding of the debt world. These are non-priority debts. If they were to see court action it would probably be after you have ignored them for many years (which I'm not suggesting you do) as they have 6 years to start a claim.

It's only when there is a county court judgement that you have not paid according to the court's instructions that the enforcement methods can be used.

No other person can be made to pay your debt, even if they are a second card holder, and your property is not in danger (happy to argue that if anyone thinks otherwise)

Having marks on your credit file is not a barrier to getting a new mortgage deal. Debt Camel (who is an excellent source of debt info BTW) has recently written about this here

https://debtcamel.co.uk/new-mortgage-fixed-rate-poor-credit/

enthusiasticsaver

I strongly recommend you don’t use your pension lump sum to pay off unsecured debt. The mortgage should be your priority as it is still quite large. How do you intend to cover the mortgage repayments in retirement as very few lenders will lend past 70? 

No unsecured lenders cannot force you to sell your home. 

They cannot freeze your bank account
They won’t chase your husband if the debt is in your name.
if you default or ask for arrangements to pay lower amounts that will affect your credit record but if you stick with your current mortgage lender you should be able to renew the mortgage. 

Verulamium_Vixen

Thank you both, the information you have given is really helpful.
The mortgage will be cleared in 2029 when I am 66.
I have bad memories of being broke in my early 20's back in the 1980's .
Those scary letters from the bank and a £22 charge for each letter. I  assumed that was the way they still worked.
I don't plan to retire until my late 60's I just need to change direction as I want to find something useful other than my current pen pushing existence. It will take 3 months to recover my nursing registration. We can downsize should our children ever leave home. They are due to start A levels in September and hopefully go to higher education after that.  I would prefer to invest a big portion of my lump sum in that direction to be honest but I really struggle with the idea of owing anybody anything.  
V

fatbelly

Things have changed a lot in the way creditors (banks in particular) are allowed to treat people and that is due to be tightened another notch with the FCA  Consumer Duty that comes in on July 31..

You must do what's best for you, Credit card debts are a long way down the list of priorities, and if the minimum payments are not affordable then you should stop paying them