Time statute barred debts - mortgage possible?

MoneySaver_1978

Hi, my husband and I have some debts that are very near if not already statute barred and one settled CCJ. We can pay the outstanding debts if needed (only two now show on our credit files) but want to know where we stand in terms of getting a mortgage. We have been gifted a sizeable deposit from the in-laws and both have a good salary but not sure about what to do on the outstanding debt. Looking for advice please before we appoint a mortgage advisor. 

ACG

There are generally 2 types of lenders:
1) Those who credit score, typically high street banks. They take everything into account before scoring your application. The CCJs will be factored into that. The statute barred element probably wont. Satisfied or unsatisfied probably will play a part. 

Satisfying them will form part of the overall picture. Satisfying them may or may not help you get accepted, but it will depend on the rest of the picture. If you satisfy them today, that wont get reflected on your credit report for up to a month or 2. So satisfying them today and applying next week probably wont make much difference. 

2) Specialist lenders - this may mean "sub prime" or building societies who do not credit score. Whether or not you will be accepted will generally depend on whether or not you fit criteria. Fit criteria and there is a reasonable to good chance you will be accepted. If you dont then you wont. Satisfying them would only really help if it switches you from being outside criteria to being within criteria. 

In essence, it might help, it might not. It really depends on the bigger picture. 

MoneySaver_1978

ACG said:

There are generally 2 types of lenders:
1) Those who credit score, typically high street banks. They take everything into account before scoring your application. The CCJs will be factored into that. The statute barred element probably wont. Satisfied or unsatisfied probably will play a part. 

Satisfying them will form part of the overall picture. Satisfying them may or may not help you get accepted, but it will depend on the rest of the picture. If you satisfy them today, that wont get reflected on your credit report for up to a month or 2. So satisfying them today and applying next week probably wont make much difference. 

2) Specialist lenders - this may mean "sub prime" or building societies who do not credit score. Whether or not you will be accepted will generally depend on whether or not you fit criteria. Fit criteria and there is a reasonable to good chance you will be accepted. If you dont then you wont. Satisfying them would only really help if it switches you from being outside criteria to being within criteria. 

In essence, it might help, it might not. It really depends on the bigger picture. 

Thank you for the thorough response. Focusing on option 2 specialist lenders. Would a mortgage advisor know before we apply if there's a good chance we fit the criteria? Are you able to give more insight on the criteria? Our deposit will be around 15-20% of the purchase price and we would be looking to borrow significantly less than the LTV (based on a high street bank).

ACG

The specialist lenders criteria is generally black and white, but there is a post on here by someone called sherbet (or something like that) - the thread is called TML/The mortgage lender I think. Have a look at their post as its not quite as simple as I say. 

In terms of brokers, it probably helps to have someone who is experienced in adverse as they work differently to high street lenders and whilst the outcome should not differ from one broker to the other, getting to the finish line can differ in terms of ease and speed. 

fatbelly

MoneySaver_1978 said:

Hi, my husband and I have some debts that are very near if not already statute barred and one settled CCJ. We can pay the outstanding debts if needed (only two now show on our credit files) but want to know where we stand in terms of getting a mortgage. We have been gifted a sizeable deposit from the in-laws and both have a good salary but not sure about what to do on the outstanding debt. Looking for advice please before we appoint a mortgage advisor. 

If the debts show on your credit file, they're not going to be statute barred.

The entry stays for 6 years after it is defaulted or settled, whichever happens sooner.

The default date is now taken by the courts as the 'cause of action', i.e. the date the clock starts ticking. Obvs any payment or other acknowledgement restarts the clock

If you are near the 6-year point then you might want to just pause until they disappear. There's a slight risk that the creditor will want to start a court claim before the 6-year point, but you can move to plan B if that happens

The ccj stays until 6 years from the date of judgement

MoneySaver_1978

fatbelly said:

MoneySaver_1978 said:

Hi, my husband and I have some debts that are very near if not already statute barred and one settled CCJ. We can pay the outstanding debts if needed (only two now show on our credit files) but want to know where we stand in terms of getting a mortgage. We have been gifted a sizeable deposit from the in-laws and both have a good salary but not sure about what to do on the outstanding debt. Looking for advice please before we appoint a mortgage advisor. 

If the debts show on your credit file, they're not going to be statute barred.

The entry stays for 6 years after it is defaulted or settled, whichever happens sooner.

The default date is now taken by the courts as the 'cause of action', i.e. the date the clock starts ticking. Obvs any payment or other acknowledgement restarts the clock

If you are near the 6-year point then you might want to just pause until they disappear. There's a slight risk that the creditor will want to start a court claim before the 6-year point, but you can move to plan B if that happens

The ccj stays until 6 years from the date of judgement

There are only three that show. One on mine and two on my husband's. We can get these paid if need be. There are three however which are not on there, does this mean they are likely to be statute barred? As I understand, it depends on the creditor as to when the debt is considered defaulted. Two of the debts still showing are Barclaycard. A quick search on Google suggests a credit card with them is in default after six months of non-payment.

MoneySaver_1978

ACG said:

The specialist lenders criteria is generally black and white, but there is a post on here by someone called sherbet (or something like that) - the thread is called TML/The mortgage lender I think. Have a look at their post as its not quite as simple as I say. 

In terms of brokers, it probably helps to have someone who is experienced in adverse as they work differently to high street lenders and whilst the outcome should not differ from one broker to the other, getting to the finish line can differ in terms of ease and speed. 

Thank you. Bit of a minefield when searching for brokers who are experienced in adverse. Are you able to say what things I should consider before appointing someone please? 

fatbelly

The Creditor guidance is that a default should be registered after 3-6 missed payments. But you are correct, creditors differ on this and it's only guidance. This was pointed out at the court case that set this as precedent. Nevertheless we are stuck with it.

If you haven't made a payment or otherwise acknowledged the debt following the default then yes the debt both goes statute barred and drops off your file at the same time.

It's also going to be more difficult for creditors to pursue statute barred debts after 31 July. The FCA are binging in their 'Consumer Duty' and have said they are aware of practices such as 'discovering' a rogue payment and failing to make it clear that they know a debt is statute barred.

ACG

MoneySaver_1978 said:

ACG said:

The specialist lenders criteria is generally black and white, but there is a post on here by someone called sherbet (or something like that) - the thread is called TML/The mortgage lender I think. Have a look at their post as its not quite as simple as I say. 

In terms of brokers, it probably helps to have someone who is experienced in adverse as they work differently to high street lenders and whilst the outcome should not differ from one broker to the other, getting to the finish line can differ in terms of ease and speed. 

Thank you. Bit of a minefield when searching for brokers who are experienced in adverse. Are you able to say what things I should consider before appointing someone please? 

Just have a chat with them, see if they are confident. Maybe see if there is anything on their website specifically about adverse. 

Usually, if someone is borderline high street/specialist lenders I would say have a conversation and see if they go direct to adverse rates or not. In your case, I dont think you are borderline and I think you will be specialist lenders. You MIGHT get lucky with a building society, but the devil is in the detail. 

Just call up one or 2 and have a chat with them. See if you feel comfortable with them.