Ignored all my debts and now don’t know where to start

Rikku

I’ve been dealing with severe OCD for several years now, one of the compulsions being to buy things that I thought we desperately needed in order for everything to be absolutely perfect. This was at the expense of food and some bills, so now I’m in a big mess of debt and can’t remember what I owe and who I owe it to.

My condition is now under control thankfully and I’m ready to begin tackling my finances properly, but my credit file is a mess and I think I owe around £5,000 to various different lenders. Some are probably close to being statute-barred and others are only a year or two old. There’s also 2 CCJs that I’ve paid off over the past year so it will be years before my credit is back on track even if I clear all of my debts quickly.

I’ve written up a budget including all my expected expenses for the year ahead and have a good idea of how much I have spare to put towards debt, but should I ring up every company that I can remember or should I only contact the lenders who send me letters/emails and those that appear on my credit file?

Also, is it worth paying off all of the debt as quickly as possible in my case or should I focus on building savings and having some money left over at the end of the month, since the debt is defaulted and not accruing interest?

Thank you

kimwp

If the debt is not accruing interest, definitely build up an emergency fund first.

fatbelly

And if debts are not showing on your credit file, that is probably because they defaulted over 6 years ago.

If you haven't been paying, and they are not the ones with a ccj, they are probably statute barred and can continue to be ignored.

If you have a proper diagnosis of OCD, you may want to go down the DHMEF(debt and mental health evidence form) route

https://www.stepchange.org/debt-info/debt-and-mental-health-evidence-form.aspx

sourcrates

I would second the advice above, wait and see who contacts you, if any do, and tackle each on an individual basis.

Some may be statute barred, and once that is established, you can forget about them, others that are still enforceable, you should try for write off`s on mental health grounds, as per fatbelly`s link.

enthusiasticsaver

I agree that if the debts are statute barred just ignore them and build up savings. Even if they aren’t statute barred but are showing on your credit file I would save for F and F especially if interest is frozen. 

Rikku

Thanks everyone for the advice. I thought that this might be the case, I feel incredibly guilty and ashamed to avoid paying for the money that I’ve spent but getting myself sorted so that this doesn’t happen again is probably the most important thing.

For F&F settlements, will that be on my credit file from the date of payment or from the date of the original default?

fatbelly

Rikku said:

Thanks everyone for the advice. I thought that this might be the case, I feel incredibly guilty and ashamed to avoid paying for the money that I’ve spent but getting myself sorted so that this doesn’t happen again is probably the most important thing.

For F&F settlements, will that be on my credit file from the date of payment or from the date of the original default?

If the account is defaulted it will still drop off your credit file six years after the default.

The only difference, if settled with a F&F, is that it gets marked partially settled until it disappears

Rikku

fatbelly said:

Rikku said:

Thanks everyone for the advice. I thought that this might be the case, I feel incredibly guilty and ashamed to avoid paying for the money that I’ve spent but getting myself sorted so that this doesn’t happen again is probably the most important thing.

For F&F settlements, will that be on my credit file from the date of payment or from the date of the original default?

If the account is defaulted it will still drop off your credit file six years after the default.

The only difference, if settled with a F&F, is that it gets marked partially settled until it disappears

Thank you so much! That sounds like the perfect starting point for me once I’ve got an EF set up.