Is Default best before starting journey

britcan

Hello to you all,

I have a simple question.

Before starting the route of getting rid of the burden I have created of debts. Is it best to let debts default before starting any plan of action?

I have about 35000, in debt.

I have read the under a BR tax would be stopped and paid to the OR, no problem there. Also council tax would be stopped, so would it be better to go BR at the start of the financial council tax year than starting a BR in the middle of the year or part way through it?

If going into a plan such as DMP or BR with debts still being paid but a struggle, would this alter things?

Thank you, and have a Happy Xmas.

Rob5342

If you are starting a DMP then we normally suggest that you let the debts default first. The reason for that is that a default drops off off your credit report 6 years after it was put on. If you don't default then you risk and arrangement to pay being marked on your credit report. Arrangements to pay come off your credit report soz years after the debt had been paid off so you credit report will be marked for far longer. Defaults also make it more likely that your debt will be sold.to a debt collector, which is beneficial as they are more likely to accept a reduced settlement offer.

fatbelly

If you are going for an insolvency solution then it is a requirement that you treat all creditors equally.

The easiest way to do that is to pay them all nothing.

britcan

Thank you for the replies, it all makes sense even though I am finding it hard to let things default and or not pay..but I guess it is a means to moving ahead and getting the stress taken off me. Appreciate the info.

sourcrates

Its simply a means to an end, nothing more.

Everything has a strategy in order to obtain the best results.

DisabledDan

britcan said:

Hello to you all,

I have a simple question.

Before starting the route of getting rid of the burden I have created of debts. Is it best to let debts default before starting any plan of action?

I have about 35000, in debt.

I have read the under a BR tax would be stopped and paid to the OR, no problem there. Also council tax would be stopped, so would it be better to go BR at the start of the financial council tax year than starting a BR in the middle of the year or part way through it?

If going into a plan such as DMP or BR with debts still being paid but a struggle, would this alter things?

Thank you, and have a Happy Xmas.

I wished I knew about defaulting 10 years earlier, like a mug I services debt at 5% for years, it was all at zero percent until they got me in that magic place where I could afford to service the debt but not to repay it.  Then pimpping the debt onto another zero percent was no longer an option and I was put on the usual rate. 

First I reduced the payment and then I paid £10, then £5 but it was not until I told them I could no longer make any payment that they finally pulled the trigger and defaulted each card.  They did me the biggest favour, the debt was frozen, no more interest and it was sold off for pennies in the pound.  

I had no assets so nothing to lose, no assets or income but I did not like these debt solutions, I wanted to believe that one day I would be able to pay it off.  It was explained to me that this was irresponsible lending and they were setting me up to fail.  Then I found out about fractional reserve, how the money never really existed, just the ability to create it and charge interest on it for a small fee to the central bank.  So basically nobody was harmed, the bank got a lot of interest and when I defaulted they were able to sell off the debt and improve their liquidity so lend the nearly the same amount  to the next mug.

So get yourself a basic bank account with a bank to do not owe money to and is not associated with any of your current creditors, then start moving your income to that account.

Let the rest slide, if you have an overdraft with current bank it will be swallowed up so take what you need as a fund to fall back on.  When you are ready just let the card companies know you will no longer be able to service the debt due to a change in circumstances and wait for things to hit the fan.

If you can pay off £5k somehow you could consider a DRO, but there can't be any preferential creditors.

I owed a lot more than you (more than double) and it took me a long time to finally accept I would never be able to pay it back.  I knew I would never own a property again or run a business and I decided to never avail myself to credit.  I would have done a bankruptcy but by the time I was in a place where I was able to cope with looking at the debt over 4 years had passed, so I decided to ride it out. 

It is cathartic and if you accept that most of us will end up selling what property or assets we accumulate to pay for a care home then it soon becomes obvious that the like the wargames movie, the best option is not to play.  Have not debt, live within your means and enjoy what you can.

britcan

Thanks for the info....seems time to take the bull by the horns and stop the agony.