Default dilemma. Ideas if any appreciated.

Kerblayer

My partner's landlord is increasing the rent from 800 to 850 from April. Cost of living increase.

I moved in with her 8 months ago. I'm not on the lease, but we split bills. 

Landlord offered to hold the rent if I joined the lease to improve security. I filled out the forms. Unfortunately their checks revealed a default (HSBC Credit Card Sept 2022). Worth adding: I also have a £2500 Overdraft that hit problems at the same time that I somehow convinced HSBC to maintain, which today operates well within its limit.

I have a plan in place with HSBC Repayments Team to clear the card debt since April '23 @£50 pcm.

I have a couple of other credit cards, which did not default after the lenders agreed to hold. I have been paying those down. No missed payments on anything last 14 months.

My plan is to continue paying these debts off. Once cleared avoid credit like the plague - so I didn't really pay attention to the credit rating issues.

I spoke with HSBC informed them of the situation with the upcoming rent increase. How I will probably need to divert the £50 to top-up the rent. Alternatively would it be possible to remove the default instead (I'd prefer to use this £50 to pay down HSBC)?  Person at HSBC was helpful. But could not make decisions. He raised a complaint to "check if the default was an error", which closed today?

I spoke again to HSBC today. Person was helpful and transferred me to either the Financial Guidance Team or Charge Off Team.  Guy I eventually spoke agreed to place my current payment plan in review March. Meaning I would be contacted by letter to set up a new repayment plan if I understood it all correctly?

Ideally, I would like to maintain payments to HSBC to pay off the card BUT that will be difficult to achieve after the rent increases.  Have I missed any options or avenues to explore, because the situation just feels far from ideal. Both for my partner and HSBC.

  

Mark_d

I would continue negotiations with the landlord.  Rather than the landlord needing to pursue just your partner for unpaid rent (£850), the landlord would be able to pursue the two of you (for a lesser amount of £800).  Surely this is preferable for the landlord even accounting for your poor credit history.

fatbelly

I don't see why this is a problem. He wants two people to pursue if you both do a runner, and you agree

As for HSBC I have always found their credit card staff surprisingly helpful and I think the suggestion of a review in March, with the probability of lower payments, a good one.

If the default actually happened then it will stay on your credit file.

I think you need to be concentrating on getting out of that overdraft. Here are some ideas

https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

If you want a more thorough discussion of your situation, post on debt-free wannabe

Kerblayer

@fatbelly

I agree, various people I've spoken to in HSBC have been helpful and very considerate.

Thanks for the hint about the overdraft and the other forum. I will definitely look at that for more advice. Goal is to be debt free. On a practical level I've been slowly reducing usage and chipping away at the OD.

idk if the default is correct. Far as I can tell from HSBC. The computer automatically applied it. Never thought about defaults, until it became a problem. Not planning on applying for anymore credit in future and the payment I agreed with HSBC will take 9 years to clear at current level. Although my income is variable, so my plan is to use any surplus to pay my debts quicker. Ideally clear everything in 3-4 years. idk if that inadvertently extends a default period?

Yes, it makes more sense not to sign on to the lease. We're looking at the landlord's offer to stop baking in the rent hike, unfortunately rents only go up. I don't see the responsibilty as a bad thing, plus it's a committed relationship. Neither of us are planning on doing a runner. Just a stress for her that my past has become a problem.

Kerblayer

@Mark_d

Thanks for the reply. HSBC Repayment Services are sending a statement to confirm the payments I've been making. I was planning to use this to neg with Landlord to see if it helped.. Up to now I've never been sent information on the outstanding balance - just the line entries for the £50 DD on my bank statement.