Advice regarding saving for a Mortgage whilst on DMP

Hello

It's been more than 6 years since I started my DMP and my credit file now looks better. I managed to get some of my debt cleared too via a Partial Settlement using money gifted to me with some of my creditors but PRA Grp wouldn't accept, so I still have 7K of debt with them.

I recently moved in with my partner and we want to save for a mortgage. We estimate that within 2 years we can save 18K, enough for a deposit and fees. My debt would have also reduced to around 3k by then too.

What I would like to know, is it possible to get a mortgage if I am still on the DMP? It's with Step Change. 

I know I could save for longer to clear my debt, but I'm already in my 50s and can't leave it too much longer as looking at a 20 year term. 

Many thanks 



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  • fatbelly
    fatbelly Posts: 20,232
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    The entries for the debts on your credit file will have disappeared 6 years after the default.

    You should get copies of your files from the 3 main CRAs and correct any wrong information. It's quite likely your files will now be quite clean.

    That only leaves the PRA debt, and they are notorious for not accepting settlements. You could persevere, you could just carry on with the same or lower payments to them.

    However, if this was s Consumer Credit Act debt, have you tried a s77-79 request, commonly called a CCA?
  • Firefarie71
    Firefarie71 Posts: 23
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    Hello @fatbelly

    I ask for CCAs from PRA for 2 debts. They sent reconstituted ones. One is a CCA with my signature on it but it's a micro copy. I can only read it with a magnifying glass. I can't tell if the other is a true copy as it hasn't details relating to me on it or dates. 

    I was told by mortgage broker today they won't help us. They asked me to obtain a report from check my file and its 2 our of 5 stars. They said they only help if my report is 4 out of 5 stars. I have 2 debts on there that shows the DMP. One was settled Jan 2019 the other June 2020. No other debts show defaults or late payments. 

    Will those debts drop off the credit files after six yearsfrom date settled? I.e. Jan 2025 and June 2026?

    Also,  If I pay off PRA and end my DMP,  how far back do mortgage lenders go when checking bank statements? If they see a payment to Step Change, they will ask questions.

    I find this a bit overwhelming. Is there someone I can go to for advice? Isthis something that a financial advisor can help with? I feel I need some help with taking the best course of action. 
  • sourcrates
    sourcrates Posts: 28,537
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    You need to change mortgage broker, find one that specialises in bad credit mortgages.

    Any response to a CCA must be a legible copy, you must be able to read the information contained within it.

    From what you have said neither response to your requests appear to be compliant.

    Defaults stay on file for 6 years and are then automatically removed regardless of the status of the debt.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,232
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    edited 5 February at 6:45PM
    I agree. Trying to use a broker that relies on a star system from a commercial company that isn't even a credit reference agency is always going to be a problem.

    Two settled defaults should not be a big issue. I think what you're saying is that the 2 remaining PRA debts don't show at all.

    Considering your priority is now saving for a mortgage and you have potential defences (not guaranteeing they would work) against PRA, and they have already turned down offers to settle, I would be inclined to stop paying them

    If they did start a court claim there are a couple of specialist websites and legal specialists who could help.

    The absolute worst case is that you would dip into your savings pot.
  • Firefarie71
    Firefarie71 Posts: 23
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    Thanks @fatbelly and @sourcrates. I should say that I have zero defaults on my credit file now. Just these old debts attached showing the DMP. 

    I am tempted to stop paying PRA and put the £153 a month I pay them into savings and seeif they offer me a settlement. I guess my fear is them taking me to court. However, I imagine I would get an opportunity to start paying them again before that happens? At what point do I take them seriously? Ive never been threatened with Court Action before. 

    It would take me a good year to save enough to pay them off in full. I haven't told my DMP provider my living situation has changed and I have more money I can save (and tbh I don't intend to tell them as they will insist the disposable goes to PRA) 


  • Sly72
    Sly72 Posts: 112
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    You need to change mortgage broker, find one that specialises in bad credit mortgages.

    Any response to a CCA must be a legible copy, you must be able to read the information contained within it.

    From what you have said neither response to your requests appear to be compliant.

    Defaults stay on file for 6 years and are then automatically removed regardless of the status of the debt.
    Question: you state" Defaults stay on file for 6 years and are then automatically removed regardless of the status of the debt." after this if you apply for credit (Wont as learnt lession) wil this appear on seaches they do?
    I have Dyslexia which is a learning difficulty that primarily affects the skills involved in accurate and fluent word reading and spelling so some post may not make sense.
  • fatbelly
    fatbelly Posts: 20,232
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    edited 5 February at 9:00PM
    6 years after default date or settlement date (whichever happens sooner) the whole entry is removed. There is nothing for anyone to see if they search your file.

    OP - no need to be scared of court action. If it happened there are several stages and you can get help at every stage. If everything failed you can still stop a ccj from appearing if you pay it off within a month.

    PRA are difficult to get a settlement deal from but not impossible if you really wanted to do that. I'll see if I can link to a thread. A recent one here

    https://forums.moneysavingexpert.com/discussion/6498645/dca-settlement-counter-offers-pra-intrum
  • Firefarie71
    Firefarie71 Posts: 23
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    Hi @Fatbelly. Thank you. I only have the 2 debts with PRA now. I offered them a settlement of £3.5k last year and they came back with only 5% reduction. I used the money to then get partial settlements on three other debts I had at the time with Link Finacial. I'm starting from scratch with savings, but by August I'll have around £4K saved up. I'm thinking maybe stop paying PRA around June this year and see what happens? Then at least I'll have some savings to make either a partial settlement, if they do make an offer. IF court action is threatened, do I have to pay off in full to avoid a CCJ? 
  • Firefarie71
    Firefarie71 Posts: 23
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    @fatbelly forgot to mention these PRA debts are not on my credit file. Both defaults dropped off last year. 
  • fatbelly
    fatbelly Posts: 20,232
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    Hi @Fatbelly. Thank you. I only have the 2 debts with PRA now. I offered them a settlement of £3.5k last year and they came back with only 5% reduction. I used the money to then get partial settlements on three other debts I had at the time with Link Finacial. I'm starting from scratch with savings, but by August I'll have around £4K saved up. I'm thinking maybe stop paying PRA around June this year and see what happens? Then at least I'll have some savings to make either a partial settlement, if they do make an offer. IF court action is threatened, do I have to pay off in full to avoid a CCJ? 
    The first stage would be a standard preaction letter with reply form and 30-day limit.  We would show you how to reply.

    Then would be a claim form. It's all a bit hypothetical at the moment. You would only need to pay if it got all the way through the process to a ccj.
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