Income and expediture

helppleasethankyou1000

Hi all - I am trying to arrange a reasonable payment plan, this exercises are quite difficult to judge as realistically many spends are adjustable, what is the best tactic to have a largest options of payment plans available? Is it to leave just the amount you want to offer per month or something else? Many thanks 

stu12345_2

who is forcing you to do an income expenditure sheet or are you doing a plan for yourself, just some debt companies try it on all the time by demanding one.

you will have fixed costs like rent, mortgage , council tax and variable ones, like clothes, hobbies.

you can hit a debt company with anything you fancy and watch their reply,  you are the boss, you are in charge

helppleasethankyou1000

Thanks , arranging a payment plan with Barclays. The only long term option they have is a payment plan, they say it’s not a default on the credit file. In reality is a payment plan and a default the same thing ? 

Brie

helppleasethankyou1000 said:

Thanks , arranging a payment plan with Barclays. The only long term option they have is a payment plan, they say it’s not a default on the credit file. In reality is a payment plan and a default the same thing ? 

I think the difference will be how it appears on the credit history.  By the sound of it Barclays will lodge it as an arrangement to pay whereas not paying or not paying to their rules might make it a default.  

Have you done your budget in full?  The Statement of Accounts is a great way to organise what your finances look like.  And assuming you have any other debts then the accepted thing is to make pro rata payments to each.  So if Barclays is £1k and Halifax is £100 your payment to Barclays would be 10 times the amount to Halifax.  

Most income & expenses schedules allow a bit of extra each month to take account of the variables.  

Martico

One difference to be aware of (particularly if you think you'll want a mortgage at some point in the not-too-distant future) is that a default marker is removed from your credit file six years after the default is first recorded, whereas an arrangement to pay marker drops off your credit file six years after the debt is repaid. So it'll mark your card for longer.  

helppleasethankyou1000

Martico, really? So effectively impacts your credit file for 6 more years (if the arrangement is for 6 years). 

I was not aware of that, therefore a default is better credit rating wise? 

Martico

Afraid so. Explained more fully in one of the early posts on this useful thread

stu12345_2

yes, step change  debt charity pull that fast one on folks, they said to me join up and start paying a plan right away and you won't get defaults, your credit file with be better 

they never said it will be marked as arrangement to pay which will take longer to fall off your report

remember if you live with a partner, work out the ratio of wages to theirs so you can work out how much you actually contribute to  household expenses.

it's rare to do a 50 50 , that means you both earn exactly the same 

mines is 33%, wife is 67% contributions and then you have to add in any debts they are paying back into the calculation 

helppleasethankyou1000

I guess a payment plan it’s better in the short term (0 - 6 years) but not in a longer term (post 6 years to 12 years).

Question- in the post 6 years that an arrangement stays on your record (by then it’s all paid), have people been able to get normal credit again , credit cards , mortgage etc? 

The payment plan route appeals to me more froman employment perspective , annoying it doesn’t just ‘drop off’ like a default does after 6 years. Seems unfair really, but maybe it doesn’t impact your file as much in them 6 years post pay off as much???

stu12345_2

some defaults don't kick infor 6 months, even longer, so add the 6 yrs on from that point.
are you planning to pay a reduced amount till the debt is cleared or are do you want a plan until you catch up , then go back to normal payments 

when you say employment , what you mean, bankruptcy will affect employment ,than a default will or arrangement to pay.

do you intend to work in a bank or the police 

kimwp

helppleasethankyou1000 said:

I guess a payment plan it’s better in the short term (0 - 6 years) but not in a longer term (post 6 years to 12 years).

Question- in the post 6 years that an arrangement stays on your record (by then it’s all paid), have people been able to get normal credit again , credit cards , mortgage etc? 

The payment plan route appeals to me more froman employment perspective , annoying it doesn’t just ‘drop off’ like a default does after 6 years. Seems unfair really, but maybe it doesn’t impact your file as much in them 6 years post pay off as much???

It's impossible to say the exact effect of defaults and arrangements to pay, as each company will have its own criteria. However, they both indicate a failure to manage available credit.