50k Unsecured debts and can't see any way out.....

13thlegion

Just default seems the better option. It can feel more productive to get writing to your creditors but as you've read is counter productive in the long term.

Front foot action is to cancel your payments and wait for the default letters. More action you can take is to edit some contact details so that if they try and harass you over the phone pre-default then you can more easily ignore them. Only thing that counts is letters of default. (Anything more serious comes after default by which time you'll be paying so no threat of worse consequences)

fatbelly

I agree with the above. If you do have £500 per month available, save that somewhere unconnected to your debts as an emergency/fighting fund and you are giving yourself options, while you get into a stable situation.

I'd say the only letters that matter are formal preaction protocol letters and it could be years, or never, before you get one.

elsien

When I was talking about the care act assessments, I wasn’t actually referring to finances. I was thinking that if your father-in-law is entitled to support, it might take some of the stress off your wife. That was all. 

exponential

fatbelly said:

I agree with the above. If you do have £500 per month available, save that somewhere unconnected to your debts as an emergency/fighting fund and you are giving yourself options, while you get into a stable situation.

I'd say the only letters that matter are formal preaction protocol letters and it could be years, or never, before you get one.

The only thing that I'm a bit unsure about is the impact of a default vs an AP on your credit files. Surely an AP is seen by other creditors as a positive thing as at least you've made an attempt to pay your debts off instead of just defaulting on them?

Am I missing something here? 

exponential

elsien said:

When I was talking about the care act assessments, I wasn’t actually referring to finances. I was thinking that if your father-in-law is entitled to support, it might take some of the stress off your wife. That was all. 

Thank you elsien.

I will look into this and see if it leads anywhere. 

JadedAngel88

exponential said:

fatbelly said:

I agree with the above. If you do have £500 per month available, save that somewhere unconnected to your debts as an emergency/fighting fund and you are giving yourself options, while you get into a stable situation.

I'd say the only letters that matter are formal preaction protocol letters and it could be years, or never, before you get one.

The only thing that I'm a bit unsure about is the impact of a default vs an AP on your credit files. Surely an AP is seen by other creditors as a positive thing as at least you've made an attempt to pay your debts off instead of just defaulting on them?

Am I missing something here? 

Say if it takes you 10 years to clear the debt ok. So an AP marker will disappear in 16 years. 

If you default but it still takes 10 years to pay off the debt. The defaults disappear in 6 regardless if the debt is fully paid or not.

exponential

JadedAngel88 said:

exponential said:

fatbelly said:

I agree with the above. If you do have £500 per month available, save that somewhere unconnected to your debts as an emergency/fighting fund and you are giving yourself options, while you get into a stable situation.

I'd say the only letters that matter are formal preaction protocol letters and it could be years, or never, before you get one.

The only thing that I'm a bit unsure about is the impact of a default vs an AP on your credit files. Surely an AP is seen by other creditors as a positive thing as at least you've made an attempt to pay your debts off instead of just defaulting on them?

Am I missing something here? 

Say if it takes you 10 years to clear the debt ok. So an AP marker will disappear in 16 years. 

If you default but it still takes 10 years to pay off the debt. The defaults disappear in 6 regardless if the debt is fully paid or not.

Ok, I understand that now.

The question behind all of that is how is a default seen as opposed to an AP in terms of seriousness?
I completely understand that with defaults, you're pretty much a no-go area as far as creditors are concerned btu how do they see an AP? Yes, it stays on your file for 6 years after the debt is cleared but is the AP seen as a really bad thing or just a slightly negative thing?

So, if I default, I can say goodbye to a remortgage at a better rate for 6 years but an AP, how is that seen by lenders and will they still work with you?

ManyWays

For a mortgage from a high street lender, the important thing is that the default is over 3 years ago and that it has been settled more than two years ago. It doesnt matter if the default is still on your credit record which it could be if the DMPp started 5 years ago and only took 3 years to pay everything off.

But being off your credit record on its own is not enough because a mortgage lender will still see any payments being made to a DMP or debt collectors from your credit records so you must have settled the debt, partially or in full, at least 6 months before a mortgage application if the debt is no longer on your credit record.

And exactly the same applies for APs. High street mortgage lenders will want them to have been settled at least two years before any application. They dont in general see these as less bad than defaults.

You can get a mortgage with a bad credit lender with defaults or even CCJs on your credit record, but it will be at a high rate, not a good idea. 

But all this is for new mortgages or remortgages. If you only want a new fix from your current lender and they are mainstream, not bad credit, then you can get a new fix no matter how bad your credit record is. 

exponential

ManyWays said:

For a mortgage from a high street lender, the important thing is that the default is over 3 years ago and that it has been settled more than two years ago. It doesnt matter if the default is still on your credit record which it could be if the DMPp started 5 years ago and only took 3 years to pay everything off.

But being off your credit record on its own is not enough because a mortgage lender will still see any payments being made to a DMP or debt collectors from your credit records so you must have settled the debt, partially or in full, at least 6 months before a mortgage application if the debt is no longer on your credit record.

And exactly the same applies for APs. High street mortgage lenders will want them to have been settled at least two years before any application. They dont in general see these as less bad than defaults.

You can get a mortgage with a bad credit lender with defaults or even CCJs on your credit record, but it will be at a high rate, not a good idea. 

But all this is for new mortgages or remortgages. If you only want a new fix from your current lender and they are mainstream, not bad credit, then you can get a new fix no matter how bad your credit record is. 

Forgive my inexperience here but when you say a default has been "settled", does that mean I have paid it off myself or the creditor has written the debt off? I though the whole point of just defaulting is that you make no payments at all?? Sorry for not understanding this...

I just want to do the right thing that's all. Either make token payments with no interest or charges knowing that my income will allow me to clear the debts fairly quickly or just default and make no payments at all.
The thing with the defaults is the threat of legal action.....that's the scary bit and the only thing stopping me from just doing it without much more thought.

Floss

exponential said:

I just want to do the right thing that's all. Either make token payments with no interest or charges knowing that my income will allow me to clear the debts fairly quickly or just default and make no payments at all.
The thing with the defaults is the threat of legal action.....that's the scary bit and the only thing stopping me from just doing it without much more thought.

Is any of your debt secured on your home?

If not, then defaulting is unlikely to result in legal action. Threats of, yes, but they are generally hot air until you get a Letter Before Action. That is the letter that you need to take notice off & respond to.