Debt advice

sourcrates

kimwp said:

Text from stepchange:

A DMP is not based on Government legislation, so it does not protect you from legal action by your creditors.

Solutions like individual voluntary arrangements (IVA) or bankruptcy do.

It is rare to get a CCJ during your DMP if you stick to payments. But it is possible.

https://www.stepchange.org/debt-info/interest-creditor-contact-and-dmp.aspx#:~:text=Can%20you%20get%20a%20County,if%20you%20stick%20to%20payments

Which is why in Scotland their debt management plans are regulated, and give you legal protection from further action by your creditors, a step forward the Government was going to introduce to the rest of the UK, but now appears to have been put on the back burner.

Having said that, if you are in debt management, in the vast majority of cases taking legal action holds no benefit whatsoever to a creditor, they won`t get anymore money from you, and your payment in either case is based on your disposable income, so why bother.

The chances increase if you are a homeowner, and have large debts, this is a higher risk category, but if you rent and have no assets, the chances drop to almost zero, but these things are usually decided on a commercial case by case basis.

fatbelly

ManCity11 said:

Hi all just looking for bit of advice of whats the best course action i should do.

So we are roughly around 30k of debt
16k loan (joint)
11k loan  
and 3 other small creditors round 3k total.

Have been on token payments for 5 years now paying £1 month and all defaulted over 4 years ago.

Is there much point even trying to even pay the big loans off at all ?

In your position I'd be thinking about getting a mortgage rather than paying £1400 rent.

And there is every chance you will have a clear credit file in two years.

I would not normally advise to continue with token offers for more than a few months but in your case why shake the apple cart, or whatever the phrase is.

Carry on as you are and react to anything that happens.

ManCity11

fatbelly said:

ManCity11 said:

Hi all just looking for bit of advice of whats the best course action i should do.

So we are roughly around 30k of debt
16k loan (joint)
11k loan  
and 3 other small creditors round 3k total.

Have been on token payments for 5 years now paying £1 month and all defaulted over 4 years ago.

Is there much point even trying to even pay the big loans off at all ?

In your position I'd be thinking about getting a mortgage rather than paying £1400 rent.

And there is every chance you will have a clear credit file in two years.

I would not normally advise to continue with token offers for more than a few months but in your case why shake the apple cart, or whatever the phrase is.

Carry on as you are and react to anything that happens.

Thank you. I do want to tackle the debt. Just its so hard to do so and to save for a mortgage.
just getting closer to that 6 years n am extra paranoid as its getting closer, which felt a life time ago 4 years ago.  Looking back a wish id just done the dro or bankcrupcy route but hey ho.

tigergambit

1stTimer said:

There's a difference between the debts disappearing from your credit record and debts being statute barred, which means a creditor can no longer take legal action.

Yes I am aware, however OP says they are waiting for them to drop off credit file in the hope to get a mortgage which defaults will. 

Considering token payments have been made for the last 5 years and no mention of statute barred was mentioned in the post I’m really not sure why it came up.

i suspect OP may be doing what I am, keeping the creditors sweet until I can buy a place and wait for a decent F&F settlement offer or just ride it out.

I guess it all depends on how much aggro you are getting now paying token payments, I haven’t had anything but offers from my creditors in the last year they are just not low enough for me to want to take them. Rocking the boat and stopping those token payments 4 years in when they have already provided cca’s could start letters etc again

This was my point - I don't think this is an unreasonable strategy.

I don't know whether it will work - do mortgage lenders really not make further checks? - but assuming you are young enough to obtain a reasonable time in which to pay off the mortgage the risk/reward seems good.

ManyWays

You wont be able to get a 95% mortgage if your bank statements (which every mortgage lender asks for) shows you are making payments to debts that arent visible on your credit record, that is a real giveaway that you have old defaults. Mortgage lender care about unsettled debts, they dont care about your credit score.

And if you stop paying the debts six months before a mortgage application, so they wont show on your bank statements, the creditors are likely to go for a CCJ.

I know this isnt what you want to hear, but your best way forward now may be to make a settlement offer to the large loans, even though this will take a good chunk of your savings. (Go back 5 years and your best option may have been bankruptcy, but now that would delay a mortgage for another 6 years.)

ManCity11

ManyWays said:

You wont be able to get a 95% mortgage if your bank statements (which every mortgage lender asks for) shows you are making payments to debts that arent visible on your credit record, that is a real giveaway that you have old defaults. Mortgage lender care about unsettled debts, they dont care about your credit score.

And if you stop paying the debts six months before a mortgage application, so they wont show on your bank statements, the creditors are likely to go for a CCJ.

I know this isnt what you want to hear, but your best way forward now may be to make a settlement offer to the large loans, even though this will take a good chunk of your savings. (Go back 5 years and your best option may have been bankruptcy, but now that would delay a mortgage for another 6 years.)

I got away way round this with bank statements.
I pay the £1 monthly standing order out of my sister bank. Am pretty sure got everything covered I THINK. Prob sounds crazy what indo but if everybody is stuck in long term private rent and with kids they will understand.

kimwp

ManCity11 said:

ManyWays said:

You wont be able to get a 95% mortgage if your bank statements (which every mortgage lender asks for) shows you are making payments to debts that arent visible on your credit record, that is a real giveaway that you have old defaults. Mortgage lender care about unsettled debts, they dont care about your credit score.

And if you stop paying the debts six months before a mortgage application, so they wont show on your bank statements, the creditors are likely to go for a CCJ.

I know this isnt what you want to hear, but your best way forward now may be to make a settlement offer to the large loans, even though this will take a good chunk of your savings. (Go back 5 years and your best option may have been bankruptcy, but now that would delay a mortgage for another 6 years.)

I got away way round this with bank statements.
I pay the £1 monthly standing order out of my sister bank. Am pretty sure got everything covered I THINK. Prob sounds crazy what indo but if everybody is stuck in long term private rent and with kids they will understand.

Just be careful that you are not committing fraud on your mortgage application.