Unexpected inheritance… what should I do about these debts?

chappellroan

Hi! I unfortunately have around £10,000 debt that I’ve been burying my head in the sand about for a few years..

- £1195 Old Santander overdraft, which has been passed to Cabot and they're chasing me up - recently sent an Orbit agent to ‘get me in touch with them’ though I wasn’t in just got a slip through the letterbox. I believe this was last paid towards in July 2020.

- £293.52 Capital One with ResolveCall via Lowell, I keep receiving settlement offers for this one, last paid in 2022 I think

- £2426.24 Very with BPO via Lowell, I keep receiving settlement offers for this one also, last paid March 2021

- £3059 Paypal last paid in 2021, I have an email from Paypal October 2021 saying it was passed to Wescot but nobody has been chasing me for this
- £3235 Aqua last paid in 2021, have nobody chasing me for this

The reason I’m making this thread is because I am due an inheritance payment towards the end of this year which could cover this amount. This is due to a bit of a fluke (intestacy rules and absent father who had passed away) so I wasn’t expecting it. I was hoping my debts would just wipe by the time I am working full time, as I am still a student at the minute. However, the inheritance would be sufficient for a house deposit, so now I need to look at improving my credit.

I’m wondering whether I should simply call up and pay the debtors that are chasing me when I receive this money?

If I pay a discounted amount to BPO and ResolveCall, the debts will supposedly be marked as ‘partially satisfied’ on my credit file - but would this renew the marker for a further 6 years, or would the debt still disappear by 2027?

And in terms of Aqua and PayPal Credit, where I haven’t been contacted at all regarding these, what should I do about those? I have moved a few times as I was an undergraduate student when I got into this mess and now studying further but rent with my family. So I’m not sure if they are trying to contact me at another address. Has anybody else had this? Should I still try to contact them or wait for these to drop off?

I’m also struggling to find exact dates of defaults for all of the above accounts, so I can’t be certain when they will surpass the 6-years mark. But I’m concerned about renewing this by contacting any of them and ‘acknowledging’ the debt. Any advice on how to find these? My ClearScore shows year last paid and that account is in default for example, but no specifics.

I appreciate that this is a strange query and also that I’m incredibly lucky to potentially be in a position to pay off my debts. I would appreciate any advice anybody can give!

chappellroan

I should also mention, I graduate next summer and am hoping to move back towards my family in another city. So, ideally I would like to buy a house in late-2026/ early-2027, now that I know it’s a possibility and I won’t need to spend years saving for a deposit. How will lenders view these debts if still on my file as ‘partially satisfied’ at this point?

ManyWays

If I pay a discounted amount to BPO and ResolveCall, the debts will supposedly be marked as ‘partially satisfied’ on my credit file - but would this renew the marker for a further 6 years, or would the debt still disappear by 2027?
If these debts have a default date on the credit record, they will drop off 6 yeras after that, settled in full, settled partially, or not settled.

So you HAVE to know the default dates for every debt, or if there isnt one on the credit report. Check the free statutory credit reports with TransUnion first, if some of the debts arent on there check experian, if some are still missing check equifax.  You will need to give your address history to get these reports, otherwise they wont be complete and wont help you.

fatbelly

As well as dropping off your credit report, these are going to go statute barred in 2026-2028

Not sure there's much point to stirring things up. In the unlikely event of any creditor wanting to start a court claim AND having the paperwork to do so, you will have the means to pay them off.

Clean start coming...

chappellroan

ManyWays said:

If I pay a discounted amount to BPO and ResolveCall, the debts will supposedly be marked as ‘partially satisfied’ on my credit file - but would this renew the marker for a further 6 years, or would the debt still disappear by 2027?
If these debts have a default date on the credit record, they will drop off 6 yeras after that, settled in full, settled partially, or not settled.

So you HAVE to know the default dates for every debt, or if there isnt one on the credit report. Check the free statutory credit reports with TransUnion first, if some of the debts arent on there check experian, if some are still missing check equifax.  You will need to give your address history to get these reports, otherwise they wont be complete and wont help you.

Thank you for this - my Experian doesn’t show any of those debts despite having my full address history but I had never tried via TransUnion before. I definitely had my estimates wrong.

Santander - defaulted 22nd September 2020
CapitalOne - defaulted 3rd July 2022
Very - defaulted 13th October 2021
Paypal - defaulted 5th July 2021
Aqua - defaulted 29th January 2021

chappellroan

fatbelly said:

As well as dropping off your credit report, these are going to go statute barred in 2026-2028

Not sure there's much point to stirring things up. In the unlikely event of any creditor wanting to start a court claim AND having the paperwork to do so, you will have the means to pay them off.

Clean start coming...

Thank you, this is what I was thinking to be honest. I’m just concerned about how lenders will see me in terms of getting a mortgage if I wanted to start looking into this late-2026. I would just wait it out but my rent is high and I’d like to move cities.

fatbelly

In late 2027 everything except the Capital One default will have dropped off, and that one can be marked settled for £300.

Can it wait 24 months?

enthusiasticsaver

These will not drop off your record for 6 years regardless of whether you settle or not so I suggest you focus on just saving for a deposit.  

Flatericsdistantcousin

Personally, wipe out all the debt in one go. Why? it will help with your credit score and get you better deals on managed loans in the future. 
Carrying debt and not paying it is not an ideal position to be in, once they are cleared you can move forward with a clean slate so to speak. 

I was always advised this when working with my financial adviser, and i'm certainly, and i'm by no means debt free but it's managed. 

fatbelly

This illustrates why you should get debt advice from a debt adviser, not a financial adviser. The latter would be happy to see you throw away 10k for no good reason

Flatericsdistantcousin

If OP wants a mortgage at a good rate, clear the debts off. If it's an unexpected windfall, it's a good opportunity to do this. 
It's certainly not throwing £10000 away, it's paying what you owe. But you may well get more lenders and better rates. 
If you can already show you are paying rent, your in a position to potentially even get a zero deposit deal. 


fatbelly said:

This illustrates why you should get debt advice from a debt adviser, not a financial adviser. The latter would be happy to see you throw away 10k for no good reason