Which Debt to Default on

Debtsolver33

ayupmeduck said:

Do you live at home, pay no bills or food, never go out or buy anything?

Partner covers all food and bill. Reduced everything want to clear of debt ASAP

Debtsolver33

fatbelly said:

If you really have no housing costs or food costs and the vast majority of your income is available for servicing debts, then you can snowball, i.e. pay your contractual amounts and overpay the most expensive debt. But it's going to take a long time.

Yea would take around 2 years with no life and at the end I end with no savings. so thinking if its worth it

ChampagneSupernova36

That’s the sacrifice we’ve got to make sometimes when we have debt to clear (I say ‘we’ because I’ve been there) , it feels like a slow slog but it’s worth it in the end when you owe 0 and every penny you have is yours. You can save up quite nicely from then on. Or if you decide on a DMP, budget even £50 a month to put away for a rainy day whilst you prioritise debts & you can increase it as your debt repayments reduce.

Debtsolver33

My thought process is like this.

I don't want all my income minus my minimal expense for next 2/3 years to go into paying off the creditors. Understand I would be debt free, there aren't much moral or mental stimulus for me achieving that. Cause that means I will have 0 zero savings no spare money for any sort of entertainment. As you can see I not added anything for clothes/ travel etc. I have enough clothes and really don't go out shopping and my current job is local to me so travel is nil but as we know things can change. So this budget is a tight one and my current job is only a 6 month contract, found is very hard to secure a better paying role like the one I had previously.

Theres more to life than paying off debt especially its unsecured. 

I do intend to get a mortgage and have the options to secure loans for future usage but just unfortunate circumstances lead me to think for alternative means below.

I read people can still get mortgages with defaults. Factors to consider are

1. How many defaults
2. Age of default
3. Default amount
4. Default been paid off or not

From what I read 2/3 defaults is OK, no default within 2 years of applying for credit is generally a good time/ default amount smaller the better/ paid off is better than not

I have 5 credit cards, one of them I have no arrears and spoke to the team and will allow me to continue using it ( I aim to pay it off in full c£2300). 2 credit cards said they will close off my card after I paid off, £1400 and £1770, agreed a monthly payment for 12 months of £50 and £70 retrospectively and 2 credit card on DMP paying off £180 a month but not heard from them on default plans, if they continue to accept this amount I will continue it until they offer a default notice

3 loans combined 20k aim to default them and wait for them to sell off the debt and I paid off 60% off it (12k) saves me 8k

Now all I need to think about is do I include this in my DMP and offer them minimum amount so they default or just tell them I can't afford their minimum payment and get it defaulted

I just don't care that much on my credit file. I need the extra cash flow to do they things I need to get on with my life. Even if I clear off the debt by paying off the minimal payment after 2/3 years my with no savings I wasted 2 years of my life (mid 30s) missed opportunities for self investment/financial investment/traveling/entrepreneurial business ventures

ONLY CONCERN is if I default will these banks call bailiff to my house 

RAS

I'm not reading your screed as it appears to be based on your personal interpretations which may or may not be shared by your creditors. And even if your creditor agrees now, most will sell or assign the debt to another company.

If you are basing all your decisions on avoiding bailiffs, your basic premise is faulty.

You'll possibly get bailiffs for HMRC, CT and private debt. If those are an issue, they are priority debts an need addressing.

Bailiffs for unsecured credit are almost unheard of even if technically possible. Very few creditors seek CCJs. Even fewer try to enforce a CCJ, and then only if you refuse to pay the CCJ. And even then all you need to do is keep the doors and windows locked, cars away and tell them to leave. You have many, many opportunities to divert that process earlier.

So you are trying to avoid shadows.

The other false premise is that anyone other than yourself is suggesting you live like an anchorite.

Advice here always includes the setting up of a good emergency fund before the debts default, and sustainable provision for clothing, holidays, ents, medical and dental and renewal of emergency funds etc, before making debt payments. 

You are arguing with thin air.

Debtsolver33

RAS said:

I'm not reading your screed as it appears to be based on your personal interpretations which may or may not be shared by your creditors. And even if your creditor agrees now, most will sell or assign the debt to another company.

If you are basing all your decisions on avoiding bailiffs, your basic premise is faulty.

You'll possibly get bailiffs for HMRC, CT and private debt. If those are an issue, they are priority debts an need addressing.

Bailiffs for unsecured credit are almost unheard of even if technically possible. Very few creditors seek CCJs. Even fewer try to enforce a CCJ, and then only if you refuse to pay the CCJ. And even then all you need to do is keep the doors and windows locked, cars away and tell them to leave. You have many, many opportunities to divert that process earlier.

So you are trying to avoid shadows.

The other false premise is that anyone other than yourself is suggesting you live like an anchorite.

Advice here always includes the setting up of a good emergency fund before the debts default, and sustainable provision for clothing, holidays, ents, medical and dental and renewal of emergency funds etc, before making debt payments. 

You are arguing with thin air.

Thanks for your thoughts. Def don't want to live like an anchorite hence I now thought about defaulting some of my debt but need to plan for my future. 

Previous Plan I was able to the service debt and have a life before my redundancy.

Now -Based on the arrears and minimum payment it equates to my current temp pay minus the very basic living cost. I didn't want to default all due to the obvious issues in near future. Still may need a loan and mortgage one day in the next few years so don't want to shot myself in the foot completely.

I did think about an alternative option. The loans 20k would it be better to be included in DMP or just offer them £1 token payment so defaults them quickly and I would be paying them £1 each month so £3 month oppose to a larger sum from my DMP. Example I can afford £600 monthly to service all debts, as the loans are higher value so most of it would be allocated to them, lets say £400 and the remaining £200 would only service my credit card. If I was planning to only pay off a lower percentage of the loans then i guess it would make sense I paid them off as little as possible now

Whats everyone's thoughts on this?

Also to note I could be securing a job within the next 2 months that would increase my pay by £800 a month net.

ManyWays

No one here would suggest you live on nothing for 2 years.

Your starting point has to be what a sensible budget for the next few years looks like, can you go back to the SOA and have another go at that? Just expenses, not allowing for savings except a sensible amount for emergencies. 

Then you can look at your options. thinking about paying nothing and bailiffs and a future mortgage is not having your head in the right place; start from reality, then we can talk through your options.

enthusiasticsaver

Any defaults will affect your credit file and they take 6 years to drop off.  Token payments will take longer. I suggest you default on them all and do a DMP based on a sensible budget. Realistically with that amount of debt you are a long way off being able to take out a mortgage and buy a house so I suggest you focus on paying the debt off, living within a budget and saving for emergencies. Defaulting will freeze the interest so the debt does not increase.  

Debtsolver33

enthusiasticsaver said:

Any defaults will affect your credit file and they take 6 years to drop off.  Token payments will take longer. I suggest you default on them all and do a DMP based on a sensible budget. Realistically with that amount of debt you are a long way off being able to take out a mortgage and buy a house so I suggest you focus on paying the debt off, living within a budget and saving for emergencies. Defaulting will freeze the interest so the debt does not increase.  

Why default all of them when i can only default few to lessen the impact of the damage. When you say im a long way off paying off being able to take out a mortgage. How did you base this on, the amount of debt too much or you think it would take me 5years + to pay it off and accumulate a deposit? Just wanted to know if there was a set amount of debt that mortgage lender frown upon.

ManyWays

Defaulting them all will make little difference to your credit score compared to defaulting a few.  And going for them all will get interest and charges stopped across them all so you can clear the debts sooner and be able to save for a mortgage deposit sooner. A mortgage lender will dislike seeing 3 defaults in the past just as much as they will 10.