Need help getting out of debt cycle!!!

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/81912893#Comment_81912893

Thank you that's heartening to hear.

IWantaFreshStart2025

Thank you everyone for sharing their experience.

I just had a general question and apologies if it sounds daft.

On a debt of £6000 which has defaulted and sold on, to avoid a CCJ, is there a minimum amount you have to pay monthly? My strategy is to make minimum payments for a few years regardless of if I can afford to pay more per month later and wait for Final settlement offer.

Would £25 a month be too little?

sourcrates

County court judgement payments are decided by the same budget you are using now to determine payments to this creditor, payments are always set according to an individuals disposable income obviously, as everyone is different, and have differing incomes, there is no minimum amount to pay.

If you were paying £25 per month, and they took you to court, and obtained judgement against you, you would still pay the £25 regardless, as that is all your budget will allow you to pay.

IWantaFreshStart2025

https://forums.moneysavingexpert.com/discussion/comment/81914492#Comment_81914492

Thank your clarifying that. My partner has lost her job so currently I cover almost all the bills and get minimal help from universal credit.

Can I change the amount I pay depending on my disposable income with a standing order?

sourcrates

@IWantaFreshStart2025

Yes, you can do anything you wish in debt management, there are no rules to follow.

When you run your own debt management plan, its you that`s in charge of things.

You decide how its going to be run, who gets paid what, and when, not the lender.

IWantaFreshStart2025

I have received a letter from TescoBank asking me either pay the full amount or set up a monthly plan. Letter says they've sent me a default notice but I can't see a default on my credit report.

Should I ignore this letter and wait for the default to be registered or set up a payment plan?

20260317_113217.jpg

sourcrates

Up to you, Tesco will likely be looking to sell this on shortly though.

Its important to realise that a default on a credit agreement is a separate issue to a default on a credit file, the latter should follow the former, but there can be a time delay between the two happening.

IWantaFreshStart2025

https://forums.moneysavingexpert.com/discussion/comment/81931915#Comment_81931915

If I set up a payment plan now, wouldn't leave an Arrangement to pay marker on my file? I've read that lasts another 5 years plus 6 years for the deafult to be removed so a total of 11 years before I get a clean slate.

ManyWays

A payment arrangement means the debt stays on your credit record for 6 years after the debt is settled. This harms your credit score less as the 6 years progresses, and many lender (including mortgage lenders) may be happy to lend to you a couple of years after the debt is settled. Your actual credit score matters less than you think,

After a default, the debt drops off 6 years after the default date.

If there is a payment arrangement for a years and then a default, the rule about default applies and the debt goes 6 years after the default date.

If Tesco sell a debt in a payment arrangement on, a default is very likely to be added and you can complain if it is not added.
You can also complain if the debt is not sold and after 3 years there is still a payment arrangment, ask the lender to backdate a default.

sourcrates

You can`t have a debt default, and be marked as "AP", its one or the other, and the default marker takes precedence over all else.