About to default on 3 debts - scared!

stressed_beyond_

Due to some pretty serious and traumatic life events I've come to the realisation that I've just been surviving, and yes, staying on top of my debts but it's not sustainable. I'm on UC now and applying for limited work capability and ADP.

Family issues, my own health, and addictions have all led to this and I'm exhausted and need to focus on improving everything without the pressure of full time work.

I've got three regular payments to loans and credit cards that are just too high to manage now. Probably about £11k altogether. I haven't got the exact figures to hand.

I have two other cc and a catalogue but the payments are lower so I'm planning to just keep on top of these and pay them down, then get rid of one cc. That way I've still got credit to boost my file.

I know from reading here that the best thing is to default rather than negotiate lower payments.

I'm freaking myself out. 

I'm 40. I want to own my own house one day. 

What if the defaults stop me renting should I get evicted?

I'm studying accounting, what if I can't pass the AAT fit and proper checks.

I'm really freaking myself out about all this 😔

sourcrates

Hi and welcome.

I assume you didn`t "freak out" about been able to rent whilst the debt was racking up, nor did the potential accounting checks stop you either, so my suggestion is to take the same attitude towards the solution, that you did to the problem, and then deal with matters if, or when they arise, to avoid further freaking out.

What makes you assume you will be evicted?

As long as you pay your rent, no one will be interested or looking at what`s on your credit file.

I can`t comment on the accounting, you have to decide which takes precedence, being able to manage financially now, or potential damage to your future career, remember, negative info only stays on your credit file 6 years, after that you are forgiven.

Lots of people in debt management rent, they seem to manage OK, I don`t see why you should be any different.

stressed_beyond_

Thank you.

To be honest, I've been worrying about this for a long time. I just got in a really bad cycle of trying to hold down a job, being unable to because of various reasons, exhausting myself, using credit to make sure I could cover everything, huge interest, etc...

Instead of just realising that if I'd taken a break when I needed it I might have avoided some of this. 

I think I'm just allowing my mental health to make me spiral worrying about my future. 

The main things are never being able to get a mortgage, if I need to find a new rental the check that landlords do, would it show defaults?

I know there must be accountants who have had problems in the past. This is all just alien to me because I've always paid everything on time. I'm finding it hard not to beat myself up.

sourcrates

Don`t beat yourself up, yours is a familiar story to most on here, no one gets into problem debt squeaky clean now do they.

Defaults stay on file for 6 years, and are then automatically removed, no one is condemned to be punished forever for making bad financial choices, so you can still get a mortgage in the future.

Landlords can either do a full credit check, which would reveal everything about your finances, or more commonly just a "landlord check" to confirm your identity etc, it would be a simple task to find out which would apply to you just by asking.

RAS

Landlords and EAs routinely use the public registries which show CCJs and insolvency. They can only see your credit record if you give explicit permission.

Your priority is to make sure the rent and CT are paid on time, then eat.

If you are doing AAT qualifications, you need to go to the professional website and read up on the fit and proper rules so you understand what's required.

One thing I would always say is that fit and proper checks require complete transparency. Having adverse credit isn't as huge an issue as failing to declare adverse credit.

stressed_beyond_

Thank you both.

I've had a few days to just come to terms with the fact that I can't pay these debts, and I'm not likely to be able to work for at least a few months. So it is what it is.

Of course once I've taken the exams for the AAT qualifications, if I apply for membership I will be transparent based on the questions. Life happens, I know it doesn't make me a bad person.

It's just quite scary, but I've now cancelled the three direct debits and I'll just sit tight and wait for the letters to start.

It's absolute madness to me that if I offered a lower payment now my credit file would be impacted longer.

Rob5342

stressed_beyond_ said:

Thank you both.

It's absolute madness to me that if I offered a lower payment now my credit file would be impacted longer.

Yes it is rather bizarre that the system encourages people to ignore debts until they default rather thsn engaging with the creditor. 

stressed_beyond_

Rob5342 said:

stressed_beyond_ said:

Thank you both.

It's absolute madness to me that if I offered a lower payment now my credit file would be impacted longer.

Yes it is rather bizarre that the system encourages people to ignore debts until they default rather thsn engaging with the creditor. 

Yes absolutely. If I thought that staying in touch with them would help me repair my credit file faster I absolutely would. But I have to put myself first here I guess.

tigergambit

I have AAT level 4. Nobody ever asks about finances other than bankruptcy, so you can stop worrying about that for starters.

How large are the debts on the other CCs and catalogue?