Debt Advise

singh10

Hi all,

Looking for a bit of advice on my situation.

I’ve built up debt across a few loans and credit cards over time. A lot of it came from overspending on lifestyle/luxuries, and if I’m honest, probably linked to low mood at times—spending made me feel better in the short term.

Most of these accounts have now defaulted. At the time, I felt this was the only way to manage things, as keeping up with full payments wasn’t realistic alongside basic living costs. I’m now repaying what I can through payment plans. The defaults themselves don’t concern me too much, as I don’t own property and don’t plan to buy.

However, I still have accounts with PayPal and Klarna that may default soon. My main question is:

• Will additional defaults make much difference at this stage?
• Am I likely to be declined more often for things like car finance if these also default?

I’m also considering partially settling some of the smaller debts.

• Is it better to partially settle now, or wait until the 6-year mark?
• Does partial settlement improve things much, or is it not worth it?

Any advice or experiences would be really appreciated.

Thanks in advance 👍

fatbelly

If you have defaults already then an extra 1/2 won't make any difference

The defaulted entries drop off at the 6-year point regardless of what you do.

Between now and then a partially settled entry with 0 balance is going to look better than an unsettled one.

Bear in mind the better deals come on the larger debts. If you are looking for deals on debts <£1000 you may not find a lot of movement.

What percentage would you be looking at to settle the whole lot?

ManyWays

• Will additional defaults make much difference at this stage?

• To your credit score? Probably not as it must alreay be poor.

• Am I likely to be declined more often for things like car finance if these also default?
  It does not sound as though you can get car finance at a reasonable rate anyway?
  

• Is it better to partially settle now, or wait until the 6-year mark?
  the longer you wait, the lower you may be able to settle for.
  

• Does partial settlement improve things much, or is it not worth it?

• Settling a few small debts is not going to make much difference to your overall situation. I would say settle if you can get a low offer accepted.

singh10

https://forums.moneysavingexpert.com/discussion/comment/81964049#Comment_81964049

So i have a few £500 ones which i was going to offer 250 to partially settle.

1 loan at 6000 which i think 2000 is ok to settle. 2 credit cards similar to loan.

I also don't spend as much on luxuries and got help with overspending.

fatbelly

Give it a go. Use the National Debtline template

You may want to do cca requests first.