Debts/Credit/Mortages!

GameOver_2

Hi

What a great forum this is! I am hoping to get some good/positive advice back if i can.

I am 22, i am in debt £11,500 - all unsecured. I have not paid anything to my debts for 3 years (ive not been working due to illness), but i am going for jobs now, that pay around £2000 a month, for the time being, my partner earns a good living, and she has agreed to help me with this, as i want to buy a property shortly, bankruptcy is not an option, but i am thinking IVA instead, can you answer the following please guys.......

1, If the insolvency company can reduce the debt by around 75%, leaving me with around £3000 debt, can i pay the £3000 off over the next few months and be done with all the debt? I dont want the IVA over 5 years, as i want to pay off my debts and get a mortgage to buy a home.

2, What affect will an IVA or admin order have on my credit file? All my debts on my credit file have defaulted, but there all pretty old. I really want to get on track.

3, Once the IVA is paid, will the paid debts go on my credit file as satisfied and my rating go up?

When my debts are paid i will get a capital one card (by paying a deposit), and i will pay it on time to get my credit up.

Thanks

Matt :beer: :j

garyclay

To be honest an IVA is going to seriously damage your credit score with all th 'prime' (high street) lenders.

If you set up an IVA when you reach the end of your payment plan it could remain on your file for up to 6 years depending on how the lender treats it. Defaults remain on file for six years regardless of whether they are paid or unpaid (settled).

For the time being (and for foreseeable future) your only mortgage lending option is the 'sub-prime' market, the likes of Kensington, GMAC, etc. They will consider lending to people in your circumstances but varies person to person depending on the case. Doubt they will consider you with unsatisfied defaults so I think you would be better of paying them off through a DMP or IVA etc.

I suggest you read through this board and read the thread about the 'six year rule' and anything about defaults.

How have you fended your creditors off so far?

GameOver_2

Hi mate

Thanks for your reply, and thanks for replying in a nice way, as negativity wont help me right now, i totally agree with you, the main banks etc wont give me a mortgage even with my debts all settled until after the 6 year period.

I wouldnt mind getting a mortgage with companies like you mentioned, and Northern Rock maybe?

If i could go back to being 18, i wouldnt touch credit with a bargepole, i have well and truely learnt my lesson, the hard way, as now my credit is damaged.

So if i got an IVA, what exactly would go onto my credit file that lenders would see it as being an IVA?

I have read through the boards (not all of it), but about IVA's and the 6 year rule, but my situation is slightly different in the fact i want to pay it off asap, and get a BTL mortgage.

Do you think i should get a Capital One card now? I can pay the £200 deposit, does it matter how much i spend on it to get my rating up? What if i just spent £20 a month on it on petrol and paid the bill on time? Would that still count for a better rating?

Is there a way that i can get the 75% or more off my debt without an IVA? They may take it because they havnt got anything for 3 years?

Ive just said i cant pay it now etc and stalling and ignoring them for the 3 years.

Thankyou

Matt :beer:

Willsnarf1983

my only worry for u is that if u havn't paid them for three years ur credit rating shud be shot to !!!!!! by now so how ur gonna get a mortgage with a decent rate will be interesting.

have u tried getting a credit report from experian or the others?

ok now what i am gonna say is abit contentious...do u not feel an obligation to pay the FULL amount of what u owe? i know u have been ill but why only pay 1/4?


also how long have u been trying to get a job? if its been a fair while maybe aim for a lower paid job for now and work ur way up again, to be getting 2k month at ur age wud be impressive.

ok so it wasn't my only thought lol


good luck mate


Will

GameOver_2

Hi mate

You make some good points, i dont have anything to hide and i will be totally honest, im the one needing help here.

The jobs im going for are lorry driving jobs (Class 1), most of them pay well like that, some are £400 to £500 a week. Ive only been going for them for 4 weeks.

No, i do not feel obligated to pay them in full, as most of that £11,500 is interest that they have stacked on, or for charging me £5 for them to send me a letter etc, my debts are little ones like £250 CC bill, £300 for littlewoods etc, my only real big debt is £5000 car finance (they took the car back, and sold it to pay some of the debt), i even owe barclays £70. So there all little debts apart from one, its time to sort them out once and for all, and to be more responsible with credit in the future.

My mother who has squeeky clean credit, lots of past credit - never missed a single payment, has agreed to be my guarantor for a mortgage (providing im in full time employment, which ofcourse is fair).

But before i go off and get a mortgage with anyone, i would like to have my debts under control and paid off so i can start from the bottom and work my credit up.

Can anyone here help me without an IVA? I have a capital one bill (passed on), the debt was £200, now its £650 (interest), thats why i dont feel obligated to pay full, if i can get the 75% or 80% off my total debt, they will almost be where they should be 3 years ago.

Thanks

Matt :beer:

eurows

Good god man. Get real. Pay your debts first. Then get a mortgage.

Or why don't you borrow as much as you can. Then hibernate until all your creditors are retired. Come out of hibernation and get more credit.

Similar to what you have done up to now.

GameOver_2

"Good god man. Get real. Pay your debts first. Then get a mortgage."

eurows - please go back, and re-read my posts, thankyou.

Can anyone help me positivly?

garyclay

I've got no problems with you paying back 25% I don't think we should be taking any moral high ground here!

If you are going to get your mum to guaruntee the mortgage then you'll need to do it through a broker or branch as the standard form won't do alternatively have your mum apply for the mortgage and once she secures one have a solicitor add you to the deeds. The second method will get you the best 'high street' rates, but probably won't be approved if she has her own mortgage payments to meet. In this case an IVA will have little or no impact.

As far as your debts go I'd talk with the CAB or National Debtline and see what they reckon, these people are professionals and are better placed to evaluate your circumstances. An IVA can be a good option in some cases and yours is probably one considering the level of debt and the huge charges you have had added.

Anyway hope this helps and good luck.

GameOver_2

Thanks mate

Do you think companies are going to take 25% of my whole debt?

Matt

newmum1

hi there ring around the companies to see what they would be willing to take off your debt you may be surprised. before trying to get a mortgage get your debt under control so that you know where you stand financially. it may be hard as you have not made any payments for three years and it may be tough for a while yet but keep in there, im assuming that your are claiming benfits as yr not working would they be willing to freeze the interest, try speaking to them.

ms_london

GameOver wrote:

If i could go back to being 18, i wouldnt touch credit with a bargepole, i have well and truely learnt my lesson, the hard way, as now my credit is damaged.

So was all of the debt run up between the age of 18 or 19 then? Or did you spend whilst you were off ill? If the latter, then I think its unfair to expect your debts to be written off since you were spending on them whilst you knew you had no income. Of course, you couldve run the debt up in that one year?

I dont think that people truly learn the lesson until they have PAID OFF the debt, not when you're still in debt. Yes your credit rating might be damaged, mine too, but why would you want any more credit anyway?

You are only 22, the same age I was when I couldnt get any more credit & had to wake up to my debt. You have plenty of time to pay what you owe off & learn from it.

Sorry to be harsh, but it doesnt sound as though you have "learnt the hard way" at all.!!

Ms_London