What are my Default options

Ching01a · 21 January 2020 at 8:52PM

Hi All,
In 2011 I took out a loan with HSBC whilst at Uni. In Sept 2014 I defaulted. The debt now at 5k was then sold into Cabot Financial, who have now offered 50% partial settlement. I have been making notional payments and understand the default will fall off my credit file in Sept this year.
Should I take the offer up to pay the £2.5k and if so:
1. How will it affect my credit score
2. Will the partial settlement drop off with the default to which it relates i.e Sept 2020
3. If it Stays on (partial payment mark) should I make the full payment or the partial.
4. Will waiting for the default to drop off and then settling help my case
The debt is from my Uni days and Im now able to clear it but the damage is done and my wife who has a clean credit file is not amused as we have saved up for a mortgage deposit.

Im all ears folks - Thanks in advance for your advice

MovingForwards · 21 January 2020 at 9:21PM

1. How will it affect my credit score
-- ignore your score, it's not seen by anyone but you and isn't used by financial institutions as they have their own internal scoring criteria.

2. Will the partial settlement drop off with the default to which it relates i.e Sept 2020
-- yes

3. If it Stays on (partial payment mark) should I make the full payment or the partial.
-- no need to pay it in full as the damage was done when it defaulted, leased over time that has gone on.

4. Will waiting for the default to drop off and then settling help my case
-- no

Have you written the standard letter asking them to show it's enforceable? ( Can't think what it's called but if they can't provide the info, they can chase you to pay it, but can't issue court proceedings - the template letter is on the debt boards)

Ching01a · 21 January 2020 at 9:45PM

Many thanks MovingFowards,

No I have not written the letter. I will look for the template to draft and send a letter out this asap.

Just to understand the credit file then, are you saying the when the 1 default falls off . Will mortgage lenders still see the adverse mark that would have fallen off. Or maybe the question should be, do I have a chance to get a highstreet bank mortgage with a previous default?

nic_c · 21 January 2020 at 10:13PM

If it is coming off in 2020 then there is no difference between paying full or a settlement, it will get marked as partially satisfied but comes off after September. So if getting a mortgage wait until after then

Is there a time limit on the offer, sometimes they may try an offer and if not issue proceedings for the full amount. It can be fine sending these letters, but if they come back with a copy of your credit agreement they may not be willing to settle for 50%. £5K is a sizeable amount and once they know it's enforceable may decide to not accept anything less than the full amount.

You don't know if the 50% offer is part of their normal pre-legal letters or whether it's because they are unsure it's enforceable. Can be a risk.

nic_c · 21 January 2020 at 10:16PM

Ching01a wrote: »

Just to understand the credit file then, are you saying the when the 1 default falls off . Will mortgage lenders still see the adverse mark that would have fallen off. Or maybe the question should be, do I have a chance to get a highstreet bank mortgage with a previous default?

Six years after default it falls off whether fully satisfied, partially satisfied, or still outstanding. It won't appear on your credit files after then but you may want to wait another month or two as credit files don't always remove them on time.

What are my Default options

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