CCJ or overdraft first?

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willstewart
willstewart Posts: 174 Forumite
in Credit file & ratings
Paid off my car loan a year or two ago. Or at least I thought I had.

Months later, I got a CCJ as I apparently hadn't paid 3 payments somewhere along the line.

About £500 to pay on this and I've a direct debit over £50 a month going towards this.

Also got an overdraft with my bank that costs around £50+ a month in charges.

I know you should pay the thing with the highest interest rate first, but if I were say to pay £100 a month off my overdraft, it would reduce it by say £4-£5 a month, which seems pitiful for the amount being put towards it.

I'm not sure if clearing the CCJ first (and then putting that £50 towards the overdraft) would be more prudent. Probably won't make the slightest bit of difference to my credit record, but at least that will be paid off and it would be one less payment a month going out.

Comments

  • twhitehousescat
    twhitehousescat Posts: 5,368 Forumite
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    if you fail payments on the ccj you will have bailiffs on your doorstep
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    Assuming you have an instalment plan to repay your CCJ, then if it were me, I would just stick with the instalments and clear the overdraft as that will save you money. Basically it is far more MSE to clear the overdraft first. Plus there is always the risk that your bank could withdraw your overdraft facility without notice.

    :)
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    I love my job

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  • sourcrates
    sourcrates Posts: 28,888 Ambassador
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    twhitehousescat wrote: »
    if you fail payments on the ccj you will have bailiffs on your doorstep

    Only if the creditor splashes out more money to instruct them.
    Your post should read “may” have bailiffs on your doorstep, most creditors won’t further enforce judgements due to the costs involved.
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  • xlnc99
    xlnc99 Posts: 1,673 Forumite
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    overdraft first - at you least can start reparing your credit file by clearing your OD as quickly as possibble. As you got your CCJ you cant do anything about it. Its on your file for 6 years now. You are stuck with it. Makes little difference if its paid of or not in terms of your credit file. Id stop paying your CCJ and put everything towards your OD and your other debts. Once you are debt free then id focus on the CCJ.

    Bailffs wont come round
  • willstewart
    willstewart Posts: 174 Forumite
    edited 26 January 2020 at 11:46AM
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    Thanks for that.

    The CCJ of £450 will be paid off by September, assuming of course I put nothing else towards it in the meantime.
    The £50/month I'm paying for that is an agreement, so I'll be sticking to that. Don't want to risk anything by changing amounts.

    Not sure exactly how much overdraft charges with Lloyds will change for me in April, so reducing it by £50/month at present. £100 off it this month, so hardly touching it, but it's better than nothing.
    Depending on what I get paid (varies each month depending on hours worked), may throw a little extra towards it as and when I can.
  • xlnc99
    xlnc99 Posts: 1,673 Forumite
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    Honestly -

    Dont bother with the CCJ yet. Clear the OD, put that 50 your paying a month towards the OD. You will save moeney in OD charges and help repair your file. Your CCJ will not be effected at all by this. Clear your OD then focus on your CCJ
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