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CRA and Full & final settlements
Marleysmum
Posts: 11 Forumite
I'm hoping someone might be able to give me some advice....
I ended up in debt some years ago due to being in a toxic relationship where there was DV, my then partner racked up a lot of debts in my name. Anyhow I found the strength to leave with my children and entered a DMP in 2011 owing approx £32k to 7 creditors (an IVA or bankruptcy wasn't an option due to my job). I now owe £8,836 and have approx 18 months to go before I'm clear.
The debts were a mixture of bank loans & overdrafts, credit cards and catalogue debts of which most were sold on apart from the bank debts.
6 of the debts have dropped off my credit file (however I'm unsure whether these were ever officially defaulted). 1 debt is still on my credit file as Arrow Global decided to retrospectively apply a default in 2018 - I took this up with the FOS earlier this year and they recently found in my favour, stating that the original catalogue debt should have defaulted back in 2012 and that the latter default applied by Arrow Global be removed - this should be removed any day now yay!
Anyway my question is that I have access to some money and I want to offer full & final settlement reduced offers shortly to my creditors - I want to ideally be in a position to get a mortgage next year with my current partner and I don't want the monthly DMP payment showing on my bank statements. I've read conflicting advice as to whether or not in the absence of an original default, the debts would reappear on my credit file with a note that it has been partially settled - obviously I want to avoid the debts reappearing on my CRA file albeit settled.
Can anyone provide any insight as to what exactly would happen?
I ended up in debt some years ago due to being in a toxic relationship where there was DV, my then partner racked up a lot of debts in my name. Anyhow I found the strength to leave with my children and entered a DMP in 2011 owing approx £32k to 7 creditors (an IVA or bankruptcy wasn't an option due to my job). I now owe £8,836 and have approx 18 months to go before I'm clear.
The debts were a mixture of bank loans & overdrafts, credit cards and catalogue debts of which most were sold on apart from the bank debts.
6 of the debts have dropped off my credit file (however I'm unsure whether these were ever officially defaulted). 1 debt is still on my credit file as Arrow Global decided to retrospectively apply a default in 2018 - I took this up with the FOS earlier this year and they recently found in my favour, stating that the original catalogue debt should have defaulted back in 2012 and that the latter default applied by Arrow Global be removed - this should be removed any day now yay!
Anyway my question is that I have access to some money and I want to offer full & final settlement reduced offers shortly to my creditors - I want to ideally be in a position to get a mortgage next year with my current partner and I don't want the monthly DMP payment showing on my bank statements. I've read conflicting advice as to whether or not in the absence of an original default, the debts would reappear on my credit file with a note that it has been partially settled - obviously I want to avoid the debts reappearing on my CRA file albeit settled.
Can anyone provide any insight as to what exactly would happen?
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Comments
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Settling the debt will not cause it to reappear. It will be removed from your credit file 6 years from the date of default, paid or not paid.0
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Hi Marleysmum and welcome to the forum
Your accounts cannot magically reappear on your credit files. Once an account has been removed, it is gone for good. If an account does reappear on one of your credit files, then you would be able to raise a complaint and have it removed from your file.
I'm not sure when you want to be applying for your mortgage, but you could submit a CCA request for all eligible accounts. The CCA request can take money months to be processed though. So you might not want to do that, depending on how soon you plan to get your mortgage. I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job
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Willing2Learn wrote: »Hi Marleysmum and welcome to the forum
Your accounts cannot magically reappear on your credit files. Once an account has been removed, it is gone for good. If an account does reappear on one of your credit files, then you would be able to raise a complaint and have it removed from your file.
I'm not sure when you want to be applying for your mortgage, but you could submit a CCA request for all eligible accounts. The CCA request can take money months to be processed though. So you might not want to do that, depending on how soon you plan to get your mortgage.
Why submit a CCA request when the only account that is still on their file has an FOS ruling stating that it shouldn't be there?0 -
Why a CCA request?
It’s not a loophole to get out of the debt0 -
Because Marleysmum can get an improved negotiating position if the creditors have not got the correct paperwork. An improved negotiating position = increase leverage = lower settlement figure = MoneySavingExpert result.Why submit a CCA request when the only account that is still on their file has an FOS ruling stating that it shouldn't be there?
See above. And it is not a loophole, because it is enshrined in law. The creditors have had ample opportunity to use the legislation in their favour...Why a CCA request?
It’s not a loophole to get out of the debtI work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job0 -
Willing2Learn wrote: »Because Marleysmum can get an improved negotiating position if the creditors have not got the correct paperwork. An improved negotiating position = increase leverage = lower settlement figure = MoneySavingExpert result.
See above. And it is not a loophole, because it is enshrined in law. The creditors have had ample opportunity to use the legislation in their favour...
The FOS have already said they need to get rid of the default. It really doesn't get much better than that.0 -
If you partial settle an account that has dropped off your credit file due to the six years it will not re-appear if you partially settle.0
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Thank you all for your advice & reassurance!0
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Thank you again to those who took the time to provide me with advice on this - I have an update and am in need of a little more advice.
Update: The default has now been removed by Arrow Global and I have sent CCA requests to all my creditors.
Advice needed: 3 of the creditors have replied already with standard letters saying that they are looking into my request - 2 of them have said that the accounts are on hold and they have had to cancel the arrangement that was in place.
I am in a DMP with payplan, obviously I don't want to stop paying entirely especially if they are able to locate the paperwork.
Has anyone got any wise words about how this can be handled with payplan - can I simply put the money aside that would have been paid to these 2 creditors in case they find the paperwork? Or will it have to be renegotiated?
Alternatively, should I just let PP keep on distributing the payments and send the 2 creditors a letter advising them of this?
Sorry for all the questions!0 -
If it were me, I would instruct PayPlan to suspend payments to all creditors from whom you are waiting for evidence of compliant paperwork. But I would deposit their payments in to an interest earning account. Then you will always have the money available to either recommence payments to creditors who have provided you with compliant paperwork or to make reduced F&F offers.I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job0
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