Defaults and Bankruptcy

[JohnnySocrates]

I have a question...

 

If default notices are so difficult to remove, as looks the case reading the threads on this forum, then having been issued with one or more is there a strong argument to be made for just moving straight to bankruptcy?

 

They both appear to rubbish your credit file for 6 years. I know in bankruptcy I would have restrictions for a year but the debt would be cleared. If I didn't go through bankruptcy then I could still be chase and even if I settled through a full and final offer (using the lack CCA as leverage) my credit report would be rubbish for 6 years.

 

Is there much of a difference on the credit file between these options or not?

 

Does anyone have any experience, advice or thoughts on this?

 

I'm trying to decide what route to go.

[BankFodder]

If you have no assets then bankruptcy may be a very sensible way to go. There is a stigma about it and an admission of defeat about it which makes it a very difficult step for many people

[JohnnySocrates]

I can understand the 'stigma' comment, it does have that feeling for most people but 'an admission of defeat' sounds a little off the mark. The situation that leads to bankruptcy is not always in an individuals control.

 

I guess what I'm trying to bottom is in general terms if you get a number defaults on your credit file is having bankruptcy on it worse or the same it terms of moving forward.

[IdaInFife]

not really as they both sit there for 6 years and i suppose itwould be a bit better if the defaults were satisifed.

 

so it would really dependant on how new or old the defaults were

 

ida x

[Moonlighter]

Please don't make this decision on your own - there are plenty of people out there who can give you guidance based on your own individual circumstances, at no cost to you. You've taken the first step by researching some of the options but I'd recommend that you now seek advice from a local Insolvency Practitioner or money advice centre.

 

You haven't mentioned the option of a Trust Deed which falls in between full bankruptcy and debt repayment/settlement. It definitely helps an individual come to a decision having discussed their situation with a trained adviser.

 

Good luck.

[JohnnySocrates]

Thanks Moonlighter, I have looked into the options in great detail as my research and deliberations span a 6 months period.

 

I'm in a position were I may be able to pay all my creditors an amount as a full and final payment but to me this would only make sense if it improved/fixed my credit file. I would prefer not to go down the bankruptcy route as it does present a year of restrictions but handover £,000's of pounds to creditors to get a benefit from doing it.

 

Ida - the defaults are between 1-3 months old so no real term difference over the 6 years.

[Moonlighter]

There's a link on this site to a style letter to creditors which stipulates that acceptance of the full and final settlement is subject to the creditors agreeing to marking the debts as having been settled on the credit reference agency files. You might want to check that out too.

 

Kind regards.

[JohnnySocrates]

Thanks Moonlighter, I have seen and used some of the great templates on the sites. I've sent F&F offers and CCA requests in the hope the offers will be looked at more carefully but this is not currently the case.

 

In terms of 'marking the debts as having been settled...', I understand this is the case - I think it gets marked as 'satisfied' or 'partial satisfied' depending on what you can get the creditors to agree to. However, I believe that 'Defaults' can only be removed by the organisation that addes them so when a debt gets sold on I assume the default can no longer be removed - Anyone comment on this?

 

I think for me also I would need to get my creditors to all agree to accepting a full and final offer or again what would be the point? It's not like you can go semi-bankrupt.

 

For me if the defaults have little or no chance of being removed completely then in paying out £,000's of pounds to creditors would not help as over the next 6 years my credit file would show 1 or more defaults so no credit.