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lamentableloaner

Clarification questions on handling my debt

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Hi all,

A quick hello from myself as I am brand new to this forum :)

I hope you can help me along my journey to trying to sort out my debt.

I am micro-analysing my current circumstances and aiming to find the lowest lost/lowest impact solution

.Let me just give you a brief overview of my debt outstanding (it used to be more but paid some off).

Firstly I have no CCJs which is great.

 

1 x Bank overdraft (student) of £2389 that I defaulted on in September 2010 due to expire in September 2016.

 

1 x Hire purchase default of £2254 that I defaulted on in March 2011 due to expire in March 2017.

 

10 x pay day loans of £4062 (in total) that I defaulted mostly on within the last 2-3 years.

 

The crux of my issue is that I got a bad credit rating with various student credit cards

and the subsequently the overdraft and the hire purchase agreement.

Therefore resorted to a bunch of pay day loans and it spiralled from there.

 

My current situation is that I have a well paid job and trying to get rid of this financial voodoo once and for all

so that one day within the next two years I can make start thinking about buying a place to live rather than renting.

 

I probably have capacity to pay off £300-£500 a month without losing sleep and a bit more with a bit of discipline.

I have done a fair bit of reading already on various forums and would like some perspective of my apparent findings.

Could someone respond on the following points?

 

1) I have read that all defaults (including defaults) expire after 6 months. Is this correct?

If so is all trace of it ever existing removed from your credit record

and thus would I expect to see my credit score improve when it does?

 

2) If point 1 is answered yes, I think it makes sense to pay of my pay day loans of £4062 first

then worry about the overdraft and the hire purchase (in that order).

 

3) What would happen if I started a payment plan on the student overdraft before the expiry date then the expiry date hits?

Could they put a fresh default on my account or update the original?

I am trying to decide whether it financially makes sense just to wait till it expires all together.

 

Any implications credit file wise are much appreciated.

 

4) My biggest outstanding payday loan is with Lending Stream who allowed me to borrow £1600 worth of loans on 3 separate accounts

while the others were still outstanding.

 

 

Do I have any legal re-course that I could argue to have these debts written off or reduced without impacting my credit file?

(I am thinking of the impact of a partial settlement versus a settled account)

 

5) Is there much difference from a credit scoring perspective between a partial settled account, fully settled account and a default?

 

Sorry for the amount of info but I hope this encourages a meaningful response

 

 

. Thanks in advance guys!! (and ladies)

Edited by lamentableloaner

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I have popped some spacing and formatting into your post to make it easier to read :)

 

1: Defaults don't expire for 6 years - where on earth did you hear 6 months ??

 

2: As I didn't answer yes to question 1 - this is largely irrelevant. PayDay loans, whether or not the debt was cleared according to contract or defaulted have the ability to absolutely crash your credit file for 6 years. Mainstream lenders do NOT like to see these at all.

 

3: You can only be defaulted once on each account, although it will be updated on your file every month for 6 years, whether you repay the whole debt in full or not.

 

4: You might be able to take this situation with Lending Stream up with the Financial Ombudsman. If they allowed you have so much credit whilst it was obvious you were unable to repay then this is irresponsible lending. You might want to read up on the FCA's action against WONGA. If you made Lending Stream aware of your true financial position, then you might be able to negotiate a deal in settlement. Don't hold your breath though.

 

5: I don't think it makes any difference, whether you have a partially settled or fully settled.. if the account was defaulted it will trash your credit file for 6 years.


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Reading your post again it looks like your Credit file might start to improve after 2017, but because the PDLs wont drop off for at least another 2 years after that, it might still be stuffed.

 

Are you making any payments at all to these debts ?

 

.


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I have popped some spacing and formatting into your post to make it easier to read :)

 

1: Defaults don't expire for 6 years - where on earth did you hear 6 months ??

 

2: As I didn't answer yes to question 1 - this is largely irrelevant. PayDay loans, whether or not the debt was cleared according to contract or defaulted have the ability to absolutely crash your credit file for 6 years. Mainstream lenders do NOT like to see these at all.

 

3: You can only be defaulted once on each account, although it will be updated on your file every month for 6 years, whether you repay the whole debt in full or not.

 

4: You might be able to take this situation with Lending Stream up with the Financial Ombudsman. If they allowed you have so much credit whilst it was obvious you were unable to repay then this is irresponsible lending. You might want to read up on the FCA's action against WONGA. If you made Lending Stream aware of your true financial position, then you might be able to negotiate a deal in settlement. Don't hold your breath though.

 

5: I don't think it makes any difference, whether you have a partially settled or fully settled.. if the account was defaulted it will trash your credit file for 6 years.

 

Hi, I'm really sorry for the first post I did mean to say 6 years but hopefully the context from the rest made sense.

 

I am in the middle of paying the pay day loans and hoping by year end I will have settle the full balance. Do you know if showing settled has much impact on your credit score versus a default?

 

Thanks

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if its defaulted wont make a blind bit of diff.

 

 

as wont going for a short settlement

that partial settled marker will kill you just like a default.


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Hi,Sorry I don't know what happened with the original post. It was all nicely formatted.

 

I should have typed in 6 years but hopefully the language in the rest of the message made it clear that I realised it was 6 years rather than months.

 

Thanks for the feedback thus far. After I did some further reading it does seem that the fact you defaulted at all is pretty much a match loser in that sense.

 

However I did some further reading last night online and it seems the status of each debt i.e. satisfied etc. is essentially a flag in the system.

 

 

Therefore most credit checks by potential lenders tend to look for these flags and prompt a manual review of the credit file in question.

 

 

Subsequently it seems the status of these flags can be used as part of the manual review process.

 

 

Such that at least if you have paid them off it will look more favourable in a manual review than if you have not.

 

I had two further questions....

 

1) Do you have any thoughts/comments on the item I mentioned above?

If so although perhaps not with the big preferable lenders do you think some form of credit might be available to someone who has at least paid off all past debts?

 

2) Is there much benefit in your opinion if you can get one of these credit file re-building credit cards such at Vanquis etc

while there are any defaults to at least start getting some positive lending history on your report?

All views appreciated!!

Edited by lamentableloaner

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Regarding your payday loans, can you pop a thread in the correct forum for each one, and myself and others will be able to advise you on if what they have said is enforceable, and if the amounts are, how to start negotiating or sorting them out. You shouldnt ignore them, as many DCA's will either sell them on to DCA's that will take legal action, or will try it themselves.

 

Regarding vanquis, stay WELL AWAY from them. No matter what. There is absolutely zero point to getting a credit rebuilding card or anything of the sort until you have sorted out your credit file as it is. It wont do a single thing for your record until your file is cleared up.


Any advice i give is my own and is based solely on personal experience. If in any doubt about a situation , please contact a certified legal representative or debt counsellor..

 

 

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If you have repaid your debts and you are just waiting on them to drop off your Credit file, then you could possibly speak with your bank and ask them to do a manual review rather than automated.

 

I am not saying that they WILL reverse their decision, but they MIGHT.


Have we helped you ...?         Please Donate button to the Consumer Action Group

 

Uploading documents to CAG ** Instructions **

 

Looking for a draft letter? Use the CAG Library

Dealing with Customer Service Departments? - read the CAG Guide first

 

1: Making a PPI claim ? - Q & A's and spreadsheets for single premium policy -

HERE

2: Take back control of your finances -

Debt Diaries

3: Feel Bullied by Creditors or Debt Collectors?

Read Here

4: Staying Calm About Debt

Read Here

5: Forum rules - These have been updated -

Please Read

 

 

BCOBS

 

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

 

 

 

Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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Sorry for the slightly lagged reply guys.

 

 

I appreciate all the info so far.

 

 

I have taken on board the advice to post about the individual pay day loans that I have outstanding

and have started to do so in the Payday loan sub forums.

 

 

I have just posted about Lending Stream in the last few minutes and will try to add the other stories later today.

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In regard to HP debts.

 

Don't make the mistake I made.

 

I bought a caravan on HP and sold it - I had paid half the debt off, and could have let them take the caravan back because of this, which would have cleared the debt.

 

However, I ended up paying off the rest of the HP loan because I had sold it, and had to make up the shortfall.

 

Lesson learnt.

 

ho hum...

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