Numerous Credit Card debts and CRA's

[wpgore]

Hi All

I am seeking advice on the best way to repair mine and my wifes credit file's.

In July 2009 I was involved in a RTA and suffered a serious head injury ( I was in an induced coma for a week and then suffered mild brain damage). At the time I was a Director and shareholder of a Company , on hearing the news the Companies Bank (HBOS) pulled the finances due to a covenent breach 5 weeks later, as a consequence I received no pay and didnt start work until April 2011.

At the time my wife didnt work due to a young child.

As a consequence of being a shareholder it turns out that the MPI we had with the Halifax was not valid and after 6 months we ran out of savings and fell behind with the mortgage payments. We got the mortgage arrears paid off by October 2011 but Halifax have declined an additional mortgage advance (to pay of the other debts below).

Egg - I have a debt with Barclaycard of 12k ( I purchased some equipment for work as the Company had suffered during the Downturn in 2008/9 that hadnt been repaid , but the liquidator BDO failed to notice the title documents when selling on the assets , yet another battle in progess). The card was taken out in 2004 online and has some PPI in the debt. The debt was defaulted in October 2009 as my wife failed the security questions and I had no idea what day of the week it was. I am currently paying Moorecroft £10 per month and there has been no entry on my CRA file since , I assume that this will drop of my file in Nov 2015.

Is it best to settle now , wait until 2015, pay in full ?

I have bought a car on credit with Close Motor finance ( high interest rate ) and a credit card with Vanquis which is normaly settled in full each month.

My wife had a credit card with Barclaycard (opened in 1999) with a debt of £10k which was never marked with a DN but lots of red with a 6 until October 2010 when marked with a Settled as the debt was sold to Cabot. Despite the normal promise of no adverse reflection on her CRA it was marked as AP from Jan 12 to April 2013 and has been marked as uptodate since then.The debt stands at £9k and once again I would like advice as to when this would be deleted from her CRA , do we offer settlement now ? later ?.

She also has a CC with John Lewis (opened May 2006) with a debt of £4k which was DN in March 2010. again she is paying a nominal amount . again do we offer settlement , pay in full etc , Now later ?.

All of our other debts have been repaid in full on time , but neither of us are able to obtain normal credit terms , even with the Halifax Repayment Mortgage which we have had for 10 years with 10 years left with 70% equity !!!

Any advice of the best way forward would really be appreciated , we have no desire not to repay the debts in full BUT ...

Many thanks

[FlamingParrot]

Re: Numerous Credit Card debts and CRA's

One thing to be aware of is that, once a default is recorded, it will stay on record for 6 years, regardless of whether the debt is repaid or not. It's not fair on those who do pay, but that's the way it works.

The argument is that the default reflects your conduct with the account and if you didn't keep up your contractual payments, that should be reported to the CRAs.

If a debt is repaid it would show as settled or satisfied, but the default would still stay in place for 6 years. If the creditor accepts a reduced settlement, it would normally be marked as partially settled. In any case, defaults stay in place even if debts are repaid.

[wpgore]

Re: Numerous Credit Card debts and CRA's

In the case of Egg and John Lewis would you wait until the 6 years and pay , either in full or part, I assume that once the 6 years have expired it cant come back and bite me.

I the case of Barclycard/Cabot the AP would not go off her account until May 2019 , this is some 10 years after she stopped paying and seems unfair , reading the various forums we can also expect them to ramp up the pressue at some stage ?

Thanks for the quick reply

[FlamingParrot]

Re: Numerous Credit Card debts and CRA's

In the case of Egg and John Lewis would you wait until the 6 years and pay , either in full or part, I assume that once the 6 years have expired it cant come back and bite me.

There can only be a single default recorded for each account, and the original default date is where the 6 years start to run, once the default drops off it will never re-appear.

I the case of Barclycard/Cabot the AP would not go off her account until May 2019 , this is some 10 years after she stopped paying and seems unfair , reading the various forums we can also expect them to ramp up the pressue at some stage ?

APs can be an issue, you may want to look at the Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies, in particular:

If you offer or make a reduced payment, how it is reported will depend on whether it is agreed with the lender.
Agreed reduced or revised payments

If, due to financial difficulty, your lender agrees a reduced or revised payment with you, this will be reflected on your credit file. How revised or reduced payments are shown on your credit file will depend on whether it is a temporary or permanent change to the agreement. The account may or may not be in arrears at the time of the change.

Should a permanent change in the payment terms be agreed by the lender, there will normally be a new agreement signed and the revised terms will be reported going forward. This may mean that a new limit, account and/or term is shown on your credit file and performance will be reported against that going forward.

As long as you comply with the revised terms, arrears will not accrue further or be shown although any arrears reported under the previous terms will stay on your credit file.
Should a temporary reduction in the payment amount be jointly agreed between you and your lender, this 'arrangement' will be recorded at the CRAs. This may also occur if there is a temporary change in terms (that is not part of the product) such as a payment holiday or change to interest only.

Depending on the period and amount of the arrangement, arrears may continue to be reported. Such temporary arrangements may last for some time but are generally expected to revert to the contracted terms at some future point. For such accounts arrears may continue to be calculated in accordance with the contracted terms.

The record must show that the account is the subject of special terms. The reporting of this fact may be different depending on the product and the CRA. It is important that you are made aware w hen such arrangements are made and maintained, that it will show on your credit file and that whilst arrears may accrue and increase, a default will not be recorded.

Following a satisfactory period of payments under a temporary arrangement, and if the lender agrees, the status on your account may be set to zero; although the history will remain. This can be described as capitalisation, re-scheduling or re-aging. Depending on the product this could result in adjustments to how your account is reported on your credit file e.g. the payment amount, repayment period as well as the status. Should you make full payments from this point onwards your acc ount will be classified as being up to date.

If after a period of time a permanent change in terms on an account occurs then if appropriate, the revised terms should be recorded at the CRAs and payment performance calculated against the new terms; in such circumstances there will no longer be an arrangement in place.

If your lender agrees to give you a temporary arrangement, but you fail to make the agreed payment against the new terms, they may still file a default (see Principle 4 below) as soon as a payment is missed, as long you were at least 3 months in arrears on the original agreement.

[wpgore]

Re: Numerous Credit Card debts and CRA's

Many thanks , I will do some research on the AP and sort out any paperwork that was sent to my wife , not sure how explicite the explination from Cabot was , there reputation preceeds them..

Many thanks for your time tonight

Regards