Default dated AFTER debt management began???

[beccyliz]

On 12th Feb 2008 I took out a debt management plan with Churchwood Financial to cover all my loans/credit/overdrafts etc including 2 accounts, a loan and a credit card with HSBC after finding myself unable to meet repayments and receiving letters from debt collection agancies. I have been making the agreed repayments every month without fail since then
It is now vital that I get a mortgage to buy out someone else's share of my house or I will lose my home (long story) and after discussing this with Churchwood I was informed that after 6 years from the default date these debts would be removed from my credit files, which would make getting a mortgage a realistic possibility.
However after checking my credit file, some of my debts list the default date as late as September 2009!!! How is it possible for the default date be 18 months AFTER I made the arrangements to cover the same defaults???
So confused and having panic attacks and not sleeping over fears of losing my home......
Can anyone advise me please?

[labman]

Re: Default dated AFTER debt management began???

Hi and welcome to Legal Beagles.

This may not be what you want to hear, but if you are in a DMP, it is because you have debt issues. The defaults will fall off your credit file 6 years after whenever they were put there, but the underlying debt remains and needs to be paid.

Do you really think taking on a further considerable debt (if you can get it) is realistic or sensible? Have you thought of selling your share of the property as well and moving somewhere more affordable until your financial situation is more stable?

Obviously without knowing all the details of your income and expenditure, it is difficult to comment accurately, but your initial post suggests there are still debts remaining outstanding. Really your aim should be to repay these rather than take on further commitments you may well not be able to meet.

Talk to your DMP provider, but bear in mind they already take a chunk of money from you each month to do something you could easily do yourself. This would repay your debt faster.

[FlamingParrot]

Re: Default dated AFTER debt management began???

On 12th Feb 2008 I took out a debt management plan with Churchwood Financial to cover all my loans/credit/overdrafts etc including 2 accounts, a loan and a credit card with HSBC after finding myself unable to meet repayments and receiving letters from debt collection agancies. I have been making the agreed repayments every month without fail since then

Churchwood Financial are a commercial debt management company who, according to their own website, charge a whopping 17% (so childish to use 16.99% :rant) of your payments as a management fee! That's money that could either have gone to your creditors or used for yourself and your family. They also charge an undisclosed set up fee: http://www.churchwoodfinance.co.uk/d...gement-fee.asp

Please note that as the initial fee is not paid to your creditors, you will go into (or further into) arrears which may affect your credit rating.

2) The monthly management fee
This amounts to 16.99% of your monthly payments into the plan. The minimum payment is £37.50 and the maximum £100.

You should really be looking at alternatives to paying a company to manage your debts. Depending on your circumstances, the amount outstanding, how long it would take to clear your debts, how manageable your payments are, the nature of your debts, etc. you have a few options you may wish to consider:

1. Self-managing your DMP. You'd be surprised how many people do it, and if your creditors have all already agreed a level of repayments, there's no reason why you can't just keep that up without the need for a greedy third party.
2. Using the services of a free DMP provider, such as Payplan, Stepchange, etc. There are some lesser known ones as well.
3. You could also consider asking your creditors to provide you with copy of your credit agreement and see what they come up with. This could work remarkably well coupled with option 1, where you keep making payments to those who produce enforceable paperwork. As you have already been defaulted, no further defaults would be added. :thumb:

It is now vital that I get a mortgage to buy out someone else's share of my house or I will lose my home (long story) and after discussing this with Churchwood I was informed that after 6 years from the default date these debts would be removed from my credit files, which would make getting a mortgage a realistic possibility.
However after checking my credit file, some of my debts list the default date as late as September 2009!!! How is it possible for the default date be 18 months AFTER I made the arrangements to cover the same defaults???

According to the ICO guidance, defaults should be recorded between 3 and 6 months after your first missed payment. Sadly these are just guidelines and do not have the force of law. :mad2: It's not uncommon for people entering into DMPs to be defaulted much later than if you just stopped paying, I realize it doesn't make sense, but that's just the way it works.

[FlamingParrot]

Re: Default dated AFTER debt management began???

On 12th Feb 2008 I took out a debt management plan with Churchwood Financial to cover all my loans/credit/overdrafts etc including 2 accounts, a loan and a credit card with HSBC after finding myself unable to meet repayments and receiving letters from debt collection agancies. I have been making the agreed repayments every month without fail since then
It is now vital that I get a mortgage to buy out someone else's share of my house or I will lose my home (long story) and after discussing this with Churchwood I was informed that after 6 years from the default date these debts would be removed from my credit files, which would make getting a mortgage a realistic possibility.
However after checking my credit file, some of my debts list the default date as late as September 2009!!! How is it possible for the default date be 18 months AFTER I made the arrangements to cover the same defaults???
So confused and having panic attacks and not sleeping over fears of losing my home......
Can anyone advise me please?

First of all, don't panic! :hug: There's always a solution to every problem. :thumb:

Would be good if you could give us a bit more details with regards to this mortgage/house issue, maybe on a separate thread here: http://www.legalbeagles.info/forums/...surance-Issues

[labman]

Re: Default dated AFTER debt management began???

If you change to a free DMP provider, I would VERY STRONGLY recommend doing it yourself via NEDCAB:

http://mymoney.nedcab.org.uk/moneyadvice/dmp.asp

There is a reason for me recommending them in particular at the moment, as long as a DMP is the right thing for you. If you need to check whether this is the case, I'm sure if you contact Celestine, the site owner, she will be able to put you in touch with someone who could go through your options free of charge.

[lexis200]

Re: Default dated AFTER debt management began???

Hi

I can't comment on the DMP thing as I have no idea, but you could try Platform for a mortgage? I understand labman's concerns, but our rent for a tiny house cost us over £900, whereas our mortage for our home is a little over £500. If I had the option of moving to rented or staying put if I could get a mortgage it'd be a no-brainer for me. This may well not be what labman was suggesting, but if it is, that's my two-penneth

We were renting as we thought we had no hope of getting our own place. OH had about 6 defaults (long story, all the usual, illness, job lost etc), and we got a mortgage with a higher, but not astronomical 5.6%ish rate from them. If memory serves, we just had to wait until the newest one was a year old, so '09 should be enough. I don't think you can go direct to them, but I may still have the details of the company we used if it's of any help.

And just as a bit of light at the end of the tunnel stuff for you, OH still has 2 defaults showing which are due to run for 18m/2y, but he has just got a 123 account approved with Santander after explaining the circumstances of the defaults. It went to the underwriters and they said ok. Off the back of that, they've said we should be able to get their mortgage with a 2.9% rate as long as OH can show 3 months of pay slips and bank statements. Unfortunately due to an ongoing grievance at work regarding bullying and SSP we can't do it yet, but come Christmas we should be able to - sooner if they issue backpay which our sol says they bl**dy well should. Or words to that effect.

I hope you are able to sort this out. Worrying about this stuff is the pits.

[FlamingParrot]

Re: Default dated AFTER debt management began???

On 12th Feb 2008 I took out a debt management plan with Churchwood Financial to cover all my loans/credit/overdrafts etc including 2 accounts, a loan and a credit card with HSBC after finding myself unable to meet repayments and receiving letters from debt collection agancies.

It would be useful if you could tell us a bit more about these debts, such as:

• Original lender (bank)
• Current owner (DCA if sold to one)
• Type of account (O/D, credit card, loan)
• Outstanding balance
• Start date (when you took out the card or loan)
• How much you are paying every month towards them