Credit Card default notice/6-years/solution??
Discussion
Hi all,
A relative of mine has asked if I can "lend" them money to pay off Credit Card debts (over c.38k)
5 cards in total and 5 household names.
Is there a way in which a deal can be done (with the CC companies/banks) that involves paying off the debt in full and in turn the CC companies remove the default notices on the credit files/ask the credit agencies to remove the existence of the default notices? Thus, not having a Default Notice on file for 6-years worth all the headaches that has attached...?
The approach cannot be seen as blackmail, but more along the lines of a relative will pay off the debt but would like to see the Default Notices removed.
I'm able to help, and I will regardless, but I'd just really like to know if anyone has had experience in this area or knows if it is even possible?
A relative of mine has asked if I can "lend" them money to pay off Credit Card debts (over c.38k)
5 cards in total and 5 household names.
Is there a way in which a deal can be done (with the CC companies/banks) that involves paying off the debt in full and in turn the CC companies remove the default notices on the credit files/ask the credit agencies to remove the existence of the default notices? Thus, not having a Default Notice on file for 6-years worth all the headaches that has attached...?
The approach cannot be seen as blackmail, but more along the lines of a relative will pay off the debt but would like to see the Default Notices removed.
I'm able to help, and I will regardless, but I'd just really like to know if anyone has had experience in this area or knows if it is even possible?
So you want to pay the full amount so they have no bad credit history & wipe clean any defaults they’ve already made in a kind of deal?
I’d imagine once the CC companies pass on default info it’s out of anyone’s outside influence isn’t it?
Got to be worth a try but I’d be surprised. It’s a bit corrupt I’d imagine & would surely lead them open to trouble if things go south on a debt against the customer in the near future.
If any of them say no, you may as well strike a deal though. Pointless paying the whole amount in that case. I saw a program the other day talking about paying off CC’s and the chap reckoned these companies will get the debt down to 30-40% and if you do it yourself you may be able to pay back 1/4 of the original debt. I guess it depends on how much interest you’ve paid them back over the years though.
I’d imagine once the CC companies pass on default info it’s out of anyone’s outside influence isn’t it?
Got to be worth a try but I’d be surprised. It’s a bit corrupt I’d imagine & would surely lead them open to trouble if things go south on a debt against the customer in the near future.
If any of them say no, you may as well strike a deal though. Pointless paying the whole amount in that case. I saw a program the other day talking about paying off CC’s and the chap reckoned these companies will get the debt down to 30-40% and if you do it yourself you may be able to pay back 1/4 of the original debt. I guess it depends on how much interest you’ve paid them back over the years though.
First off, unlikely you'll ever see the money again.
Is have a look at the moneysavingexpert forums for this, as there is some very good advice and experience there.
The problem with getting a "deal" is that there are 5 different people with roughly £8k each in debt, you would be in a much better position for a deal with 1 person with £38k debt. £8k is a very feasible amount for an individual to repay, almost whatever their circumstances, but £40k for someone on close to minimum wage is essentially impossible, so they are likely to do a deal.
Before helping, you need/should have total visibility of their finances, which means getting copies of all 5 credit reports, and seeing bank statements etc. The time for them maintaining any sort of privacy regarding their finances went out the window when they asked to "borrow" £38k.
It may make more sense for them/ you to contact one of the debt charities, but not the fee paying forms, as depending on when they defaulted bankruptcy, or an IVA may be a better option.
I also have a little saying, "tell me your problem, but your perceived solution" The bit about default notices makes me wonder if they are looking to buy a house, is their perceived solution for you to pay off the credit cards, so they can get a mortgage? If so the solution may be you put the £38k down on the house as a buy to let, then rent the house to them. There could be agreement/understanding that when and if they sort their finances they can buy from you.
Is have a look at the moneysavingexpert forums for this, as there is some very good advice and experience there.
The problem with getting a "deal" is that there are 5 different people with roughly £8k each in debt, you would be in a much better position for a deal with 1 person with £38k debt. £8k is a very feasible amount for an individual to repay, almost whatever their circumstances, but £40k for someone on close to minimum wage is essentially impossible, so they are likely to do a deal.
Before helping, you need/should have total visibility of their finances, which means getting copies of all 5 credit reports, and seeing bank statements etc. The time for them maintaining any sort of privacy regarding their finances went out the window when they asked to "borrow" £38k.
It may make more sense for them/ you to contact one of the debt charities, but not the fee paying forms, as depending on when they defaulted bankruptcy, or an IVA may be a better option.
I also have a little saying, "tell me your problem, but your perceived solution" The bit about default notices makes me wonder if they are looking to buy a house, is their perceived solution for you to pay off the credit cards, so they can get a mortgage? If so the solution may be you put the £38k down on the house as a buy to let, then rent the house to them. There could be agreement/understanding that when and if they sort their finances they can buy from you.
You can ask the credit companies but generally the defaults won’t be removed unless/until the debt is paid or 6 years have passed.
If you just want to help them out then you could fund a single contribution IVA. It will relieve them of the debt burden although it won’t remove the defaults. If they’ve got themselves into this state though perhaps having limited access to further credit for a while would prevent the issue repeating.
If you just want to help them out then you could fund a single contribution IVA. It will relieve them of the debt burden although it won’t remove the defaults. If they’ve got themselves into this state though perhaps having limited access to further credit for a while would prevent the issue repeating.
Paul the Painter said:
First off, unlikely you'll ever see the money again.
+1 Second off, make sure that once the cc bills are paid off the cards are cut up.
It's astonishing how many people take out a barely affordable loan to pay off their credit cards, then start building up another debt on the cards.
NGRhodes said:
Is there a specific need to remove the default notices, as leaving them in place may serve as protection/reminder against getting into further future debt.
Speaking as someone who's been in considerable debt & climbed back out (without - no offense - asking to be bailed) I'd suggest default notices on file might be a good thing. What kind of basket case are you dealing with where five people all aquire defaults? But yeah haggle them down, suggest they'll be asking their accounts to be frozen otherwise etc etc
Edited by Teddy Lop on Sunday 2nd February 12:28
Teddy Lop said:
NGRhodes said:
Is there a specific need to remove the default notices, as leaving them in place may serve as protection/reminder against getting into further future debt.
Speaking as someone who's been in considerable debt & climbed back out (without - no offense - asking to be bailed) I'd suggest default notices on file might be a good thing. What kind of basket case are you dealing with where five people all aquire defaults? But yeah haggle them down, suggest they'll be asking their accounts to be frozen otherwise etc etc
Edited by Teddy Lop on Sunday 2nd February 12:28
I would leave the defaults on there as a preventative measure. What happens in three years and another £38k is needed?
Mike
uncleluck said:
So you want to pay the full amount so they have no bad credit history & wipe clean any defaults they’ve already made in a kind of deal?
I’d imagine once the CC companies pass on default info it’s out of anyone’s outside influence isn’t it?
Got to be worth a try but I’d be surprised. It’s a bit corrupt I’d imagine & would surely lead them open to trouble if things go south on a debt against the customer in the near future.
If any of them say no, you may as well strike a deal though. Pointless paying the whole amount in that case. I saw a program the other day talking about paying off CC’s and the chap reckoned these companies will get the debt down to 30-40% and if you do it yourself you may be able to pay back 1/4 of the original debt. I guess it depends on how much interest you’ve paid them back over the years though.
I heard the CC guys can request the removal of Default Notices but only if the debt is paid in full. I was wondering if this is possible.I’d imagine once the CC companies pass on default info it’s out of anyone’s outside influence isn’t it?
Got to be worth a try but I’d be surprised. It’s a bit corrupt I’d imagine & would surely lead them open to trouble if things go south on a debt against the customer in the near future.
If any of them say no, you may as well strike a deal though. Pointless paying the whole amount in that case. I saw a program the other day talking about paying off CC’s and the chap reckoned these companies will get the debt down to 30-40% and if you do it yourself you may be able to pay back 1/4 of the original debt. I guess it depends on how much interest you’ve paid them back over the years though.
The carrot on the stick is dependant on how much weight paying off the whole debt carries in the CC companies eyes and what they are prepared to give in return.
Paul the Painter said:
First off, unlikely you'll ever see the money again.
Is have a look at the moneysavingexpert forums for this, as there is some very good advice and experience there.
The problem with getting a "deal" is that there are 5 different people with roughly £8k each in debt, you would be in a much better position for a deal with 1 person with £38k debt. £8k is a very feasible amount for an individual to repay, almost whatever their circumstances, but £40k for someone on close to minimum wage is essentially impossible, so they are likely to do a deal.
Before helping, you need/should have total visibility of their finances, which means getting copies of all 5 credit reports, and seeing bank statements etc. The time for them maintaining any sort of privacy regarding their finances went out the window when they asked to "borrow" £38k.
It may make more sense for them/ you to contact one of the debt charities, but not the fee paying forms, as depending on when they defaulted bankruptcy, or an IVA may be a better option.
I also have a little saying, "tell me your problem, but your perceived solution" The bit about default notices makes me wonder if they are looking to buy a house, is their perceived solution for you to pay off the credit cards, so they can get a mortgage? If so the solution may be you put the £38k down on the house as a buy to let, then rent the house to them. There could be agreement/understanding that when and if they sort their finances they can buy from you.
I work on the premise that money given to friends and especially family, is money gone. Expect never to see it again and "lend" it on that understanding.Is have a look at the moneysavingexpert forums for this, as there is some very good advice and experience there.
The problem with getting a "deal" is that there are 5 different people with roughly £8k each in debt, you would be in a much better position for a deal with 1 person with £38k debt. £8k is a very feasible amount for an individual to repay, almost whatever their circumstances, but £40k for someone on close to minimum wage is essentially impossible, so they are likely to do a deal.
Before helping, you need/should have total visibility of their finances, which means getting copies of all 5 credit reports, and seeing bank statements etc. The time for them maintaining any sort of privacy regarding their finances went out the window when they asked to "borrow" £38k.
It may make more sense for them/ you to contact one of the debt charities, but not the fee paying forms, as depending on when they defaulted bankruptcy, or an IVA may be a better option.
I also have a little saying, "tell me your problem, but your perceived solution" The bit about default notices makes me wonder if they are looking to buy a house, is their perceived solution for you to pay off the credit cards, so they can get a mortgage? If so the solution may be you put the £38k down on the house as a buy to let, then rent the house to them. There could be agreement/understanding that when and if they sort their finances they can buy from you.
We have had lots of calls with Step Change and they are a great organisation and give good advice. We want to run this past them but i thought i gauge opinions here first. One thing I would say id that as soon as you register with Step Change (other debt charities are out there!!...) and pass the numbers to the creditors, they sit up and take note and all the bullying/threatening letters and serious nasty calls cease. It is important to know it is a breathing space exercise and allows you to negotiate the terms but it does not make all the debt vanish.
Ps...i'll add, bessy divorce, 2-kids and absent father and absent ££ child maintenance!
uncleluck said:
Pointless paying the whole amount in that case. I saw a program the other day talking about paying off CC’s and the chap reckoned these companies will get the debt down to 30-40% and if you do it yourself you may be able to pay back 1/4 of the original debt. I guess it depends on how much interest you’ve paid them back over the years though.
Can be as little as 10%. It all depends on how bleak a picture you can paint, and how good you are at painting.NGRhodes said:
Is there a specific need to remove the default notices, as leaving them in place may serve as protection/reminder against getting into further future debt.
I partially agree but it is a close and dear family member who is drowning in debt. The reminder is there and there will be caveats in place once I step in and help. This is beyond teaching them a lesson, it is helping, educating and taking the huge debt pressure off a loved one.
Dr Jekyll said:
Paul the Painter said:
First off, unlikely you'll ever see the money again.
+1 Second off, make sure that once the cc bills are paid off the cards are cut up.
It's astonishing how many people take out a barely affordable loan to pay off their credit cards, then start building up another debt on the cards.
0% balance transfers and the like are a dangerous game. remember the self-cert mortgages!!!
If it's one person, as it seems to be from the last update, if in rented, consider bankruptcy. The MSE forum on bankruptcy is great with to advice.
If they own a property with some / minimal equity the process will allow you (or her) to buy the beneficial interest for below market rate.
Strongly consider IVA also.
For practical purposes, hire car etc, she can have a second card on your account.
£38k given to help her out over the next few years (where her income will be no higher than today) will be a lot more beneficial to her than a clean credit history, enabling her to borrow money she cannot afford, and £30k+ in the hands of a financial institution
If they own a property with some / minimal equity the process will allow you (or her) to buy the beneficial interest for below market rate.
Strongly consider IVA also.
For practical purposes, hire car etc, she can have a second card on your account.
£38k given to help her out over the next few years (where her income will be no higher than today) will be a lot more beneficial to her than a clean credit history, enabling her to borrow money she cannot afford, and £30k+ in the hands of a financial institution
mike9009 said:
Teddy Lop said:
NGRhodes said:
Is there a specific need to remove the default notices, as leaving them in place may serve as protection/reminder against getting into further future debt.
Speaking as someone who's been in considerable debt & climbed back out (without - no offense - asking to be bailed) I'd suggest default notices on file might be a good thing. What kind of basket case are you dealing with where five people all aquire defaults? But yeah haggle them down, suggest they'll be asking their accounts to be frozen otherwise etc etc
Edited by Teddy Lop on Sunday 2nd February 12:28
I would leave the defaults on there as a preventative measure. What happens in three years and another £38k is needed?
Mike
This is the risk and will be the thing to try to monitor. The drowning in debt stress has caused pretty much wiped her out. She's staying with us for a week and we've met accountants, banks and a very good friend who is a pretty highly regarded financial adviser.
It's not just about the debt, it's about teaching the mindset that allows it to get that bad.
Turfy said:
One person with 5 credit cards with 5 separate CC companies (counting Halifax and MBNA as 2 separate lenders).
This is the risk and will be the thing to try to monitor. The drowning in debt stress has caused pretty much wiped her out. She's staying with us for a week and we've met accountants, banks and a very good friend who is a pretty highly regarded financial adviser.
It's not just about the debt, it's about teaching the mindset that allows it to get that bad.
So, does paying those debts off actually do anything to change that mindset?This is the risk and will be the thing to try to monitor. The drowning in debt stress has caused pretty much wiped her out. She's staying with us for a week and we've met accountants, banks and a very good friend who is a pretty highly regarded financial adviser.
It's not just about the debt, it's about teaching the mindset that allows it to get that bad.
Put it another way would you do the same if they had a drug habit, or were a gambler?
Not saying don't help, but from what you say you have two problems the actual debt and why/how they got there. My own feeling is you need to look at helping the cause more than the actual debt.
Certainly would not look to remove the default notices etc. Just makes getting into further debt even easier.
Edited by Drumroll on Monday 3rd February 08:10
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