Clearing debts on a DMP

[shamone21]

Hello,

 

I am almost in the position to start approaching my creditors to give Full and Final settlement offers however I would like a bit of advice first. I am looking to get a mortgage within the next 2 years and want to get myself in the best position possible to apply. I will have money available from family to clear the debts however the majority will come from my local credit union, I have already discussed this with them. I am currently on a DMP with StepChange and one of my creditors has only just defaulted my account so the 6 year clock has only just started ticking....

 

I have read on this forum that its unlikely I will ever be able to have the defaults removed with the CRA's however I am going to try. Has anybody ever had defaults removed as part of F&F settlement negotiations? I have seen some F&F settlement letters on this forum with default removal as one of the conditions.

 

I am aware that a settled default is not much better in the eyes of mortgage lenders than an unsettled default.

 

Also, I am not sure if I should use Step Change's free F&F settlement service or go alone using templates here.

 

Any advice is greatly appreciated.

 

Many Thanks

[Bazooka Boo]

Either way, once a default is marked on your file, it stays there for 6 years, paid or not.

Unless the info is incorrect then they won't be removed.

And I am led to believe that you will need about three years of good credit history to stand any chance of getting a mortgage.

F&F offers should ONLY be made on the provision that the data on your credit file is removed or marked as satisfied, most will mark the default as partially settled.

[shamone21]

thanks for the response. So would having defaults marked as settled/satisfied within the last 3 years effect a mortgage application in the eyes of most lenders?

[Bazooka Boo]

Again, I believe it would yes.

There is the opportunity to have them do a 'manual' credit check, where a real life human being physically looks at your file rather than a dumb computer..

[shamone21]

On a separate note, it was Nationwide who I recently defaulted with. This was because a change in financial circumstances meant that I had to reduce my payments through the DMP. They also said they were going to transfer to KPR DCA however in the end they didn't.

 

If they are continuing to accept my payments why have they defaulted the account?

[Bazooka Boo]

KPR, if I remember correctly, is still Nationwide...

 

They have possibly only just defaulted you now, as you have had to reduce your agreed payments when you both agreed to the DMP.

Although, theoretically speaking, they should have done this when you reduced the original payments to those you made in the DMP.