Author Topic: Credit file says settled - shall I stop paying?  (Read 31055 times)

outkast

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Credit file says settled - shall I stop paying?
« on: May 10, 2016, 08:44:28 PM »
I've just got my latest credit file and 2 companies that I have owed money to for the last 4 years on a debt management plan (paying a pittance to be fair) have changed the status to default and now to settled


So can I stop paying?

Lisa Thomas

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Re: Credit file says settled - shall I stop paying?
« Reply #1 on: May 11, 2016, 09:13:33 AM »
Do you still believe there is a balance to pay?


Has the debt been sold on to third parties?


I would check with your DMP Company first or you could be risking recovery action.
www.Nevilleco.co.uk 01752 786800

outkast

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Re: Credit file says settled - shall I stop paying?
« Reply #2 on: May 11, 2016, 09:36:43 AM »
Both of the accounts that are now showing as settled are Barclays.


In terms of the actual amount owed in real terms - the debt is clear.  In terms of the interest that was applied to the overall debt - there is still money outstanding.  Of the largest debt the original loan was for 8k zero APR if cleared in 3 months.  Which was my intention but then a business that owed me 10k went under and I couldnt pay so with the APR the debt inflated to 18k when they piled on the interest.  I have cleared the original 8k but still owe them around £12k in interest. The second one was just my barclaycard.  Ive probably cleared that too excluding interest.


On my credit file using "checkmyfile" - the 2 debts are showing as settled in March. Since this time I have not received any contact from a debt collection agency which the debt may have been sold onto.  In addition my credit rating has gone up by a few points since the indicators changed to settled.  I have also checked with Clearscore and its showing the same thing.

it's really weird.  If I log into my DMP, yes of course its saying that I still owe the money because the full amount at the time the account was frozen and subsequently went into default is what I am paying off.  I'm tempted to just stop paying and was wondering if anyone else has any experience of this? 

Lisa Thomas

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Re: Credit file says settled - shall I stop paying?
« Reply #3 on: May 11, 2016, 09:59:19 AM »
I wouldn't recommend it unless you are happy to risk being made Bankrupt or have bailiffs turn up on your doorstep..


I presume Bankruptcy is not what you want or you would have done that before rather than enter the DMP.


There's a possibility they agreed to write off interest and only be repaid capital but you won't know unless you ask Barclaycard or your DMP provider.
www.Nevilleco.co.uk 01752 786800

outkast

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Re: Credit file says settled - shall I stop paying?
« Reply #4 on: May 11, 2016, 01:19:32 PM »
Why would I be classed as bankrupt if i stop paying?  That doesnt make sense.  I would have to apply for bankruptcy?


The only thing they could reasonably do surely is a CCJ - at which point it would be known to me that they were taking that action and I could start paying again.


I dont want to be rude but do you have a financial background?  Or are these just your opinions?

Lisa Thomas

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Re: Credit file says settled - shall I stop paying?
« Reply #5 on: May 11, 2016, 01:32:03 PM »
You wouldn't be classed as Bankrupt if you simply stopped paying.


I advised you that you are at 'risk of being made Bankrupt'.


If the creditor believes the balance of the debt remains payable they could issue a Bankrupt petition against you to make you Bankrupt themselves.


They don't necessarily have to go down the CCJ route.  They can issue a Statutory Demand against you then follow that up with a Bankruptcy Petition and make you Bankrupt.


I am a licensed Insolvency Practitioner.
www.Nevilleco.co.uk 01752 786800