Bad debt

Daniellek1

Hey Guys,

So myself and my partner have started saving for a mortgage. I ordered our CCR reports. Mine was fine his came back with 40k unpaid from a few years. He didn’t tell me as his last ICB report stated it would be gone by this year. Obviously that’s not the case with the CCR. Are we doomed now forever. It is now with Cabot. I could probably offer a settlement figure but nowhere near what is owed. Will a settlement for less look worse. Any advice would be great because I would like to buy a house in the near future but unfortunately I couldn’t get a mortgage on my own as my income is so low.

Jim2007

Well as you seem to already know, it's not going away until you reach some kind of settlement with them. In normal circumstances varying a debt to settle at a lower figure would trigger a reporting event, but since it is already being reported that does not matter in this case. So you may as well reach out to them with your offer and see how it goes. They will have bought the debt at a discount so they may be more inclined to accept your offer. Either way, you don't have anything to loose by making the offer. And the sooner you deal with it the sooner it will come off the CCR.

Mrs OBumble

I would not be willing to go into a joint debt arrangement, not to mention an intimate relationship, with a person who chose not to mention a debt like that to me.

Who knows what else else they've not told you about because there's no evidence.

Daniellek1

Thank you for the reply. Do you happen to have a rough idea on how much of a discount they would get for buying it?

Squiggle

https://www.boards.ie/discussion/comment/120248221#Comment_120248221

In the two cases I saw recently Cabot offered to settle for about 30% of the amount owing BUT the debts were old and Cabot would have had difficulty obtaining a judgement against the debtors so they were chancing their arm.

The other point is if they know your partner is working and can make some sort of repayments why would they settle?

Even if you can settle your partner's credit record will still show that debt for 5 years after settlement.

No easy solution here I don't think.

Why would your partner keep that from you if you are both planing to apply for a mortgage? If you pay it off, he can walk with his debt cleared and you probably having no hope of getting the money off him. It’s a cold thing to say, but you should be hearing alarm bells about what else he hasn’t told you.

Very odd for him not to tell you or even plan to tackle it himself.

that’s not the type of thing you brush under the carpet.

Jim2007

https://www.boards.ie/discussion/comment/120248221#Comment_120248221

Debt is sold in blocks not individual accounts and will be a mix of debt that is considered easy to collect up to stuff that is unlikely to be collected, in order to make it interesting for the buyer. There is no way of knowing how your debt was rated nor the discount paid for it. There are a couple of points to keep in mind:

• It was bought as a discount
• Depending on the documentation they have, it may be difficult to collected or very easy to collect
• They know you need to fix this problem and they may fall back and offer little or no discount

I'd say contact them make no offer at all, just listen to them and get a feel for how things are from their perspective and then decide on your next move.

Jim2007

MOD WARNING: The OP is asking for financial advice not relationship or moral advice. If all you have to offer or comment on it that, then please do not post. The OP is an adult and presumable is will aware of the other issues.

Daniellek1

@Jim2007 thank you, I really appreciate your comments.

Bass Reeves

https://www.boards.ie/discussion/comment/120249071#Comment_120249071

I. E inclined to let him contact them. If they know he is in a relationship then they may hold for a higher figure.

However is it worth paying anything if it's five years before it clears completely. Is he earning a wage where by the debt is recoverable. Is personal insolvency an option for him.

Basically explore all options

Jim2007

https://www.boards.ie/discussion/comment/120249795#Comment_120249795

The objective it to get the debt removed and the only way that happens if it is settled. A personal insolvency is not going to make it go a way and will leave a record. There would need to be a lot more than an old debt to go down that road.

Bass Reeves

https://www.boards.ie/discussion/comment/120249906#Comment_120249906

How long will it before it clears completely off the system 3-5 years. Either will probably mean he cannot appear on the mortgage or the deeds for 3-5 years. It probably means she must borrow the mortgage by herself if she intends to buy in the short term. Basically she needs to look at all options and handing 10-20k to clear a debt may limit them.

Jim_Hodge

https://www.boards.ie/discussion/comment/120249977#Comment_120249977

It won't clear the system unless it's settled. How many times has that to be repeated to you?

Pauliebigballs

I believe it stays on your record for 5 years post clearing, although some lenders accept 2 years post clearing when applying for a mortgage

Bass Reeves

https://www.boards.ie/discussion/comment/120250121#Comment_120250121

When it paid how long will it take to clear the system....3 years....5 years or 5 years after it's registered that it clears which may be nearer to six.

Coming to an agreement may not resolve her issues is she willing to rent for the next number of years until it clears.

Tweeter

I would offer a final settlement figure that would be attractive for them. Clearly it has been problematic for whatever institution it was originally owed to, to collect this debt, so usually they will accept an offer that gives them an instant profit and no headaches chasing the money.

If they bought the loans at a 30% discount, I think you would have a good chance of success of offering a full and final settlement figure of 15% off what is currently outstanding, so in your case you could offer €34,000. However if your partner does not have the means to settle and no assets that could be used to settle and Cabot are already aware of this situation, then I would try an even lower offer of possibly €29,000??

I'm not in a hugely different position myself regarding a loan that has been sold on, and my experience to date is that they like short term profit making settlements. I haven't finished my own negotiations as of yet, but I think it's looking good, fingers crossed. Worst case scenario is they say no, so ultimately worth a go