Credit card debt

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westernway

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My partner has 7500 owing on a credit card for they’ve been paying 20.00 per month off, not being charged interest.

It’s showed on ICB along with another problematic debt.

Should they clear this in full now?

bank will agree to 80% settlement - would settlement have negative impact down the line when looking for mortgage for example?
 
Why would the bank agree on 80%. Why didn't they pay it off if they have the means before now? I suggest if they clear it they lower the limit if there is a problem with managing debt.
 
It wasn’t cleared as they were going through financial difficulty with MABS advice monthly payment was agreed
 
Bank have agreed to accept 80%

My question is whether doing so will impact future lending applications?
 
To be honest, I'm assuming they already have a terrible credit record whether they settle this for a shortfall or not?
What's the value of the other debt, and how bad is their record?
 
Yes, thanks They’re also dealing with the other debt, a joint mortgage between four previous business associates - not certain of the status yet, Solictor looking into it.

Does settling at less than the full Loan amount register poorly? We are going to settle it, naturally 80% would be preferable but not if it’s going to haunt us.
 
Sounds to me like your credit rating is already ruined. The sooner you pay down all the debts the sooner you will start to have a clean credit rating. Why is this so important to you? As in does it matter?
 
I assume they are planning ahead.

I'm reading between the lines thinking the advice is to clear all loans before going near a mortgage with this person.

Could the cc debt not be conciliated into a loan with the other debts and a payment plan put in place.

How this effects your credit rating going forward I don't know. Do the loans have to be cleared for a certain time period before you get a decent credit rating back?

People with no loan history sometimes have be problems because they have no credit history.
 
It’s a long story and to get the benefit of this forum I’d need fuller information- we are gathering that info together and will post elsewhere for advice when we have it.
We want to move house. But can’t get mortgage approval at the moment.

Our understanding is cleared loan / settled loan remains on ICB for five years
 
You can just rent if you want to move house.

Taking on another loan like a mortgage seems an odd choice in the circumstances.
 
Either way, the credit history will be around for 5 years after its addressed.

I'm assuming one of you has a bad history, and the other is clean? And together you've enough to settle the debt in order to move on?

If you settle for less than full amount, it'll be recorded as such on ICB and CCR.
And that'll be around for 5 years.

It really depends on how bad the overall credit history is. I have heard of people with previous issues getting mortgages once they clear their old debts in full. It looks better to pay debts in full rather than at a discount. Banks expect to see past issues in a certain age group given everything they've been through, but within reason.
They would really like to see as long as possible with a clean record, so settle it now if you'd like a mortgage in a year or 2.
 
We have been offered a write down on our tracker
My partners prior debt (joint mortgage with business partners) was, I thought, linked to their business, and that business went belly up in the crash. My partner left the business a few weeks before it crashed we thought the house was sold along with other interests but it’s now possible the loan is still due, although the bank haven’t sought any payments since the business folded. As mentioned Solictor looking into this now. ICB notes AP against that mortgage “Assigned to other Party”

I will post again when I have fuller info

Appreciate your comments so far
 
Great, thank you!

Yes, my history is spotless! It’s all their fault! Lol
The bad debts are all linked to my partners business, and a few poor choices at a very difficult time in our lives
We are both now in full time employment and getting back on top of things
 
westernway said:
We have been offered a write down on our tracker
Click to expand...
Ah yes, you've a Danske tracker that you're trying to refinance now to get the discount?

I'd talk to a good broker to see what they make of your situation. Pepper specialise in offering mortgages in your situation, but the interest rate will be higher. You need to weigh that up against the discount on offer.
 
That’s right - we spoke to a broker but we’re also speaking with BoI at the time they seemed very positive- but we ended up with a refusal - broker said he’d hold off until we went through application with BoI as they were very positive & offering good rate
But now that we can see things need to be cleaned up on the credit report

We have written offer of write down but it expires end November

I’ll write up fuller details on another thread when I can

Thanks
 
Usually the bank will display the facility as settled with a letter L on the ICB which indicates settled at a loss to the financial provider. (Rather than a C which just means closed) This will notify other potential lenders there was an issue however might be a better alternative than showing current long term arrears.
 
Your partner has a bad credit history. As well as the bad debt on the property, there is €7,500 owing being repaid at €20 a month. That's 31 years to repay the debt with no interest.

A bank will look at this application and see that they cannot manage their finances and will not be willing to give you hundreds of thousands of euro.

Have you looked into whether you can get a mortgage on your own?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
According to me, If a lender forgives worth of the principal on your debt, it must report the amount to the IRS via a form. So, for example, a lump sum payment of $2,500 to settle a $4,500 credit card bill will mean you'll likely have to pay tax on an additional $2,000 in income next year.
 
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