Question

A few years ago I defaulted on a credit card and also a catalogue bill I had. I was in a bad place and just did not pay them. Now I want to clear this up as I am back working and can afford to pay them. In total I owe about £2,000.

How do I go about paying these debts back? I don’t have £2,000, but I can make payments. I want to buy a house in a few years, and I know these debts will need to be paid in full.

Regards,

Teresa

Answer

Teresa,

Your first port of call will be to contact those whom you owe. Do you still have any contact details or notices from the credit card company or catalogue company?

If you don’t, if you can recall their names, you can do a search and try contacting them that way.

You also may wish to get a copy of your credit report to see what it states, and it will also give you some details to aid in contacting those you owe.

Debts/accounts get sold on a regular basis, so you may find the accounts have been forwarded on to a collection agency. Once you locate the accounts, the creditor or agency should be able to set-up a repayment plan for you.

Regarding buying a property, you will need to save for a deposit. Even with bad credit, the larger the deposit you have, the higher your chances of getting a mortgage loan to buy a house.

Regards,

Jon

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