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My debt got sold off to a 3rd party.

Do I get in contact with the original lender to pay the debt off?

The other debts were with an ISP I once used. But think it has been classed as default. Found this out when I requested for my credit report.

Will I be doing right by trying to attempt to pay off a debt that I have defaulted on - years ago??

This is all in the name of trying to repair my credit history.

Cheers. All response welcome.

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    Please state where you incurred the debt and exactly how long ago this happened. This is relevant; the debt may already be discharged and you may not owe anything, unless you choose to acknowledge the debt. – ChrisInEdmonton Feb 24 '15 at 17:55
  • Well, had an overdraft when I was a student: £1250. Didn't see this on my credit report, so don't know if I'm obliged to this now. This was in 2009. Was expected to pay 2010. Same year, was unaware of a debt (£78)from my ISP, also when I was a student - 2010. Same year, another £200 from a retailer (when I travelled, left my store card with my aunt in good faith and she did not settle the debt). To summarise: £1250 - year 2010(although, didn't see in credit report); £78 from Internet ISP - also around 2010/11; £200 - year 2010/11 from a store card; finally £350 - year 2011 credit card. – user2133 Feb 24 '15 at 19:38
  • For the UK, it looks to me like payplan.com/advice/law/limitation-act-1980 applies. If you incurred the debt in 2010, you are nearing the statute limit. I'm not familiar enough with UK law to say for sure, though. – ChrisInEdmonton Feb 24 '15 at 20:18
  • Do you mean when the debt was incurred or when it was defaulted on? Asked because, at the point of applying for the overdraft, I'm of the impression I've incurred a debt already. – user2133 Feb 24 '15 at 20:19
  • The link I posted contains the answer. Unfortunately, I don't know UK law well enough to offer a reliable summary. – ChrisInEdmonton Feb 24 '15 at 20:56
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Your debt is now owed to the third party and not to the original party. Do not pay anything to the original lender, as they have been paid (a much lower amount) by the 3rd party. You no longer owe anything to the original party.

With regards to your credit, if you have paid late, not paid, or defaulted and this is not in error, you can't really change what has been reported. However, you can clear up the remaining debt so that going forward, you will have a clean credit history. Over time, the old late/missed/default reporting will fall off of your credit report and you will eventually get back to a clean record.

Additionally, I think you will feel much better once the debt is paid. At some point in the past, you made a promise to pay for the service you received. By keeping that promise, you will be setting a new course in your life through responsible behavior.

Since you have a history of not paying the debt, you may also be able to settle with the new owner for a much lower amount. Try offering them whatever you have, even if it is 10% of the total. They bought your debt for pennies on the dollar, so they may be able to take a deep discount to the face value of the debt and still make money. They know than a high percent of defaults never pay, so they may rather take whatever you can offer instead of nothing.

Two key points here are (credit to Dave Ramsey): 1) Never give a collector or creditor your financial information, such as a debit card or account number. If you do, don't be surprised if they take whatever they can. 2) If you settle on a lower repayment amount, get the deal in writing before you give them a cent. If the deal for the lower amount isn't in writing, it doesn't exist in the eyes of the law.

And come back and tell us about your awesome credit in a few years!

  • Ah! Cheers for this. Requesting for a new credit report now. By the way...Dave Ramsey? Still new to stack overflow. – user2133 Feb 24 '15 at 19:45
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    Really really do not acknowledge the debt unless you are sure you'll be paying it off. In some jurisdictions (not sure about UK), this resets the 'timer'. Though of course, generally speaking, if you incur a debt, you are legally and morally obligated to pay it off. – ChrisInEdmonton Feb 24 '15 at 20:19

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