Fending off a default before it happens

I have already posted part of this over on the Credit File forum and the lovely people there told me that there are some real-life debt ninja’s over here in the DFW forum and to post here too…

Can you help me with a few sage things to say in reply to a Lloyds bank saga that’s been rumbling on for about 16 years?

I took out an aggressively-sold loan and full PPI with Lloyds back in the early 2000’s. I had no hope of meeting the repayments over the full life of the loan, so after struggling with it for a couple of years I wrote to Lloyds asking to renegotiate. I was treated horrendously by an account manager and had to eventually complain to the Chairman’s office. Finally, in 2005, the loan was fully renegotiated, the PPI removed and refunded, part of the loan written down and the remaining balance was set up as a current account with no charges or fees, just a negative balance of the outstanding amount which was to accrue no interest.
I offered to pay £100 per month, which I honoured for several years.

Poor circumstances some time later then meant I had to approach them to ask for a repayment holiday. They did not respond. I didn’t make payments for several years, during which time they did not contact me at all.

Eventually in 2015 they wrote and asked if I could resume payments. The letter was quite polite, made no reference to the loan maturing, and contained no threat of any action of any kind.

I said I could manage £40pm. Again they did not respond.
I have been paying the offered £40pm into the account ever since (over three years).

The account was never defaulted, nor sold on, and eventually, due to extreme old age, stopped appearing on my credit file at all.

In January of this year Lloyds wrote to me, entitling their letter ‘default loan’ and laid out the fact that the loan is past maturity (which it is - if I’d paid £100pm, it would have been settled in 2015).

I wrote back saying I’d be willing to up the payment when I can. Their response has been to send me a ‘Letter of Concern’ and again have entitled it ‘default loan’.

They’ve given me 14 days to respond.

I asked a question over in the credit file forum about whether they can re-list this account on my credit file in order to lodge a default against me. It seems they can.

I don’t think I meet the traditional criteria for a default – I’ve answered all their letters, have been making regular payments for the last three years and so on – but clearly, as is always the case with the big banks, the advantage lies with them. If they do lodge a default, that casts a six year shadow over my whole life. I can’t have that.

Better to tread gently and make sure they don’t default the account in the first place.

So, I can (just) manage to up the payments back to the £100 per month level of the original agreement. But I want to make a strong case that £100 per month is completely fair and any further action / default against me would be punitive.

QUESTIONS:
What do I have on my side? Surely, SURELY they should have taken action sooner than this if the account was a problem? Doesn’t their complete inaction in the past count for something? (They are very lucky I responded to them in 2015 - if I'd known about 'statute barring' I might not have said a word...).
I want them to accept the £100pm, leave me alone and stop threatening my financial future (not unreasonable IMHO!).
How do you think I should frame the offer in order to achieve that?

Any help gratefully received ~ thank you.