Default

bigsquid

Hi,

I defaulted a credit card account in 2004 after a serious accident that has left me a full time wheelchair user and I haven't worked since. I recently was refused credit so I checked my credit report and this old credit card account was listed as being late every month with the balance of £1086 remaining. I contacted Barclaycard a few months ago and set up a £10 monthly payment as I wanted to repair my credit rating in case I ever need to access some in the future. I checked my credit rating again last week and it still had the same balance with late payments every month. So I called Barclaycard today, the guy told me that they are not updating my credit file and a defaulted account is cleared after 6 years anyway so by the end of the year it will be gone.

Could anyone explain to me what happens after 6 years when it is cleared? Does this mean the balance of £1086 will be gone? If this is the case should I even be paying this £10 monthly payment?

Any advice would be much appreciated.

Cheers

dehaani

bigsquid wrote: »

If this is the case should I even be paying this £10 monthly payment?

Too late. The debt cannot be pursued if there has been no contact between you and the creditor for 6 years. You started paying, so you'll need to continue now.

bigsquid

dehaani wrote: »

Too late. The debt cannot be pursued if there has been no contact between you and the creditor for 6 years. You started paying, so you'll need to continue now.

So it won't be cleared as the guy said? And how do I go about repairing my credit rating if its not being updated with the £10 payment?

CannyJock

bigsquid wrote: »

So it won't be cleared as the guy said? And how do I go about repairing my credit rating if its not being updated with the £10 payment?

It'll drop off your report 6 years after the default date I thought whether you make any payments or not?

withabix

The Default itself will disappear 6 years after the Default was originally registered.

What won't disappear is the debt - you will still have to pay that as you've acknowledged the debt by paying towards it. I presume there had been some communication between yourself and Barclaycard since 2004 anyway. The six year thing is more related to absence of contact, rather than the debt itself.

Your credit record will still show the debt and the fact that you aren't repaying at the contractual rate until you have paid it off.

Been there, done that.

By the way, I presume you've explained the accident, no work and wheelchair etc and Barclaycard have probably waived interest - if not, that's worth a try.

It sounds like they are being reasonable though.

bigsquid

withabix wrote: »

The Default itself will disappear 6 years after the Default was originally registered.

What won't disappear is the debt - you will still have to pay that as you've acknowledged the debt by paying towards it. I presume there had been some communication between yourself and Barclaycard since 2004 anyway. The six year thing is more related to absence of contact, rather than the debt itself.

Your credit record will still show the debt and the fact that you aren't repaying at the contractual rate until you have paid it off.

Been there, done that.

By the way, I presume you've explained the accident, no work and wheelchair etc and Barclaycard have probably waived interest - if not, that's worth a try.

It sounds like they are being reasonable though.

I hadn't actually been in contact with them for years. Wish I hadn't contacted them now. Yeah, they have waived the interest which is good I guess. Thats not good for my credit rating then. I cant afford larger payments and it'll be 8/9 years before I pay it off at this rate!:(

izools

If you've actually been served a default notice in 2004 and the account is marked as in default as of 2004 on your credit file, it will drop off this year.

Whilst there will be no record of the debt existing as far as your credit report is concerned, and hecne as far as other creditors are concerned, the debt itself will still exist and you will still be liable to pay Barclaycard.

What concerns me is that you can't even afford to pay Barclaycard more than £10 a month but you are concerned about your credit rating? Why on earth would you be remotely concerned about what credit you might be eligible for when you can only swing a tenner a month for Barclaycard?

Anything like phone, standard bank account, mobile, insurance, basically anything credit scored but not a credit account, probably won't be affected in the slightest with a donkeys year old default anyway... I've been approved for mobile phone contracts and the like within a year of being discharged from Bankruptcy so you've got nothing to worry about on that front!!

withabix

bigsquid wrote: »

I hadn't actually been in contact with them for years. Wish I hadn't contacted them now. Yeah, they have waived the interest which is good I guess. Thats not good for my credit rating then. I cant afford larger payments and it'll be 8/9 years before I pay it off at this rate!:(

To put it into persepctive, it's £10 per month that you will have to forget about for 9 years. However, it will only ever be £10 and no more. That £10 will become worth less every year.

My worry is that you are considering future borrowing (ie wanting a clean credit record), when you can't afford to pay £10 per month to Barclaycard.

This means you want to borrow money that you can't afford to pay back. I don't want to sound harsh, but this seems like a bad idea. I once had over £30k of unsecured debt that I couldn't pay, so I'm speaking from experience. I managed to pay it all back in the end. It was hard. It took me six years.

Are you claiming all of the benefits you are entitled to? Are you eligible for any grants? (I'm not an expert, but there might be something you are entitled to.)

never-in-doubt

bigsquid wrote: »

I hadn't actually been in contact with them for years. Wish I hadn't contacted them now. Yeah, they have waived the interest which is good I guess. Thats not good for my credit rating then. I cant afford larger payments and it'll be 8/9 years before I pay it off at this rate!:(

Hang on, its all very good assuming that the debt isn't Statute Barred but they were defaulted in 2004. Just cos they were defaulted then does not mean that is when they actually last paid.

So, lets assume that the OP actually last made a payment in August 2003, then the debt would be SB'd in September 2009 so hopefully if this is the case and the OP paid after the official Statute date then the debt will in essence be clear and the payments made can be reclaimed.

So, OP - you need to check your credit file against the defaulted entry and establish the date you last paid into the account (from 5 years ago whatever)... then confirm the date you started paying Barclays again.

If the gap between this is 6 years then the debt will be statute barred (Limitation Act 2000).

If not, then after 6 years have passed from the default date the default will drop off your credit file altogether. Now this doesn;t mean you can stop paying them cos what they will do is try for a CCJ meaning another adverse entry for the next 6 years.

You may be better (once the default drops off) trying for a credit card and then agreeing to settle the old debt with Barclays and concentrate paying back the new card. I mean, make an agreement to settle for say £500, then you would only pay back £12.50 per month on this.

The other option, is to cease payments and play daft. By this I mean why pay £10 per month for 10 years when if you simply stopped paying now, in 6 years the debt would be statute barred anyway so surely cessation of payments would be the logical way forward? I'll be able to sort you with a letter to send Barclays disputing the harassment over the original claim you owed the debt and then fight for statute barred. If you need specific help send me a PM.

Good Luck