Old Debt

Yanayaya

Hi All,

I have heard some talk about credit agreements that are signed before April 2007 that are in debt can be written off or reduced. I would like to know more about it to be honest. Can anyone help?

Tixy

Yep, read through this thread for a guide and information on the implications -
http://forums.moneysavingexpert.com/showthread.html?t=2060575
(the debts are not written off though - they just cannot be enforced in court, it can also trash your credit rating)

DGJsaver

http://forums.moneysavingexpert.com/showthread.html?t=2060575

Tixy

The results and implications and misconceptions of the recent high court cases are discussed in the thread link shown in posts #2 and #3.

Declan - have you obtained MSE permission to post considering your interests?

Yanayaya

Thank you very much for all the input. A big question is that I cannot see in these links is, IF you are successful in your requests to DCA or likewise, what happens to your credit score? How long does it remain tarnished for? Mine has been mud for years whilst I was with the CCCS and has never recovered from the black marks emposed......years ago when I was young and (lets be honest) stupid. lol.

Tixy

Generally anything that goes on your credit file stays there for 6years. So if you have already defaulted on these debts then no further default can be added, but if you haven't already defaulted and decide to stop paying a default will be added and stay there for 6years from now.

Yanayaya

Tixy wrote: »

Generally anything that goes on your credit file stays there for 6years. So if you have already defaulted on these debts then no further default can be added, but if you haven't already defaulted and decide to stop paying a default will be added and stay there for 6years from now.

Well all my credit cars and loans have been in the hands of DCA for years now and they have been sold and mvoed around amoungs themselves during that time aswell. So I think I have passed the default on payments for it to be passed to a DCA. Is that right??

For me, default means miss a payment and I did when I was young and they were put out to DCA's.

Tixy

Default usually happens after 3missed payments or so, Its formal meaning means sending you a default notice and putting a default date on your file. (as opposed to one missed payment which only shows as a missed/late payment marker).

But if they are with DCAs then they will almost certainly have been defaulted years ago.

never-in-doubt

Yanayaya wrote: »

Well all my credit cars and loans have been in the hands of DCA for years now and they have been sold and mvoed around amoungs themselves during that time aswell. So I think I have passed the default on payments for it to be passed to a DCA. Is that right??

For me, default means miss a payment and I did when I was young and they were put out to DCA's.

A default is a legal entity, in this case under s.87 & 88 (CCA1974):

Section 87(1) of the 1974 Act allows the creditor to send you a default notice giving you fourteen days from the date you receive it to pay the arrears.

So in laymans, this is the provision for issuance of a default:

s.87 - Need for default notice

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,

(a) to terminate the agreement, or
(b) to demand earlier payment of any sum, or
(c) to recover possession of any goods or land, or
(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or
(e) to enforce any security.

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

s.88 - Contents and effect of default notice

(1) The default notice must be in the prescribed form and specify

(a) the nature of the alleged breach;
(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;
(c) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those seven days have elapsed.

(3) The default notice must not treat as a breach failure to comply with a provision of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1)) if the seven days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.

(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it.

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid.

Subsequently, s.87(1) of the CCA1974 clearly states that a default notice must be served before the creditor or owner can become entitled, by reason of any breach by the debtor.

Yanayaya

Thanks once again for the sterling advise. Please allow me to also ask another question. If I get my agreements through from the DCA (which no matter what will NOT wipe off debt totally) could it serve me to reduce my debt??

Tixy

What people sometimes do when they have their agreements and if they find the agreements don't have all the required terms & conditions then they make a very low full & final settlement offer in the hope the DCA will settle for this.