Pay off a Small Debt about 2 years old Advice Needed?

mrmr

Hi,

I got into financial trouble back a few year ago. I basically got a debt of about £384 with a catalogue, worried with the debt at the time i never paid and ignored it. it was only about £289 but since then the obviously added fees etc.

This is about 2-3 years ago. I decided i want to pay it, it's all that i have left in my savings, i regret not paying it and was stupid but i have learnt from it.

I have had 0% finance on credit cards and have always paid in full and have always had a credit card that has always been paid in full with my bank that i have been with for 5 years.

I also have a £2500 overdraft that i have never used but its there incase of emergencies. I also have a Mint card that i had 0% APR for 15 months and back last November paid off in full.

In total i got about £6000 credit available to me althou i don't use it, all i do is sometimes buy shopping on credit card and pay in full before due date to help keep improving my rating.

I always pay my bills in full on time apart from this one catalogue.

I notice on my credit report from annualcreditreport that there has been defaults every month showing from November 2008 to December 2009.

Not sure what default means exactly but must mean i obviously not paid.

As it has effected my credit rating i want to get back on track as everything shows good apart from this I am not sure the best way to approach the company and pay the debt, i have had letters off them in the past but ignored them and have since moved.

I am hoping to ask them if i pay in full can they remove all the defaults from my credit report and just make the account show settled. Would they do this? how should i approach them about it? i mean they may say yes they will request it to be removed but might not.

Can anyone help on how i should go about this. Biggest regret i have ever done as apart from that my credit is great.

Also when a company does a search wheter it be for finance like loan or anything like that or similar can other lenders see that? reason why is i got searches still showing from 2006, how long do these searches stay on profile? i am concerned as if other lenders can see them they may think i have applied for different loans etc when i never did they was either quotes or declined previously.

I am very scared to contact them incase they refuse payment and instead send baliffs or sent me to court instead of accepting payment from me. It was MarshallWard Catalogue but on credit report it shows as Phoenix Shop Direct so not sure who to contact.

Thanks

GeorgeUK

On Experian, searches are kept for 12 months; creditors look more closely at the last 6 months. You can have about 3 credit searches in the last 6 months before your credit score is affected.

Although it is not impossible to get the default removed, they may refuse to do so. Many say they can't, but it is possible. The default will stay on your credit file for 6 years if they refuse to remove it.

It may be possible to write to them making a settlement offer. I would advise saying that the money is coming from a 3rd party and that as one of the conditions of payment, you require written confirmation that the default will be removed.

Did you receive a default notice (giving you 30 days to pay before the default was added to your credit file)?
Also, is the date of the default correct? (Within 6 months of the date you first missed a payment)?

Onlt the people that put the default on your credit file will be able to remove it - not another company.

mrmr

Hi,

Thanks for replying.

I never got any default notice letter only something about passing the debt on to a recovery. I have not had any letters from them for about 18 months and dont have any so who i contact i don't know. As i moved twice since having the debt they may have sent such letters but at addresses i no longer lived at.

I cannot remember the dates or anything all i see on my report on annualcreditreport is the first default was November 2008 and each month after until December 2009.

It says on report that i opened account in mid 2007 i did buy some things at the time and paid them off so it was probably a few months after that when i did not pay and ignored it.

Thanks

niccatw

Hi there

Firstly, I'd suggest closing credit card accounts for any cards you do not use. If you don't use them and don't check them regularly then they may be targeted by fraudsters. By all means keep one and do as you have been, paying it off in full every months.

Defaults stay on your credit report for 6 years - I think this is from the first date of default, but I'm not entirely sure so don't take my word for that. And any future lenders will be able to see this on your credit file until it drops off.

If I were you I would contact the original company, ask for deatails of the original debt and whether they have sold the debt onto any debt collection agencies (which is likely if you've not paid anything in 2 years). If you can offer to pay the full amount, then I'd do that - but not before they have confirmed what you originally owed.

You can then offer them a full and final settlement (without the charges and asking for all defaults to be removed). They might not agree to that but you can always try. Do it all in writing so you have a paper trail.

I think there are templates on the site (some-one more knowledgeable than me can probably point you in the right direction there).

And well done on sorting out your debts and being so very nearly debt free :T

mrmr

Thanks for the reply.

I will think long and hard how to approach this. I would go to citizens advice but they are all non operating by me now and have not been operating for some time probably due to lack of funds.

I know the debt is only small but for past 3 years i have suffered from eating disorder, depression and mental health problems and am on incapacity benefit, i have several operations to go and have had many already, to be honest the savings could do with being kept for people to take me to hospital etc as it is about 80 mile return journey this is what i saved the money for this debt is causing me more stress than i can cope with. I sometimes come to tears thinking of it. I can't really afford to pay it off, i know my health is more important and i need to have money to get back and forth hospital etc but the way i feel at the moment i would rather pay the debt off and somehow figure out how to get to hospital etc when the time comes. I cannot use public transport as i can collapse and blackout etc hence why i rather ask friends etc with cars. Because of my eating disorder my heart sometimes gets stressed out and i have panick attacks etc the list of problems goes on.

Thanks for the advice.

GeorgeUK

Before putting a default on your file, they are required to issue a default notice which gives you 30 days to make payment before the default is added. This is a legal requirement.

To see if they did send a default notice, i would send a subject access request (SAR - cost £10), which under the data protection act requires them to provide a copy of all data they hold on you. This will include a copy of all correspondence and so you should see if there was a default notice sent.

If there was then your only hope is that you will be able to negotiate.
If there wasn't a default notice, then you should request it be removed.

Pinched from the consumeractiongroup forum:

SCHEDULE 2
FORM OF DEFAULT NOTICE BEFORE A CREDITOR OR OWNER CAN BECOME ENTITLED, BY REASON OF ANY BREACH BY THE
DEBTOR OR HIRER OF A REGULATED AGREEEMENT, TO TERMINATE THE AGREEMENT, DEMAND EARLIER PAYMENT OF ANY
SUM, RECOVER POSSESSION OF ANY GOODS OR LAND, TREAT ANY RIGHT CONFERRED ON THE DEBTOR OR HIRER BY THE
AGREEMENT AS TERMINATED, RESTRICTED OR DEFERRED OR ENFORCE ANY SECURITY

Regulation 2(2)

Details of agreement

1
A description of the agreement sufficient to identify it.

Parties to agreement

2
(1) The name and a postal address of the creditor or owner.
(2) The name and postal address of the debtor or hirer.

Details of breach of agreement and action required to remedy, or pay compensation for, the breach

3
A specification of:--
(a) the provision of the agreement alleged to have been breached; and
(b) the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either
(c) if the breach is capable of remedy, what action is required to remedy it and the date, being a date [not less than
fourteen days] after the date of service of the notice, before which that action is to be taken; or
(d) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and
the date, being a date [not less than fourteen days] after the date of service of the notice, before which it is to be paid.

relevant case law is this too...

DEFAULT NOTICE


The Need for a Default notice

• Notwithstanding the above, it is also drawn to the courts attention that no default notice required by s87 (1) Consumer Credit act 1974 has been attached to the petition.

• It is denied that any Default Notice in the prescribed format was ever received and the Defendant puts the Claimant to strict proof that said document in the prescribed format was delivered to the defendant

• Notwithstanding the above points, I put the claimant to strict proof that any default notice sent to me was valid. I note that to be valid, a default notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237)

• Service of a default notice is a statutory requirement as laid out in sections 87,88 and 89 Consumer Credit Act 1974. Section 87 makes it clear that a default notice must be served before a creditor can seek to terminate the agreement or demand repayment of sums due to a breach of the agreement. therefore without a valid default notice, I suggest the claimants case falls flat and cannot proceed and to do so is clearly contrary to the Consumer Credit Act 1974

• Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but give me a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119

mrmr

Hi,

Thanks for the information. I will do as you suggested.

Thanks

niccatw

http://www.adviceguide.org.uk/

Have a wee look on the CAB website to see if any of your questions can be answered that way. I'm in Glasgow and know they have an "e-bound" CAB centre, who respond to emails. If you are in Scotland, that might be useful. If not, perhaps check whether the same is available in England or Wales.

I empathise with your difficulties with your eating disorder and depression. Though my situation is not as extreme as yours, I am underweight and do have anxiety attacks so completely understand that you want to keep savings for hospital appointments and getting help when you need it. Though, if your debt is part of your health difficulties, then seriously think about using even a part of the savings to lower it a little, if you think that would help you.

Take care