What happens when I pay a defaulted account?

MrCJW

Hello.

I have spent the last few years living fairly comfortable and keeping on top of the payments on the loan I have. My bank account is not overdrawn (it can't be, I only have a Visa Electron), and the only other credit account I use is my phone which is paid each month. I have recently got married, grown up substantially, and starting to settle down in my life.

Trouble is, I was not always so on top of things, and around 5 years ago I had a bank account with Lloyds TSB. I stopped using the account, and it was no more than a few hundred overdrawn. I then buried my head in the sand and refused to think about it. Bad form I know, but this is the situation I am in and I desperately need to resolve it for the sake of my health and my marraige.

I got a copy of my credit file from Equifax, and it has listed on it the Lloyds TSB account with "defaulted" as the status, and the balance of £1,182.00.

My 1st question: When I pay off the account, which I should be able to do in one payment, will the status of the account still show as defaulted?

Secondly, I also had a credit card with a limit of £500 - same situation, buried head in sand and did nothing about it. This is shown on the file twice - once with the credit card company, and once with "Cabot Financial", who have listed it as a default.

Surely the same debt can't be registered twice as a default? If this is the case, how do I get one of them to remove it? Again, I intend to pay it off in one go.

Given these are reletively small balances, but with some terrible management, how long until my credit file starts to look favourable again?

Finally, the accounts are all in my name, what effect does this have on my wife's credit file? We have one joint account together which we use for paying bills - it's particularly well managed by my wife.

I know this mess is all of my own creation, and I can't beleive I let myself get to this point. As I said I really need to get this huge weight off my mind. Any advice anyone can give me will be gratefully received - I really need to kow where I stand so I can start rebuilding.

Tixy

If you have a joint account its likely that you show as financial associates. Does she appear as an associate on your file? If so you could consider taking your name of the joint account and then her applying to be financially disassociated from you (filling in a form with all three agencies).

If you pay off a default you then ask the creditor to mark the default as satisfied. However a default will drop off your credit files 6years after it is registered whether you repay the debt or not.

You may also want to consider that if you went 6years without writing to acknowledge the debt or making any payment towards a debt then that debt would become statute barred and you could not be made to pay it (assuming no CCJ is obtained before that 6year period).

With regards to the cc debt, you are correct, it should only be registered once. And when a default is registered the date given should have been when you actually defaulted (usually with 3-4months of non or low payment). Also they should have sent a formal default notice to the address that they held at that time.
If it shows as owed to a DCA then the original creditor entry should no longer be there - you can write to them to insist it is removed - although this will obviously start them chasing you for payment.

So it looks like your file will start to improve after 6years from the date of the most recent default.

Hope that helps