HSBC issued default notice - what does this mean?

lolo06

hi everyone.

really need some help becuase im a bit confused. i have a managed loan with hsbc which is arrears of about £970. this is due to my husband losing his job and us not being able to make the repayments.

today i recieved a default notice. i have no idea what this means and the letter is not clear. i know they have a points system and if your 7 points/months behind on the repayments then they issue this notice. last time i spoke to them they said i was at 6.7.

can you please explain what this means and whats going to happen to the loan.

many thanks.

DarkConvict

A default notice means you have defaulted on the contract, in this case making monthly repayments. It generally occurs after ~3 missed payments in most contracts.

What this means is that you still owe the money to HSBC but now the agreement is broken you will fall under the terms and conditions set out in yoru agreement for when this happens. Generally this is a termination charge/admin fee and a demand to be repayed in full.
If you can't repay it will then be passed to their collections department who will ask for payment or they may pass it onto a debt collector who will hassle you until they get paid. If the loan is of a sizable amount they may go for a CCJ to secure the debt. Unless a CCJ is granted and the terms broken, only then can bailiffs be used.

The default is put on your credit file for 6 years making it harder and more expensive to get credit.

MrsTinks

A default notice has to be issued when they are going to place a default on your account with the credit reference agencies for starters. What happens to the loan now could be any number of things - if you are making SOME payments to HSBC then they may be willing to hang on to the debt in the hope you will be able to make the payments soon. They may decide to sell it to a debt collection company or appoint one to try and recover the money on their behalf. Lastly they may decide to go through the courts and get a CCJ against yoru husband. That would mean a judge sets a monthly payment that must be made, if it's not then the creditor can get bailiffs called in, an attachment of earnings, a charging order etc - this is way down the line and shouldn't happen so long as you make any CCJ payments the court orders.

There is no "they will definitely do this next" to any actions that your creditors may take - although it might help you if you start looking into a DMP if you haven't already. Sometimes it will work in your benefit to use one of the recognised charities as they can have a bit more clout with the creditors...