Help!Debt paid but still there is a problem!!

TC1980

Hi,
A few years back my wife got into debt. The short of it is that she was getting arrears letter from 4 creditors and then debt collection agencies that the 4 creditors had passed the debt onto. Eventually she got help from a debt management company who set up a 5 year payment plan.
About a year ago I came into some money and paid off what was left of the debt. I contacted the debt management company who arrange final figures to be paid, in all cases they were a bit less than the outstanding amount and we now have letters confirming full and final settlement on each account.

12 months on and we have signed up to view her credit report. Although it still looks bad we had hoped that next to each of the 4 default accounts they would say default but settled. This is true for 3 of them. The one that doesn't we still receive Arrears letter (about every 6 months) asking for the remaining balance and with each letter her credit file gets another black mark and her credit score drops.

I contacted them to ask why if we have a full and final settlement on the account do they send the letters which further damage the credit report.

They say they aren't chasing for the money as there system says that no payments are required but they have to send the letters by law to anyone in arrears on an account.

I didn't think this was right as I thought a full and final settlement letter on the account would be the beginning of the end of the matter and the account on the credit file would say settled. So I continued to ask questions.

They then told me that the full and final settlement was agreed and paid to the debt collection agency that was working on their behalf. This is true as that is who we paid and where the full and final settlement letter came from, the letter stated the account was marked closed and will be returned to their client.
They are now saying that although they aren't chasing for the money, the full and final settlement was with the debt collection agency and not them and they will continue to send the arrears letters. (They did say one way to stop the letters was to pay the amount.)

With each letter she will continue to get a further hit on her credit score. Now I know that the default will remain on the file for up to 6 years and it will be slow to rebuild the credit score but surely this account must say settled if we have paid an agreed figure to them or an agency working on their behalf and not do further damage to the credit score. Also will it stop after 6 years or could it continue if we don't do anything about it?

Tixy

Hi

It really depends on the agreement that was made at the time and the wording of any letter - the letter we advise using for F&Fs states what entry will be put on the credit file and we advise getting in writing that neither they (the person you write to) or anyone else will chase you further in respect of this debt.

Usually the agreement would be that it is marked as partially satisfied on the credit file.

The whole account and the default will disappear from the credit file 6years after the date of the original default - how long have you to go until then?

When you have been contacting the creditor has this been in writing or by phone? If you've only done this by phone so far I would suggest trying to write to them explaining that the debt has been settled in full & final settlement with X DCA and that you want the credit file updating to reflect this and confirmation that you will receive no more paperwork from them (also include a copy of the F&F letter you have). Send the letter signed for - maybe this will have more luck in getting them to stop writing.

TC1980

Hi Tixy and thank you for your reply.
The original default was in 2009 so she has a few more years left before it will disappear altogether.
We have so far only been contacting them by phone, which is why we do seem to get inconsistent responses. I will try a letter as you suggest and see if I can get it resolved that way.

Thanks again for your help