Help for friend - defaulted loan disappeared from credit report.

HampshireMummy

Hi,

I'm posting on behalf of my friend. Back in 2005, she defaulted on a secured loan and also her mortgage. Her husband had lost his job and she was on maternity leave, so they ended up in real financial difficulties. He found another job, but was on nowhere near the same amount of money and she couldn't afford to go back to work, as nursery fees would have swallowed up her wages each month.

anyway, they lost the house. Their mortgage was repaid when the house sold at auction, but out of the £50,000 secured loan, £35,000 was still outstanding. They wrote to the loan company putting forward their repayment offer, had it accepted, but then never heard from them again. Stupidly, she thought they had forgotten about the loan, I know, I know, silly girl. She had a Default on her credit file for the £35,000 which was registered in December 2005. She recently checked her credit file online and there is no sign of this default.

Surely, if the money is still owing, the default wouldn't just disappear like that, or have they just written the loan off. She's confused by this and doesn't know what to think. Will they start chasing her again or have they accepted that the loan wasn't repaid?

Thank you in advance for any help you can give.

HM

poppasmurf_bewdley

A default comes off the file after six years, whether it's been satisfied or not.

If your friend hasn't made a payment or admitted the debt in those six years, it's probably statute barred now.

MentalMinnie

With it being such a massive amount, can the loan company legal pursue it?

XXLEAXX

hi, defaults drop off your credit file after 6 years from the date it was defaulted(weather is paid or still outstanding) Im not sure if the creditor could still chase your friend for the amount owing,im sure someone else that knows abit more than me will reply!
hth

Tixy

poppasmurf_bewdley wrote: »

A default comes off the file after six years, whether it's been satisfied or not.

If your friend hasn't made a payment or admitted the debt in those six years, it's probably statute barred now.

The date the statute barred period would run from would likely be the date the letter was written that offered the repayment plan to the loan company.

As its loan secured on the property its possible it would be 12years before it becomes statute barred (like a mortgage shortfall) rather than the usual 6years. I'm not certain it would be but if the creditor start chasing the debtor then it might be worth checking for certain (contact somewhere like national debtline) before they reply to state its statute barred.

poppasmurf_bewdley

MentalMinnie wrote: »

With it being such a massive amount, can the loan company legal pursue it?

I assume you mean 'legally' pursue it!

They can, but if the debt is statute barred, then the person owing the money doesn't have to pay so long as they follow the correct procedure as outlined in numerous threads on this forum.

HampshireMummy

Hi,

Thanks for all the replies. She wrote to them end of November 2005, the default appeared at the beginning of December, and she heard back from them in mid December 2005, stating that they accepted her offer and giving her a direct debit mandate, which she returned as soon as she received it, but no direct debit was ever set up.

She just couldn't believe that the default has gone and they've never taken any money.

Thanks again.

HM

Giraffeseeker

A similar thing happened to my ex. Took a loan in his own name to help his business. It was on some kind of 6 month payment holiday thing before he started paying. DD mandate was signed etc.

After 6 months no payments started. He couldn't really afford it so kept quiet (I didn't know at the time). He kept checking credit report for a default but none came although the debt was listed on there. We hadn't moved or changed banks.

One day he received a statement that said opening balance £20,000, adjustment 20,000, closing balance £0. We assumed it had be sold to debt collectors. We never heard a thing again and the account disappeared off his credit report after several years. It has not been statute barred for around 4 years and as far as I know he's never had contact from them.

I just assumed I think that there was some kind of major !!!! up with the credit agreement so they weren't going to try and collect - can't think what else could have happened. The bank was "If" which I seem to remember was halifax?

nottoolate

HampshireMummy wrote: »

Hi,

Thanks for all the replies. She wrote to them end of November 2005, the default appeared at the beginning of December, and she heard back from them in mid December 2005, stating that they accepted her offer and giving her a direct debit mandate, which she returned as soon as she received it, but no direct debit was ever set up.

She just couldn't believe that the default has gone and they've never taken any money.

Thanks again.

HM

would be statute barred now then