Post bankruptcy clean up

Icanandwillsavemoney

Hi

I was discharged 2nd November and am now starting the clear up.

I have requested my credit files and on checking them over I have come across the following:

1) 7 accounts not showing as settled, only default dates. All default dates are either pre-bankruptcy date or between bankruptcy and discharge date so happy with them. I have my letters ready to send asking for settled status to be applied to each of them but.... 2 are secured loans and I wondered if the same rules applied to them?

2) One debt included in my bankruptcy was a store card. It shows a default date of 21/04/07 but not settled. Am I better to leave this alone to drop off the report on 21/04/2013?

3) My mortgage shows a settled status and a settled date of 08/07/12 but no default. When will this drop off the credit report?

4) One CCJ registered 16/03/10. Will this drop off 16/03/2016?

5) One creditor (credit card) does not show a default date or settled date although it was included in the bankruptcy and is showing as a 6 right up to last month with the full balance showing as outstanding. How should I approach this one? It appears to be an active account :-(

Any help/advice would be appreciated

Thank you

ICAWSM

fermi

1) Default dates should be on or before your BR date. if they are between your BR and discharge date, that is wrong. Secured loans can work a bit differently. Depends what happened with them and whether they went into the BR in the end.

2) Up to you. May not be worth the bother doing anything because as you say it will be off your report soon regardless.

3) 2018 by the looks of it. Was this subject to repossession/inclusion in the BR in the end?

4) Yes.

5) That is wrong. A debt being covered by a BR is a clear default, so the should not be recording a string of 6s. You need to complain that it is inaccurate and that they should have defaulted the account correctly.

Icanandwillsavemoney

fermi wrote: »

1) Default dates should be on or before your BR date. if they are between your BR and discharge date, that is wrong. Secured loans can work a bit differently. Depends what happened with them and whether they went into the BR in the end.
Ahhh right, I will make sure the letters state amend default dates to 02/11/11.
2) Up to you. May not be worth the bother doing anything because as you say it will be off your report soon regardless.

3) 2018 by the looks of it. Was this subject to repossession/inclusion in the BR in the end? It was voluntarily surrendered and the debt rolled into the bankruptcy once sold. It sold in May 2012, 6 months prior to discharge.

4) Yes.

5) That is wrong. A debt being covered by a BR is a clear default, so the should not be recording a string of 6s. You need to complain that it is inaccurate and that they should have defaulted the account correctly.I will make sure letter asks for default date to be added and settled status to be applied.

Thank you so much for your extremely quick reply, really appreciate your help.

fermi

Extracts from guidance that may help.

https://forums.moneysavingexpert.com/discussion/3172602

A record showing a series of payments as six months in arrears when this does not reflect the real payment history should not be used as an equivalent of a default.

10 Indicators of a default

The following indicate that a breakdown has occurred in most types of product (excluding those in the section on Exceptions at paragraphs 12-15). This list is not necessarily exhaustive.

• The account has been referred to a collection agency or in-house debt collection department.
• The account has been referred for legal action.
• The account has been included in a bankruptcy, IVA, or similar.
• The asset financed has been repossessed or instructions for repossession have been given.
• The lender takes or has taken steps to cut off the service provided (or would do so if they were not prevented on social rather than commercial grounds or by other regulations, codes of practice or statute).
• The customer has not made satisfactory proposals in response to a demand for repayment.
• The customer has given a clear indication, for example, by handing back an asset, that they do not intend to meet their contractual obligations.
• The lender has evidence that an account has been opened or used for fraudulent purposes by the applicant.

14 Long-term secured loans

Although long-term, secured loans, such as mortgages, are likely to involve monthly repayments, they are an exception to the general standard. The existence of a secured asset which, if repossessed, will indemnify the lender, and the length of the term involved, distinguish this category from the majority of products. This may mean that the lender is prepared to allow the customer greater latitude if the account gets into difficulties. A lender may decide that, even though one or more of the above indicators has occurred or more than six months has passed without a payment being received, there is no breakdown until they have decided to take possession of the asset. Nevertheless, there are practical problems facing lenders in these circumstances because in some cases, even after court action to gain possession has been taken, a customer will go on to repair the relationship by starting again to pay on a regular basis the contractual sums (or at least an agreed compromise sum that would constitute a variation in payment terms as indicated in paragraphs 17 -23).

If meaningful information is to be reported to credit reference agencies there needs to be a consistent approach by lenders that also needs to take account of the practical problems they face. This is also necessary to treat all customers in this situation fairly. Consequently, a lender should file a default no later than six months after the date of a successful court application to proceed with possession unless

• the customer has made reasonable and agreed arrangements to repay,
• the lender can justify not filing a default on an exceptional basis. For example, the lender is fully informed of the circumstances and knows that payments will start again, or
• the loan has been included in a bankruptcy in which case the default should be filed in accordance with the guidance in paragraphs 47 – 48.

In rare circumstances the court can grant possession on conditions that delay physical repossession for a long period of time, even though the customer is not making an acceptable agreed level of repayment. This is usually on compassionate grounds. In these circumstances the lender should record a default within the six month period of the order date.

Relationship of defaults to CCJs, decrees, bankruptcies, IVAs and similar arrangements

46 We do not see any inconsistency in filing defaults relating to debts which the lender has also tried to recover through a CCJ or decree. Of course, the default must not be filed as being after the date of the CCJ or decree.

47 In normal circumstances lenders will be notified when the debt that is owed to them is to be included in a bankruptcy or IVA. In these cases lenders should file a default relating to an account that is included in an IVA or bankruptcy as soon as they receive the notification. In principle, a default should be filed as being no later than the date of the IVA or bankruptcy. We understand that on some occasions a lender does not immediately become aware of the court’s decision. In these cases, we are satisfied if a lender files a default when they become aware of the position, providing the delay is only relatively short. In these circumstances a lender should backdate the default filed to the date of the bankruptcy or IVA if the customer requests this. Where a credit agreement, for example, hire purchase on a motor vehicle, is not included in an IVA or bankruptcy, then it should be treated separately from the debts included in the IVA or bankruptcy and not be automatically marked in default. Similarly, where there is joint and several liability, and one party becomes bankrupt, then the account should not automatically be marked in default, because the other party will be responsible for it and may maintain payments.

48 Where a customer continues to pay a debt in line with the original contractual obligations, despite the debt being included in a bankruptcy or IVA ( including where the bankrupt agrees with Official Receiver that payments will continue), the lender would not be obliged to record the account as in default. If the customer stops payment at a later stage, the default recorded should show the date of the IVA or bankruptcy and the fact that it was settled only by IVA or bankruptcy as described in paragraph 51.

Icanandwillsavemoney

You are a mine of information!!! Thank you so much. All letters hopefully corrected now.

Once again, thank you for helping me to get this right.