Is it Legal to Sell on a non-defaulted debt??

TeaUK

I have just found that a former debt I had was not defaulted, even though I assumed it had. (Note: I paid the debt in full, but the 'Settled' on my credit file means my CRF will be bad for around 12 and a half years, even though I paid it off in full and never missed a payment during 6 and a half years on a DMP with CCCS.

The debt was sold by MBNA to Idem Servicing.

Is it legal to sell on a non-defaulted debt?

Many thanks.

happycamel_2

Yes, a debt is just an asset to a company.

TeaUK

Thanks.

Reading up on the CCCS site, it states:

A default notice will tell you that if you can’t pay, your account will be cancelled and ‘defaulted’. This means you won’t be able to use the facility to borrow money. The creditor can then:

Demand the full balance is paid immediately
Sell the debt to a debt collection agency
Begin court action to recover the debt
If the agreement is hire purchase, start proceedings to take the goods back

The creditor can only carry out these actions after the account has defaulted. If you pay back the amount stated within 14 days, no further action will be taken. If you miss payments in the future a default notice can be issued again.

Thanks for your response.

happycamel_2

Selling a debt to a DCA implies that the terms of the loan have been broken.

A loan can be sold to another company without a default and it should be collected on the original terms (for example, when Santander bought Abbey it made no difference to the mortgage holders, similarly just a debt can be bought without buying the company).

But, if the loan has been defaulted then it could be sold to a DCA who could pursue for full payment, send collectors etc.

if the loan hasn't defaulted then the debtor should just continue their monthly payments to the new owner of the debt, after confirming with original owner that it has been sold.