Default account with Arrow and Lowell

angola

Hi

In 2010 I had an accident that left me in hospital for some time and because of that i lost my job for a while. I lost control and as consequence i got some Debts that i started to pay at the end of 2010 once i got a job again.

Recently when i went to my Creditcall report i discover that a Debt of £750 was in name of Lowell Group and a Debt of 1.300 from credit card was Arrow Global. Both Deb collection agencies and both they bought the Debt from other companies but wich I didn't know about this.

In spite since 2010 I have paid all my Debts and I have since then a very good credit history, because of this my credit rate is very low and i can't get a mortgage.


I wrote them saying that I would like to Pay but I needed them to remove the Default from my account. They said that they can't remove the Default for 6 years and that the only thing they would do is mark the account as Satisfied or Partially Satisfied.

I have 2 questions :
1. What is the impact on the Credit Score/Report is the Default is still there but the Account status is changed to Satisfied ?
2. Is there a way of taking this Default out ? Specially because this happen in 2010, I was not aware that the Debt was sold to these companies and they are marking Default until now.

Finally one last set of questions:
1. Should I pay in full ? What if I pay and they don't change the status ?
2. Can I pay in instalments ?

Any help on this would be much appreciated.

CherlokHomes

Answer to the questions.

1. What is the impact on the Credit Score/Report is the Default is still there but the Account status is changed to Satisfied ? The impact of a default is massive in terms of gaining credit as it shows you're very high risk
2 2. Is there a way of taking this Default out ? No company's HAVE to issue these per T&C's of the contract

3. Should I pay in full ? What if I pay and they don't change the status?You can but having a Default satisfied won't get it removed and will make very little difference and will still Stay on your credit file for 6 years whether you've paid or not

matttye

The effects of defaults - at least satisfied ones - lessen over time, but still have a major effect on your ability to get credit.

E.g. I have two defaults and an arrangement to pay that are now five years old, all satisfied. This time last year even the subprime lenders were picky about lending to me, but I am now accepted for most things I apply for, although I still don't qualify for mainstream credit (and accordingly haven't applied for any in some time). Companies seem to be willing to lend me more than previously too.

As for whether you should pay in full or not, are these companies still adding interest to the debts? If so pay them as quickly as possible.

Forget about getting the defaults removed, the best you can do is have them marked as satisfied. What you can do though is get yourself a sub-prime credit card, borrow on it and pay in full every month. That helps a lot.

If you can't get a credit card you might be able to get a phone contract, which will have a similar effect. You need to show lenders that you are now a responsible borrower.

Thrugelmir

If your longer term aim is to obtain a mortgage then settling in full is the way to go.

The fact that the debt was sold on is of no consequence. You owed a debt to someone that you failed to pay. So doesn't matter who owns it.

neil_9999

You don't mention who the original debt was with? A company can only mark a default on your credit file if they can prove that they told you, in writing that they were going to do so.

So the first thing I would do is contact the debt collectors and tell them you have no memory of the debt - please prove it with a statement from their client.

If they don't - don't acknowledge the debt, don't pay and tell them to clear your credit file. If they do - ask them to prove that they informed you they were going to mark your credit file with a default.

If they can't prove this, again ask them to clear it. If they can...time to pay up! Though they may accept a settlement for less than the original debt.

I have had much success personally with this.


Defaults on your credit file are never a good thing, though settled accounts are better and the negative affect lessens as time goes on. Never fear though...I have two defaults from 3yrs ago and a few accounts with a lot of missed payments from around the same time...AND I got a mortgage 6 months ago.

matttye

neil_9999 wrote: »

You don't mention who the original debt was with? A company can only mark a default on your credit file if they can prove that they told you, in writing that they were going to do so.

So the first thing I would do is contact the debt collectors and tell them you have no memory of the debt - please prove it with a statement from their client.

If they don't - don't acknowledge the debt, don't pay and tell them to clear your credit file. If they do - ask them to prove that they informed you they were going to mark your credit file with a default.

If they can't prove this, again ask them to clear it. If they can...time to pay up! Though they may accept a settlement for less than the original debt.

I have had much success personally with this.


Defaults on your credit file are never a good thing, though settled accounts are better and the negative affect lessens as time goes on. Never fear though...I have two defaults from 3yrs ago and a few accounts with a lot of missed payments from around the same time...AND I got a mortgage 6 months ago.

I don't think you're right about them having to write before filing a default with CRAs.

Section 87 & 88 of the Consumer Credit Act deal with default notices but mention nothing about filing defaults with the CRA's.

s.87 - Need for default notice
(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,
(a) to terminate the agreement, or
(b) to demand earlier payment of any sum, or
(c) to recover possession of any goods or land, or
(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or
(e) to enforce any security.
(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.
s.88 - Contents and effect of default notice
(1) The default notice must be in the prescribed form and specify
(a) the nature of the alleged breach;
(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;
(c) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.
(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those seven days have elapsed.
(3) The default notice must not treat as a breach failure to comply with a provision of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1)) if the seven days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.
(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it.

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid.

Unless I'm missing something.

neil_9999

A difficult one I admit - could be argued either way.

(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred

Surely marking a default on your account would be classed as restriction.

(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those seven days have elapsed.

To me this says the creditor cannot take any action until 7 days after you've been served with a default notice. If you never had the notice, you can't remedy the situation.


However it is a bit wooly I agree...

angola

Thanks to all :-)

So in summary :

1. I can't remove the Defaults
2. better to Pay in full and get it satisfied
3. Before I pay shoud ask them fro the prove of the Debt, if they can't prove then they have to cancel otherwise i have to pay.

One question:

Is there any template for the document requesting this ? and what kind of document they should present as a proof of the debts ?

regards