Technical question - when would they default a credit card?

foundationsmcr

Hi people, I'm currently out of work having been made redundant in May. My wife works full time, and until now we've had a great credit history, fully UTD with our mortgage, 2 credit cards and 2 unsecured loans.

We've obviously made some cutbacks in our expenditure, but the job hunt is dragging on and we now face having to make serious decisions about our unsecured debts and mortgage.

I understand it's better to default on unsecured debts first, but my question is when would the default notices be issued? I know in theory it should normally occur after 3 monthly missed payments, but our current Lloyds credit card min payment is £221/month, if we reduced this to £100 would they;

1) immediately issue a default
2) wait 3 calendar months (£363 arrears), or
3) wait until we had missed 3 months cumulative "full" minimum payments (£663 arrears) which would take just over 5 months?

Likewise with the loan payments? Is there a standard practice and can we negotiate with them to request that they don't issue a default whilst we get ourselves back on our feet.

We're really stressed about the situation, to make matters worse, the wife and I had been trying for a baby and found out we were pregnant the day the business unexpectedly shut it's doors in Administration and sent us all home redundant.

Any help would be appreciated.

[Deleted User]

If you were to speak to them and come to an Arrangement to Pay, then it is unlikely they would default you at all in the short to medium term.

However, AP markers themselves obviously come with their own impact to your file.

foundationsmcr

Deleted_User wrote: »

If you were to speak to them and come to an Arrangement to Pay, then it is unlikely they would default you at all in the short to medium term.

However, AP markers themselves obviously come with their own impact to your file.

Thanks for the reply.

Really? That's surprising to hear. I assume in that case that an AP marker would be deemed less damaging than a DN though?

Would you recommend getting the agreement in writing so as to be able to evidence the arrangement in the event of any problems?

thebritishbloke

An AP marker will not be as damaging as a default, so long as you eventually settle the account.

Always handy to get the agreement in writing.

happy_bunny_2

Defaults will be gone in 6 years. Should default within 6 months of not paying.

Obviously, may get a CCJ. When were the credit cards taken out?

APs stay 6 years from date account paid off. So could be around for 10 years plus.