Default - not settled after 6 years??

Bizhub3

Can someone give me a bit of advice please?

In 2009 I separated from my partner and I was left to pay all the home priority debts by myself. At the time I had two credit cards, one with Halifax and one with Virgin Money and I wrote to both them and explained that I couldn't afford the minimum payment but offered to pay a reduced amount until my circumstances improved. I had never missed a payment or been late up until this point. Virgin Money agreed, however Halifax slapped a Default on my account (despite me being a Halifax Current Account Customer). They referred my account to a Debt Collection Agency and since this time I have been paying £100 per month, without paying any additional interest.

In 2016 my default will have ran its 6 year course. As I am only paying £100 off the debt, by the time 2016 comes around, the debt will still not have been settled. So my question is, what will happen in 2016 after the 6 year period has elapsed? Will the Default just drop off my credit file? Will I still have to pay the £100 per month? Im confused! I cannot afford to pay any more than the £100 per month but really don't want this hanging around my neck for years to come as it is still affecting my credit file. Any advice is appreciated. Many thanks.

Bizhub3

I should mention that ive not for a IVA or a CCJ.

Thrugelmir

You'll continue to pay the debt until it's repaid or you come to an agreed settlement with the creditor. So up to you how you address this.

Bizhub3

I have no problem paying the £100 a month - it is my debt after all but just wondering whether the default will drop off after 6 years so I am then able to obtain credit as my credit score will improve? Or will I still have problems obtaining credit because im with a debt management agency?

fermi

Yes, the default and account will drop completely off your credit report after 6 years no matter what.

foxabilo

fermi wrote: »

Yes, the default and account will drop completely off your credit report after 6 years no matter what.

Forgive me ignorance of the issue but I have been told by my FA that a single payment resets the date at which the 6 year limit applies. I could be be completely wrong but I had a 6 year old debt which was at the time in dispute but still a CCJ, 6 years and a few weeks..... it vanished from my credit record, I was advised to do this, and indeed it worked, the debt was relatively small 1.5k, now it has gone, a year before it was present and actively killing my credit.

Best

Fox

fermi

Nope. Sounds like your FA as getting 2 very different things mixed up, that just coincidently each have a 6 years time scale attached to them.

(1) Credit account entries on credit files are ALWAYS removed 6 years from the account default date, no matter what.

A CCJ is a slightly different sort of record in another section of your credit report, but likewise that is always removed from your report 6 years from the judgement date.

Making a payment on either of those never ever resets or extends the 6 years period for them to stay on your credit files.

They drop off after 6 years no matter what.

(2) The statute of limitations for many types of debt is 6 years, which is the time scale a creditor has in which to start legal action against you if they are going to do so.

For that, yes, making a payment or acknowledgement does restart the 6 years from the beginning again.

But as said, it's a time limit to take legal action (no more), and has nothing to do with and no impact on how long defaults stay on your credit files.

It seems that your FA is getting the 6 years rule for (2) mixed up with the separate one (1) for credit files?