Getting a default removed after full and final settlement

tonym_dj

Hello,

I've recently finished a DMP and paid all but one of my creditors the full balance.

My DMP was managed by Step Change and in January this year I had 85% of the full outstanding balance and was advised to make a full and final settlement. Only one of my creditors accepted the offer which reduced my final payment by just £173.00. I therefore found additional funds and cleared a total of almost £14,000.

What I hadn't realised and what wasn't fully explained to me was that by accepting the reduction of £173.00, Santander would place a default on my credit file. I hadn't realised the significance of this as whilst on my DMP my other creditors placed default notices on my file each month for several years but the Santander account was always OK (presumably because under the DMP I was paying more each month than the minimum amount prior to the DMP).

Over the past couple of weeks I have been in touch with an independent mortgage advisor. After several days of back and forth the underwriters have come back and said that had the Santander default not been on my file they would have given me a mortgage but due to that specific default they won't.

The reason for this is the default wasn't placed on my file until April which is two months after my other creditors have shown the debt was cleared and that the fact the account was OK/green up until they accepted a PS (partial settlement).

The question is, is there any way I can have the default removed?

I'm kicking myself that I managed to let this slip through the net and that £173.00 could be the difference between me being accepted for a mortgage now or having to wait another 18 months before they'll consider me with the default on my file.

Hooloovoo

The only way you can get a default removed is if it is wrong. Your credit history shows your history, even if you might not like some of it.

thebritishbloke

Only thing you can do about it is try and contact Santander and appeal to their better side. At the end of the day, you wouldn't think you'd get a default for settling the debt, I'd have thought you'd just get a Partial Settlement marker.

tonym_dj

Thanks for your replies.

I think it's the fact that at no point was it explained that I would receive a default for a partial settlement and had that been explained I would have found the extra funds and cleared it.

It does seem bizarre that I receive a penalty for clearing debt two years early, after all they didn't have to accept the offer. That's for another day though.

I'll write to Santander and see if there's anything they can do.

Thanks again.

Hooloovoo

thebritishbloke wrote: »

At the end of the day, you wouldn't think you'd get a default for settling the debt, I'd have thought you'd just get a Partial Settlement marker.

You don't get a default for settling a debt.

You get the default for not paying the required amount at the required time. If you then go on to settle the debt it doesn't change the fact that you defaulted.

tonym_dj

So although Santander accepted a partial settlement there was a £173.00 balance which wouldn't be chased but non payment would result in a default. That is what wasn't explained.

I was told it would appear as a partial settlement not that failing to pay the balance would trigger a default.

Damn, I was so excited to finally clear my debts that I dropped the ball which is now going to cost me 19 months for the sake of £173.00. Damn, damn, damn.