Some advice with a default

georgie_p

A little background: I've had a Capital One credit card account since 2014 and have always been up to date on my payments, until recently, paying any outstanding balance off in full each month. However, in December of last year I became very unwell and ended up in hospital for a few months. My partner contacted Capital One to inform them of this, as I was unwell and unable to make any payments as I was out of work. In April I contacted Capital One via email to explain the situation, and had been in touch with Step Change to get some advice about the debt I have now incurred since being unwell.

I have arranged a payment plan with Capital One to pay off £54 per month for the next 8 months - they've agreed not to charge me interest during this period and have refunded any late/missed payment fees since I've been unwell which is great. However, they have made it very clear they won't amend the default on my account so that this will show on the credit agencies sites as I've defaulted. This is really frustrating as until I was unwell, I had always kept up with payments and paid off my account in full. It feels really unfair that I am now going to be penalised for the next 5 years because I have been hospitalised.

I understand Capital One have to display a representation of what's happening on my accounts, but I have now set up an agreement. I don't suppose there's anything I can do to help my situation? I know this is a bad way of looking at things, but if there's going to be a default on my credit report for the next 5 years, am I doing any good to my report by paying off what I owe? Surely it doesn't really matter if I have already defaulted? (I realise that's an ignorant and poor way to look at things).

Any help/advice would be greatly appreciated.

Georgie

[Deleted User]

georgie_p wrote: »

Surely it doesn't really matter if I have already defaulted? (I realise that's an ignorant and poor way to look at things).

Yes. That's a very ignorant way to look at it.

But even if you don't care about that, think about whether you will care if the default leads to a CCJ because you refuse to pay what you owe.

The sooner you pay, the sooner your credit file improves.

georgie_p

For me it's just frustrating that I've missed a few months of payments as I've been hospitalised, but I can now make those payments. I've set up a payment plan which both parties have agreed, yet I'm going to receive a default on my account.

I guess what I was trying to get at was that a default, or a CCJ or a [insert another bad credit mark here] are all the same as each other? If a lender looks at a credit file and sees those things, one isn't worse/better than the other. I'm just frustrated about it all.

[Deleted User]

A CCJ is horrendously worse than a default.

But I sense you may need to find that out the hard way.

georgie_p

Deleted_User wrote: »

A CCJ is horrendously worse than a default.

But I sense you may need to find that out the hard way.

Hence the question in my previous post; I don't know if it's worse or not, so telling me I'll find out the hard way is not really conducive to the conversation.

You seem to have focused on one sentence from my original post. I was asking if there was anything I could do about the situation, whether other people had been in similar situations where they've fallen incredibly ill and are trying to rectify a situation like this.

[Deleted User]

georgie_p wrote: »

If a lender looks at a credit file and sees those things, one isn't worse/better than the other.

I didn't see this as being a question. It looked like a statement. Hence my reply.

You can appeal if they will remove the default, but it's an accurate reflection of what happened, so you will be entirely reliant on goodwill.

Your chances are slim.

georgie_p

How does one appeal such a thing?

[Deleted User]

You'd write to them, giving your reasons. Your case would be helped if you were more quickly able to pay off the arrears on your account though.

StopIt

georgie_p wrote: »

For me it's just frustrating that I've missed a few months of payments as I've been hospitalised, but I can now make those payments. I've set up a payment plan which both parties have agreed, yet I'm going to receive a default on my account.

I guess what I was trying to get at was that a default, or a CCJ or a [insert another bad credit mark here] are all the same as each other? If a lender looks at a credit file and sees those things, one isn't worse/better than the other. I'm just frustrated about it all.

Capital One can remove the default and instead change the markers to AP (Arrangement to Pay) instead.


You'd be doing more damage to your credit history as a default drops off 6 years post default, AP stays for 6 years after the last payment. AP markers are treated as basically a default by many lenders.


Now, once you've got this sorted, save up an emergency fund. As you have found out, a change in circumstances has done a great deal of damage financially. It is up to you not your lenders to cover these sorts of eventualities.


I'd advise not asking the default to be removed, lest the unintended consequences be worse than the thing you're trying to get rid of.