Debt into default

Litchielou

Sorry if this has been asked before.
My DS and DIL are over £30000 in debt, have come to us last night for help. Thank goodness.
Before it gets any worse.
My question is what does it mean when it states Debt falls into a default.
Thanks for everyone's help.

sourcrates

Hi,

If you don't keep up with your contracted payments on a loan, credit card, whatever it may be, you have broken the terms of the agreement you signed, so you are in default of those payments.

A default notice will tell you this, it will outline what you need to do to bring the account back into good standing, and by when.

If you don't take the action required, ie, pay whats overdue, then the account will be defaulted/closed, and the full balance becomes payable.

A default will also be registered on your credit file.

This is basically the legal process a creditor has to follow to comply with the consumer credit act, in reality you don't need to worry about defaults, they are a step in the process, you will still be able to work out payment plans either with the creditor, or any debt collector that may become involved.

More info here :

https://www.stepchange.org/debt-info/debt-collection/default-notices-and-missed-payments.aspx

Stepchange is also the place to go for advice on dealing with the debts.

Litchielou

Thanks for replying. Just trying to get information re debts together.

fatbelly

Default notices go with the territory in the world of debt. They are generally regarded as a good thing because they mean the whole sorry saga will drop off your credit file 6 years from that date.

I note the stepchange link says 'A default notice will suggest you contact a solicitor or Trading Standards for help. You don’t need to do this. The wording of default notices was set in a 1983 law, before free debt help from charities like us was widely available.'

That's slightly disingenuous as the required wording actually says 'IF YOU ARE NOT SURE WHAT TO DO, YOU SHOULD GET HELP AS SOON AS POSSIBLE. FOR EXAMPLE YOU SHOULD CONTACT A SOLICITOR, YOUR LOCAL TRADING STANDARDS DEPARTMENT OR YOUR NEAREST CITIZENS` ADVICE BUREAU”.

Now while it's true stepchange didn't exist (nor Payplan) at that time, and both are fee-free sources of help, the CAB did and (just about) survives to this day as a source of free and impartial advice. Likewise, National Debtline, which was created in 1990 out of an earlier project.