Default - Can I dispute

Trishtash

I wanted to find out if I can dispute a default that’s going to be added onto my credit file.

It’s for a loan and I have missed payments due to being in hospital for a few months. They loan provider was informed and made out it was ok a hold would be put on but since coming out I’ve seen threatening letters from them which I couldn’t reply to and stuff on my credit file.

Is there anything I can do to stop this?

Thanks

Willing2Learn

Hi and welcome to the forum,

You could write to them, as a complaint, attaching evidence of health problems, hospital admissions and how you communicated with them during your illness/admission. Don't know if you will be successful though...

If you don't ask, you don't get.

T-G-C

If the default is being served in accordance with the law, where the consumer who signed the credit agreement, regulated under the Consumer Credit Act has failed to meet at-least 3 contractual payments, there is no legal requirement for them to withhold the default on the grounds of health.

That being said, some companies are willing to hold out serving a default for a period of 6 months in total, meaning missing 6 contractual payments.

When receiving the default, it should state the following:

‘Default notice served under section 87(1) Consumer Credit Act 1974’

You are given a deadline (at least 2 weeks) and instructions on how to rectify the situation. If you are able to clear the arrears this will stop your account defaulting. This means that a default notice is not a final and done deal, there is still a small window of opportunity to correct it.

Issuing a default notice is the first step creditors need to take if they want to refer your debt for collection. If the default notice is not resolved, the creditor has the right to terminate their credit agreement with you. In essence, this means demanding payment in full rather than the instalments originally missed. These can be passed to a collection agency to recover the amount owed.

If you need support and advice with this, I recommend contacting National Debtline or StepChange where professionals can provide the best information on what to do next with this.

Good luck in the coming months with your recovery and I hope all is resolved smoothly.