Defaulted accounts query

oreo247

Hello


Just wondering if you could give me some advice please.


I had £3000 overdraft with Lloyds, and a £10000 loan also with Lloyds. The payments became too much to keep up, so I visited the bank to advise. They suggested that I close the account with the overdraft and open a new one. They also advised that the loan would be "closed" but I wouldn't be able to apply for any credit for 7 years. This was in October 2017.


A month or so later, I get letters from Westcot and Moorcroft Recovery to organise a payment plan. I'm paying off £25 a month for both of the debts as this is all I can currently afford.


After my step daughter leaves High School in 6 years my wife and I plan on looking to move houses. I'm worried that after the 7 years are up, the companies will slap a CCJ on me or put something on my credit score that will affect me getting a new mortgage. Has anyone else been in a similar situation as this? If so, what did you do to avoid the companies putting your credit account in another 7 years of waiting for credit?


I was thinking of gradually increasing my payments when I can in a few years, but even that will mean I'll have half the debt remaining. Other than that, should I just contact the companies nearer the time?


Thanks for the help, really appreciate it!

sourcrates

Have you checked your credit report ?


Most likely already been defaulted.


If your paying what you can afford, what benefit would legal action bring them ?
Oh, and ignore the score, its history that counts.

National_Debtline

Hi oreo247 and welcome to MSE,


You can only ever pay what you can afford to non priority debts, and it is important to up date your SOA regularly and consider all debt options; and if monthly repayments are the best potential solution. You should also ensure that you no longer bank with the Lloyds group otherwise the money in your account is at risk (through the banks right of set off, if the debt collectors pass it back to Lloyds).


When it comes to monthly negotiations the one point to clarify from your message is that the lender can take court action at any stage once the debt has default. They may never do this, or they may do it before 7 years. I think this '7 year comment' made by the bank has caused confusion and is being given too much attention in this situation. Going forward I would advise you to ignore it. Regardless of which, your credit file is a 6 year rolling document.

The key issue is that you should pay what is manageable and fair according to your SOA. Send the payments each month whether they have been accepted or not, and remember they can enforce with debt collectors or the county court. Debt collectors are not bailiffs, so have no right of entry/ repossession and before the matter goes to court you should get a 'letter of claim' giving you 30 days notice to try and make an arrangement to prevent court action. It an arrangement cannot be made they can issue court papers and (if there is no dispute) the debt will then show for 6 years from the date of judgement. And, it is true that defaults and CCJ's can affect your ability to get credit whilst they appear on your file.


Laura
@natdebtline