DMP threatening email from 118 118.

TommyTBFC

Hi all, basically I entered into a DMP with StepChange last December I had several debts 118 118 being one of them.

At first I had the usual letters of default that get sent by law and these stopped after a few months. I’m successfully paying off my DMP monthly without missing any payments. Today I received a letter saying I had to pay my remaining balance of £1456 off by the 24th of this month or face court action. I’m a little worried, I’m going to phone them on Monday to sort but what are the chances that it’s just another letter that needs to be sent by law?

Willing2Learn

The only letter that you would have to worry about would be a Pre Action Protocol letter. I believe this would have to be sent by Royal Mail (not email). I believe they are most likely attempting to freak you out. After all, why would they seek a CCJ if you are making your regular payments in accordance with your DMP?

A Pre Action Protocol letter and attachments look like the sample guidance in the link below:
https://debtcamel.co.uk/letter-before-claim-ccj/

If it is nothing like the sample in the guidance, then I would not bother making any phone calls. In fact, you should never 'phone you creditors. All communication should be in writing only, by Royal Mail.

TommyTBFC

Hi,

Thanks for your reply. It doesn’t sound like what you have mentioned. It basically says “this is a default notice under section 87(1) of the consumer credit act”

You have breached loan agreement clause 2.1.
Nature of breach
Action required to remedy breach.

If no action is taken serve notice in writing upon to terminate loan agreement.
Demand earlier payment in full amount!

Any ideas?

Willing2Learn

Okay then. That is a Default Notice under section 87(1) Consumer Credit Act 1974. That is perfectly normal and is nothing to worry about. It means that your relationship between yourself and your creditor has broken down. It is your opportunity to 'salvage' your agreement by paying the amount due within 14 days. Assuming you cannot pay the amount due, as you are on a DMP, then just let the notice expire and the credit agreement will be broken. A default will be recorded on your credit file and at that point interest and charges will stop. A default is good news. It also means the toxic account will be removed from your credit file nice and early. My advice is to simply continue with your arranged DMP payments as normal, and everything will be fine.

TommyTBFC

Hi

Willing2Learn, thanks for your advice and kind words. I’d assumed this was normal however any letter like that takes you back! I’m currently in a better place than I was and starting to save money and this knocked me for six when I got home from work today!!

snilloct1957

Hi
Can you go back to Stepchange and get some further help/advice?

They are there to support you in making positive changes to your life, and it doesn't help that one of your creditors has decided to play hardball.







Hi Tommy, good move, put this creditor at the bottom of the list.

TommyTBFC

Hi Snilloct, that’s my next step on Monday morning. I couldn’t today due to finishing work late

Suseka97

Just to clarify things here - they are not 'playing hardball' as such - although I appreciate why letters like this can be unsettling. They are required by law to warn a debtor of the actions of failing to make their contractual payment. As has been said by W2L, the default notification is a good thing for people in DMPs as it starts the 6 year countdown. Unfortunately not all creditors will default and that has a negative impact on peoples credit files for much much longer.

Hopefully all your creditors will default and you need to be pushing those that don't.