Debt-Free Wannabe Sticky - Provit & Statute Barred Letters, Defaults, Help and Guidance, All Here...

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edited 1 July at 12:24PM in Debt-free wannabe
Debt-Free Wannabe Sticky - Please read for links to important topics and help

Hi folks :)

This is the Debt-Free Wannabe Sticky where links to all current important tools and information will be posted.


(1) Is your debt statute barred ? template letters here :

(2) PROVIT LETTER CAN BE FOUND HERE. Initial response to a debt you do not recognize : Letter when you know nothing about about the debt - AKA "Prove it" letter

(3) Statement of affairs, an essential first step :

(4) Debt Advice Foundation Personal debt analyser

(5) Links to free debt help : IMPORTANT - Where to seek professional impartial advice about your debts.

(6) Ask a stepchange debt advisor a question :

(7) Debt free ? tell us : Debt-Free Roll of Honour

A word about defaults

Defaulting an account is a necessary part of the consumer credit act, when you fail to make your contracted repayments.
It basically freezes the debt, as it is, with no further charges or interest added, as the agreement between you has broken down, it has effectivly ended, but still leaves the balance of the debt to be repaid.
When should a default be added to a credit record ?

The Information Commissioner’s Office (ICO) says :

"As a general guide, (a default may be recorded) when you are 3 months in arrears, and normally by the time you are 6 months in arrears".

There are exceptions to this which may result in a default being recorded at a later stage, such as secured or long term loans e.g. mortgages, or if the product operates in a more flexible way e.g. current accounts, student loans, home credit.

Those are the main guidelines, but let’s look at specific situations.

Debt management plans and arrangements to pay

For situations where you miss a few payments, make reduced payments, or enter a Debt Management Plan, the “3-6 months” guidance above applies.

If your arrears have already reached three months, then the lender can register a default, even if an arrangement to pay is then agreed or you pay the debt in full.

Arrears will usually continue to mount up when you have an arrangement to pay or a DMP, so later a default can be added even if you are making all the payments.

At the start of a DMP or an arrangement to pay you may not want a default – they do harm your credit file after all !!

But if you aren’t going to repay the debt in a few years, having a default is usually better because your credit file will clear up sooner.

With no default date added, the record will stay until 6 years from the date the debt is finally settled which could be a long while.

So it can often be better to have a default early in a debt management plan rather than not have one.

Next stop...

When you've paid off your debts your next stop depends on where you are in your life's journey.

If you have a mortgage you may want to join our Mortgage-Free Wannabe board where the aim is to post on the Mortgage-free Roll of Honour. See our Mortgage Guides and all the MFW Important Discussions.

If you want to start saving check out our Savings Guides then ask your questions on the Savings board
I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- The "provit letter" is here-
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