Struggling with debt? Ask a stepchange debt adviser a question

Penguin_

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Abbafan1972

StepChange_Allen said:

Abbafan1972 said:

Hi there,

We have sent off all of our activation papers by email on 01/03 and I have 2 questions:-

• How long does it take for your account to get set up?  I have only received an automated email.
• I have included our bank overdraft in our debts to be paid by them - how does this get managed?  I don't want to be left with no money in the account as our car finance and mortgage comes out of that account.  (I have used a different account for our step change DD).

Thanks in advance. 

Hi there

Thanks for your post.

As long as you returned all the required paperwork together, I'd say it's likely your plan should be able to start on April 1st, but I don't work on the team that sets up plans so I can't be certain.

As your overdraft debt is included, you need to stop all transactions in and out of this account as quickly as possible; the account won't remain open on the DMP. The good news is that you already have another account, so hopefully you can get your income paid in there this month, and move all your household bills there for the next payments.

If you have any further questions around getting your plan underway, I'd recommend calling our Plan Activations team, as they're the people setting things up for you.

I hope this helps.

Allen

Hi there,

I will definitely speak to Activations and make sure everything is set up (do they work on a Saturday?). 

With regards to the overdraft, I have been getting conflicting information:- Halifax Bank have said they won't normally close the account, only under extreme circumstances and the balance goes down and they gradually reduce it.  When I have spoken to someone at Step change on the phone before sending off the information, I was told that the overdraft would be separated from the account, so it can be paid off.  So am unsure of the answer. 

After speaking to Step change, I may need to speak to the Halifax. 

Abbafan1972

Following on from my post, after discussing it with OH, we have decided to move everything to the other account.  That one is just in my name, so I will get his name added, as his wages will be going in there too, plus a lot of the DD's are in his name.  Plus to give the bank a heads up that they will be getting a lot of DD requests coming through.  

No matter what the Halifax do, I think it is better to keep the overdraft account separate, so that we can see how much is owed, rather than having transactions going in and out of it. 

StepChange_Patience

Penguin_ said:

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Hi there.

Thanks for getting in touch.

Usually a credit agreement will explain when an account will default, but generally it's after three to six months of arrears for most debt types. The notice of default doesn’t affect your credit file, but when the account defaults this will be recorded.

This should show on your credit file for 6 years from when the account defaulted, the creditor can only do this once for the same debt. If you've made any recent payments, this may explain the update on your file.

I hope this helps.

Patience

Penguin_

StepChange_Patience said:

Penguin_ said:

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Hi there.

Thanks for getting in touch.

Usually a credit agreement will explain when an account will default, but generally it's after three to six months of arrears for most debt types. The notice of default doesn’t affect your credit file, but when the account defaults this will be recorded.

This should show on your credit file for 6 years from when the account defaulted, the creditor can only do this once for the same debt. If you've made any recent payments, this may explain the update on your file.

I hope this helps.

Patience

Thanks so does that mean it will drop off after 6 years of the notice or is the 6 years re-started every month when payments are made?

StepChange_Patience

Abbafan1972 said:

Following on from my post, after discussing it with OH, we have decided to move everything to the other account.  That one is just in my name, so I will get his name added, as his wages will be going in there too, plus a lot of the DD's are in his name.  Plus to give the bank a heads up that they will be getting a lot of DD requests coming through.  

No matter what the Halifax do, I think it is better to keep the overdraft account separate, so that we can see how much is owed, rather than having transactions going in and out of it. 

Hi there

Thanks for getting back in touch.

If Halifax aren't able to separate the overdraft for you to treat it as a separate debt, as you said it'll be worthwhile using a different account from this point onwards and then we'll support you with the overdraft.

Our Plan Activations team are open Monday to Friday 8am to 6pm.

I hope this helps.

Patience

StepChange_Patience

Penguin_ said:

StepChange_Patience said:

Penguin_ said:

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Hi there.

Thanks for getting in touch.

Usually a credit agreement will explain when an account will default, but generally it's after three to six months of arrears for most debt types. The notice of default doesn’t affect your credit file, but when the account defaults this will be recorded.

This should show on your credit file for 6 years from when the account defaulted, the creditor can only do this once for the same debt. If you've made any recent payments, this may explain the update on your file.

I hope this helps.

Patience

Thanks so does that mean it will drop off after 6 years of the notice or is the 6 years re-started every month when payments are made?

Hi there

Thanks for getting back in touch.

Information about missed payments, defaults or court judgments will stay on your credit file for six years. These details 'drop off' from your credit file after six years, even if the debt itself is still unpaid.

I hope this helps.

Patience

Penguin_

StepChange_Patience said:

Penguin_ said:

StepChange_Patience said:

Penguin_ said:

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Hi there.

Thanks for getting in touch.

Usually a credit agreement will explain when an account will default, but generally it's after three to six months of arrears for most debt types. The notice of default doesn’t affect your credit file, but when the account defaults this will be recorded.

This should show on your credit file for 6 years from when the account defaulted, the creditor can only do this once for the same debt. If you've made any recent payments, this may explain the update on your file.

I hope this helps.

Patience

Thanks so does that mean it will drop off after 6 years of the notice or is the 6 years re-started every month when payments are made?

Hi there

Thanks for getting back in touch.

Information about missed payments, defaults or court judgments will stay on your credit file for six years. These details 'drop off' from your credit file after six years, even if the debt itself is still unpaid.

I hope this helps.

Patience

Thanks, you haven't really answered my query.

I have a default from Dec 2014 on my credit file, the debt of which I am paying monthly through a DMP, however it says "updated on Feb 2021" which is the monthly amount going to them. Will this default stay on until 6 years after I have completed the DMP?

Abbafan1972

I am slightly annoyed - spoke to someone in activations last night before they closed and he was very helpful.  I called to check on the progress of the setting up of my plan.  My email with all of my paperwork attached had been sitting in the "activate" inbox since the 1st March and nothing done with it.  

Person I spoke to said he would process it first thing tomorrow and I should hear something soon.  It was a good job I called. 

StepChange_Patience

Penguin_ said:

StepChange_Patience said:

Penguin_ said:

StepChange_Patience said:

Penguin_ said:

Quick question regarding defaults. When do they drop off your credit file? I know it's 6 years but is it 6 years from issue? I have one on my account that was opened in April 2016 but looking at my file it says updated Feb 2021 which I assume is the payment from my DMP.

Hi there.

Thanks for getting in touch.

Usually a credit agreement will explain when an account will default, but generally it's after three to six months of arrears for most debt types. The notice of default doesn’t affect your credit file, but when the account defaults this will be recorded.

This should show on your credit file for 6 years from when the account defaulted, the creditor can only do this once for the same debt. If you've made any recent payments, this may explain the update on your file.

I hope this helps.

Patience

Thanks so does that mean it will drop off after 6 years of the notice or is the 6 years re-started every month when payments are made?

Hi there

Thanks for getting back in touch.

Information about missed payments, defaults or court judgments will stay on your credit file for six years. These details 'drop off' from your credit file after six years, even if the debt itself is still unpaid.

I hope this helps.

Patience

Thanks, you haven't really answered my query.

I have a default from Dec 2014 on my credit file, the debt of which I am paying monthly through a DMP, however it says "updated on Feb 2021" which is the monthly amount going to them. Will this default stay on until 6 years after I have completed the DMP?

Hi there

Thanks for getting back to us, I'm sorry that you feel your question wasn't answered and can only apologise for this.

The record of a debt should be removed entirely six years after it's defaulted. The payment from the DMP won't change this timeframe or restart the six years.

If you've made a recent payment to the debt, this will show on your credit file, as it's just an accurate record of your credit history.

I hope this is a little clearer. 

Patience