Halifax Credit Card Cleared - questions

Darudef1

Hi all.
My first post here. Please be kind 
A bit of a back story first. Over the last two years I have struggled with debts. I've never missed a payment whether that means my mortgage or credit card repayments. But it has meant that I have been living in my overdraft for a long long time and towards the end of last year and the start of this year I eventually hitting the limit of my overdraft and started incurring charges as a result. This meant I could not pay more than the minimum payments on my credit card debts and I really didn't have a plan on clearing them faster. I was conscious of my debt but to be honest did the complete wrong thing and pretend it wasn't there; I made sure I played my bills on time but paid no more attention to them than that. 

Knowing that I had debt issues that were being managed by only paying the minimum each month, I became afraid of opening any mail from my lenders. I knew I had paid my bills on time but I grew an irrational fear of opening the letters. Like I said, I pretended they wernt there. Sometimes I would open the letters just incase I had missed a payment and money was being demanded. If it wasnt then I wouldnt read the letter otherwise.

Fast forward to this year and my other half has moved in and is helping me sort my debt out. She is far better with money than I ever have been and has inspired me to sort my debts out rather than spending my money on countless needless things. I cancelled some subscriptions such as sky sports and spotify and more recently gotten a 0% interest and free balance transfers credit card to help pay money off. I'm also getting money from my girlfriend to support the home so it means I have more money than ever before and intend to sort my debts out with it.

Today, whilst sorting out some balance transfers, I noticed my Halifax credit card I was looking to transfer had been cleared. I then found a letter than I had not thrown but done my old habit of skimming over it to see if money was being demanded and just thrown it to the side. It said that they were clearing the balance of the card and stopping any payments in or out from it. They were also closing the account and as  result I would not be able to use it or the card any longer. They went on to explain that it would go to CRA's as paid. 

My card with them had a limit of £3750 and my balance was £3500ish. I just can't believe they have cleared the outstanding balance because I have been in persistent debt with them for roughly 2/3 years since I started using the card, only paying the minimum a month. Does anyone know what this all means? I have a friend who works for HSBC and she thinks it may go down as a default which I know stays on my credit score for 6 years. But is this the case? 

I have tried to ring Halifax to find out more but with the Coronavirus crisis ongoing I cannot get through to them. It did say on the letter that my "account will show at Credit reference agencies (CRA's) as paid." Does this mean that Halifax paid it or that I paid it? Is this a default as I thought that you'd have to go to court for that for reasons such as missed payment etc.

To close, I know I've been stupid with my debts and money in general, but I am sorting it out now and I had a plan in place to clear my debts off by the end of 2022 (except mortgage of course) and it's a shame for me that if this is a default then its come at a time where I was just a month away from significantly increasing my repayments.

Thanks and sorry for the log read!

Darudef1

Sorry for some predictive text errors as I am on my phone 

[Deleted User]

It means they gave written off the debt, probably from a TCF perspective.

It doesn't sound as if it defaulted, but you can check that for yourself on your files.

Darudef1

Hiya. What's a TCF? 

Thanks

Darudef1

Treating customers fairly? If so then happy days.

sasha20

If you have been keeping up with repayments (at least the minimum) and not missed any on that card and they then wrote the debt off due to Persistent Debt, they can't put it down as a default or charge off.

Persistent Debt is a relatively new regulation that forces banks and credit companies to not excessively charge people over time. The actual regs are pretty long, but the sum is that over a long period of time, customers should not pay more in interest and fees than they do in repaying principal balance.

If you've only been making minimum payments, the likelihood is that you may have fallen into that category and they didn't know what to do about it (they really should have stopped charging you fees to fix it) and decided to write it off. I haven't heard of this happening before, but if it did, it sounds like your lucky day.

If you can't get through to them - get a free credit report from the main bureaus and check what the next month's update is on that account - that way you'll know for sure without having to wait for hours on the phone line and you'll only need to ring them if it doesn't come through as fully paid up and closed.