Credit Card Debt seems to have never defaulted

timetosortthings

I make this post to try and seek clarification on a situation with a 4k credit card debt.

Having been in a mess with debt for a number of years, I have of late felt like headway is being made and the debt situation has been reducing and nowhere need as bad as it was previously.

The many defaults on my credit file have now since expired, except one which has about 18 months left.

I have of late been checking my credit file to ensure I am actually making headway and not just thinking or assuming I was.

The clarification I seek is in doing this exercise I note that I have a 4k credit card debt which since mid-2016 I have been making monthly £1 token payments. Never really having any real regular communication with the credit card company during this time, other than having updated phone conversations every 12 months instructing me to continue paying the £1 every month.

Then, all of a sudden last year the debt was sold on, and with the new company who purchased the debt putting the same agreement put in place to this day (i.e. £1 per month)

Now, having checked my credit file lately via Experian, Clearscore and Credit Karma I can see the 4k credit card debt was on my credit file whilst it was with the credit card company – then at the exact time the debt was sold on, this debt drops off my credit file and is now nowhere to be seen.

As a result of this happening my credit score improved significantly and has remained the same now for the past 8-9 months.

The point I wish to clarify is that nowhere can I find that this 4k credit card debt ever defaulted (although I thought or assumed it had) and my concern now is that it never has. Could this be correct? Especially if I have only ever been paying £1 a month since 2016?

If correct, and it has never defaulted (which I now believe to be so), can it legally default in the future, with the six-year period starting from that point? Or, if and when it defaults, should or could it be backdated to 2016, so as to make the default marker less impactive?  

I am appreciative of any assistance.

Fatsdom

Definitely a new one to me, but I'm confident Sourcrats will be along soon, he is an expert in this field. In the meantime if you need help with your debts why not post an SOA? 

sourcrates

Hi,

When did you first stop making regular contracted payments to this account ?

Would the time the debt dropped off your file coincide roughly with 6 years after you first got into financial trouble ?

You could SAR the credit card company, that would get you all the information they hold on you, if the account defaulted, there would be a record of it, its common now for non defaulted debts to be sold as a going concern, now if the debts new owner has not been applying interest to the account, as per the original agreement, then that tells me it may have defaulted, otherwise why did they not apply interest to it ?

With a bit of detective work, you should be able to confirm one way or the other, should it be the case that no default was registered, and the new owner then decided to register one, you can argue it be backdated to 2016 yes, and the ICO has final say in the matter.

timetosortthings

sourcrates said:

Hi,

When did you first stop making regular contracted payments to this account ?

Would the time the debt dropped off your file coincide roughly with 6 years after you first got into financial trouble ?

On checking, I first incurred payment troubles with this debt back in late 2013, and which the credit card company was aware of as they were constantly chasing on a weekly/monthly basis due to overdue/missed payments

In 2014, payment struggles continued and as they put it at the time - the credit card company said: “they wanted help and work with me”. The outcome of this help was several agreements being set up over about 18 months whereby by if I pay an agreed monthly amount for a 3 or 6-month term i.e. £150 per month they would credit my account with a fixed amount or percentage of that payment!

Starting with paying £150 they would credit £150 (one-off payment) once the first payment had been received, and then the account would be reviewed every 3 or 6 months after which another agreement would be set up but with reducing help. However, things were effectively getting worse because interest and charges were still being applied.    

During this period although the agreements were short agreements, a number of them were constantly broken due to my inability to pay the required amount or by the required time, but after phone conversations, new agreements would just be set back up.    

With things no better my account was passed to the financial difficulties department in August 2015 and this resulted in a 9-month agreement being put into place for lower payments than offered previously plus lower interest rates on the account for a while. 

Throughout this 9-month plan, it was broken several times due to my inability to make payment agreed then in getting to June 2016 it was finally felt, or should I say they finally acknowledged/realised that I couldn’t sustain the payments I was making against the account. 

So from this point onwards (June 2016) plan agreements for £1 monthly token payments were put in place, with all interest and charges being stopped from this point (I have found a written note which I made at this time saying the account was not in default, but the temporary payment agreement was)   

The months passed, and whilst dealing directly with the credit card company, the £1 monthly token payment then stayed in place from June 2016 to August 2019. 

When at which point (August 2019) the debt was sold on and disappears from my credit report, I was at this point requested by letter to speak with the new owner regarding the debt after which they agreed for the same agreement to be put in place i.e. no interest or charges to be applied to the account and a £1 monthly token payment to be made with regular future updates. 

Whilst since making the regular £1 monthly payments I have not spoken or communicated with the new owner since September 2019. 

I will make a SAR request of the credit card company, but now I am almost sure this debt hasn’t as yet defaulted. 

So if this is indeed the case and the new debt owner decides to register a default in the future (as the ability for me to pay anymore than a £1 is no better, and by asking the credit card company for the SAR could it trigger anything) is there a template or legal reference terms to be used if having to write to the ICO to argue that default should have been added sooner? 

Also, with the details, I supplied above at what point in time should I use for any default to be attributed to? I.e. when I started my £1 token payments, in June 2016? Or when repeated short-term payment plans where put into place starting in 2014?   

As always, appreciative of any assistance

sourcrates

Thanks for the in-depth reply, it really helps to have as much info as possible.

I don`t think this will default now, they appear to be happy with the arrangement, there is no benefit in defaulting this account now.

timetosortthings

sourcrates said:

Thanks for the in-depth reply, it really helps to have as much info as possible.

I don`t think this will default now, they appear to be happy with the arrangement, there is no benefit in defaulting this account now.

Thanks for your response.

With the information I’ve provided I acknowledge your view being that the account may not default.

But, to be better prepared if it should ever default at some stage, can I just check:

If I needed to appeal the date/time of the default would that date/time be when the account first went into trouble and the many short term payment plans were put in place (circa 2014)

Or

From when the £1 monthly token payments agreement was to put in place (circa 2016)

Also,

Not that I think I’d be in a position anytime soon, but if in the future the debt owner accesses the feasibility of my account, deciding to sell it on, or offer me a full and final settlement.

If in the case of a full and final, does an account have to default before such an offer can be made? Or can a full and final be offered but the account would default as a result of an acceptance of a full and final settlement?   

As always, appreciative of any assistance

sourcrates

I realise you are trying to go through various senarios in your head with this, so you could argue that 2014 would be the date the default should have been entered, and settlements can be offered at any time regardless of the situation.

timetosortthings

I have a further question regarding an ongoing credit card debt for which I created this post back in 2020.

At the time it was best to leave things as they were and keep paying a monthly £1 token payment

THE SITUATION 

• I have proof of paying a monthly £1 token payment since June 2016, so done on receipt of a NOTICE OF DEFAULT asking me to pay £400 by a certain date which I didn’t and couldn’t do.
• The debt was then bought by Arrow Global in 2019 and I was told to keep paying a £1 token payment which I’ve done to this day.
• Due to the current cost of living crises and progressive Parkinson’s condition I continually explore my current situation and circumstances. As a result today I phoned Arrow Global handling company to ask if they’d consider writing off the debt on medical grounds. 
• They advised that apart from several things I’d need to get letters and forms filled in by my doctors/consultants to explain how the condition currently affects me.
• This I was prepared to do until they asked if the property I lived in was mortgaged or not, when I said it was they advised that Arrow Global wouldn’t consider any write-off regardless of how I am or will be affected.
• As part of the conversation, it was established that I’m no longer in the position to be paying the monthly £1 token payment and my income and expenditure have a deficit of £471.51 (when taking into account all expected monthly payments). 
• They said was fine as they could put the account on hold for 3 months. On talking things through it appears that after 4-months of no payments they’d default the account.
• In my mind, the account should have defaulted back in 2016 but I’m told a NOTICE OF DEFAULT issued by the credit card provider is not the same as a default. 
• Arrow Global bought the debt as non-defaulted and in their mind, the account has never defaulted with them even though all I was saying was a £1 as all they were expecting me to pay monthly was the £1 per month.

QUESTION

Along with the current situation and that my mortgage term ends in 7 years, after which I don’t know what my options will/could be open to me. But it might be likely that I’d need to look to remortgage somehow or downsize with a smaller mortgage, or equity release etc. If in the position to do this at this point I do not wish to have anything negative on my file.

So currently I’m not sure whilst having the time for any nastiness to clear my credit file whether I should: 

• Raise with the original credit card lender why a default wasn’t placed on my credit file back in 2016
• Stop paying £1 token payments so the account defaults 4-months from now, then is off the file in 6-years
• Look to challenge why a write under medical grounds wouldn’t be considered.

Paying the £1 isn't the end of the world, but I'm mindful of things going wrong and ongoing/future negative impacts.


Thanks in advance 

PS I know looking for a full and final could be an option - but no matter what any such amount might be I wouldn’t be able to afford it

runforlife

Hi, I’ve only skimmed through your posts, sorry, but want to say I successfully challenged default dates with my creditors which they brought forward. Happy to send you a copy of letters if you would like?