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An account included in an expired debt relief order is still showing as open

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timetosortthings
timetosortthings Posts: 34 Forumite
Eighth Anniversary 10 Posts
edited 22 November 2020 at 12:15PM in Debt-free wannabe

Hi

This question is on behalf of my daughter who has no other debts (apart from a student loan)

Who wonders if anyone can offer information regarding what should happen with debts contained within a debt relief order when it expires after its 12-month period and the financial situation didn’t/hasn’t changed for the better it’s got worse this year as it has for many.

Rightly or wrongly at the start of 2019, a debt charity advised that a debt relief order be done for 3 bank-related debts (2 overdrafts £3,000 & £1,400 plus £50 on a credit card)

The advice was followed in February 2019, which as a result all attempts to recover the debt(s) subsequently stopped.

Fast forward 12-months, and the 12-month debt relief period expired in February 2020 and nothing since February 2019 to this day has been heard regarding the debts contained within the debt relief order.

But now when looking at the credit file it shows that the accounts for the £3,000 overdraft and £50 credit card have now CLOSED as a result, but the £1,400 overdraft account is still showing as OPEN.

The thought was that all accounts would close. So is it right that the £1,400 overdraft account should still be showing as open some 9 months after the expiry period of the debt relief order? (with no financial improvement or contact)

The bank in question is Lloyds, but we’re wondering if somehow in having an active Halifax account which is only used as a tenancy account (which my daughter and 2 fellow tenants have to pay their rent into, so one payment can then be made to the landlord) is affecting the closing of the Lloyds account.

Should the Lloyds account now be closed?

If so, should contact be made with them to close it?

Any help or advice is appreciated   


Comments

  • sourcrates
    sourcrates Posts: 31,601 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 22 November 2020 at 2:20PM
    Hi,
    Any debt included in a DRO, once completed, should be marked by the creditors “to show that you no longer owe money on that account (perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way)”  (quote from the Information Commissioner’s Office) and the balance on the accounts should show as zero.
    DRO debts should go at the same time as the DRO marker, (6 years) because their default date should be on or before the date your DRO started.
    So as long as the entry drops off her file on or before, the 6th anniversary of the DRO, it makes no difference if its marked as open or closed, and all is well.


    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 forumteam@moneysavingexpert.com. 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- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Hi Sourcrates

    Just a quick thank you for your assistance
  • Leonard1811
    Leonard1811 Posts: 5 Forumite
    Tenth Anniversary First Post Combo Breaker
    Is anyone else feeling exhausted constantly chasing credit reference agencies who hold incorrect information, and different information between them. 
    In 2019 my daughter escaped a financially abusive relationship with some debt. She took advice and applied for a DRO, the moratorium period ended June 2021.
    Every month since that time we have been keeping an eye on her credit file. She is wanting to move forward and life is very different for her now.
    O2 in particular have an open defaulted account which was in her DRO. When addressing this with them they suddenly can't find the account, her name etc etc. They continue reporting the account as in default but say we need to give them something other than an account number, their letters etc to find the account. We have nothing left to offer! They insist on email and never respond and won't speak on the phone.
    It took 4 years and financial compensation to sort out Audi, which was a dreadful battle when they involved solicitors even when the DRO was over a year old.
    I understand what we need to do etc, but we have been navigating these companies since 2019 and we are now finding it really distressing.
    Any advice as to hiw we then rebuild her credit when it doesnt seem to have changed since DRO and accounts being discharged or falling away from her file with age? We were hoping she would see some increase in her credit scores as we approach the final 18 months of the six years since default or DRO

  • sourcrates
    sourcrates Posts: 31,601 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    An old thread you have re-opened, but nevertheless.

    The credit scores are meaningless, defaults stay on file for 6 years regardless of the debt solution used.

    A DRO is a form of insolvency, so lenders will not lend whilst that marker still shows, once the 6 years are up, her credit file will start to recover.
    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 forumteam@moneysavingexpert.com. 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- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
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