Loan in Default - What happens in year 6?

T0502

Hello, 

I’m hoping for some input from others who have been in a similar situation...

After being on an informal debt managment plan for 12 months, I defaulted on a large loan in January 2020. In Feb 2020, it was sold out to a debt collection agency (‘Interum’). I’ve since been paying them an agreed amount each month. They dont ask for more, they don’t assess my finances, its all very relaxed with them. I offer an amount, they accept it & they say we’ll review in 12 months (yet to happen). 

The trouble is I’m aware the default will be on my file for 6 years (so until Jan 2026). I’m paying the most I can at the moment (I have increased it a couple of times over the past year when I’ve been able to, & plan on giving as much as I can for the next 5 years), but its extremely unlikely to be anywhere near zero by then. I’ve asked them what would happen & they’ve said nothing - the default comes off my file & I continue to pay them like I’m doing now, until it’s settled.

Is this correct? It seems too good to be true. I own a house with my husband (currently 6 years into a 35 year mortgage)....could they go after the house? Could they register a CCJ against me? From what I’ve read they can, but I suppose what I’m asking is has this happened to others in the same situation?

What really happens in year 6 when the debt isn’t settled? Does it make any difference how close to being settled it is? 

Any insight would be helpful - trying to avoid any surprises years down the line!

Thankyou

[Deleted User]

They could do all those things, but while you're still paying them, it's vanishingly unlikely.

sourcrates

Nothing happens, the entry drops off your file, but the debt is still owed.