Scottish Trust Deed - creditor refusing to default

ryan92

Just looking for a bit of advice on this one.
The majority of my creditors have began to default my accounts to the date of my Trust Deed being signed bar one (Tymit Credit Card). They are not willing to default my account on the following basis ;

"Due to the current status of your insolvency, we are unable to issue default proceedings against you as you are protected by the trust deed in regard to collection activities. 

We will continue to report the current performance of your account to the credit reference agency as we are duty-bound to do so. 
When the Trust deed has been completed we will write off the remaining balance and inform the credit reference agency accordingly. 
 
Defaults can last on your credit report for a period of Six years which will most likely surpass the Trust deed therefore to assist you in your financial recovery even if we could default your account it would not be beneficial for you."

Is this the correct advice? As far as I am aware defaulting the account isn't collection activity but instead they are continuing to mark my credit file with "in arrears by xx months" that obviously increases every month. Am I right in thinking that with this being reported in this way, this will still show after the 6 years of signing my Trust Deed has elapsed?

Thanks in advance  

sourcrates

At the moment it`s not affecting you at all, due to your insolvency.

Once the trust deed ends, you should do the standard credit file clean up, but as you have just one non complying creditor, you may want to do some of the groundwork now.

Check with the FOS on what constitutes collection activity, I suspect defaulting your account does not meet that criteria, and your account should be shown as in default, but that is just my layman's opinion.

Dependant on what they say, you may want to raise a complaint with the creditor, or indeed wait until the end of the arrangement to do so.

fatbelly

The guidance appears to have been written from an England/Wales perspective but may be useful

Apart from being 3 or more months in arrears there are other circumstances which may lead to the recording of a default: 1. Property such as a house or vehicle has been repossessed or handed back with no indication to pay a remaining balance. 2. The provider takes steps to cut off a service. 3. The account is in arrears and the provider receives an indication that you have left your address without notifying them. 4. Evidence of fraud. 5. The account is or has been included in a bankruptcy, CCJ, Individual Voluntary Arrangement (IVA) or similar.

ryan92

Just wanted to update you on the response to my query about my default now I am in a Trust Deed. I appreciate it won't affect me right now but ideally I want my credit file to be tidy so that everything falls off the report at the same time.

*** 

Hi Ryan,
 
Thank you for your email and request.
 
After reviewing your account, I can see your account fell overdue originally on 13/06/2022, to which collections activities continued as normal. We then sent a Notice of Default on 13/09/2022 as your account was still overdue. At the time of the notice being sent, you would have had 14 days from this date which would have given you until 27/09/2022 to put an agreement in place.
 
Due to some technical issues that month, the default date was extended slightly. We then received an email from yourself confirming you were working with Step Change to set up a debt management plan. From this email we received on 30/09/2022, we set a 45 day hold in place which is a formal agreement and prevented the default taking place on your account.
 
We then had confirmation of this agreement on 17/10/2022 and all collections activities we halted as you were in a debt management plan.
 
As you have advised yourself, we then received documentation regarding your trust deed in January. This again would prevent any collections activities from happening on your account. As my colleague previously explained, we are unable to issue default proceedings against you as you are protected by the trust deed in regard to collection activities.
 
I can confirm all actions taken have been correct and due to this, unfortunately, we are not able to honour your request. We are legally required to report accurately in regards to the performance and status of an account to credit reference agencies.
 
I understand this may not have been the response you were hoping for, please accept my apologies for this. If you're unhappy with this information, I can raise a complaint on your behalf for this to be reviewed by our complaints team.

***

So really, from what they are saying, the account should have been defaulted in September 2022 but a technical issue prevented it from happening. This has meant my account is showing 8+ months in arrears with the months increasing with every month that passes.

Is what they are advising the correct information?