Query Default process

Sly72

Have received letters advising that if I do not pay the full amount by said date the account will be made default. Have not paid so I have got letters from some now saying agreement has now ended / closed but nothing from others.

Can anyone advise what the exact process is do they have to send an end of agreement letter any FCA guidance?, one has not and has sent the letter before CCJ action which I have replied but have not heard a dam thing since and they are now sending arrears letters again.

RAS

Debt collectors letters are often controlled by a computer, without much/any human oversight. So one part of the organisation might be considering legal action whilst the computer is just churning out another letter because that what it's been programmed to do every fortnight.

Have you checked your credit record to see which debts are defaulted? The creditor needs to default the debt before taking legal action. But that doesn't mean they will.

What do you want to happen? If you are aiming at a self managed DMP, for example, Once the debt is defaulted, you might start paying what you can afford, or at least the appropriate part of the total you can afford towards debt, even if it's £1?

Sly72

RAS said:

Debt collectors letters are often controlled by a computer, without much/any human oversight. So one part of the organisation might be considering legal action whilst the computer is just churning out another letter because that what it's been programmed to do every fortnight.

Have you checked your credit record to see which debts are defaulted? The creditor needs to default the debt before taking legal action. But that doesn't mean they will.

What do you want to happen? If you are aiming at a self managed DMP, for example, Once the debt is defaulted, you might start paying what you can afford, or at least the appropriate part of the total you can afford towards debt, even if it's £1?

I have 9 debts 6 have have defaulted on credit file 3 waiting on CCA info so no further action, the other 3 defaults do I start by offering £1 as I have not had any contact since the default letter in March. Yes going self managed.

RAS

Just to clarify

6 debts have defaulted? 
Of these 3 have not sent response to CCA letters so are stalled?

Another 3 have not yet defaulted?

Work out what you can afford to pay towards debt. The debt charity process would pay the creditors pro rata, so if creditor A owns £1k out of your £20k debt and you can afford £100 per month, they get £5 per month.

As a self-manager, you can change that but I wouldn't be paying a lot more now and reduce later if others default and CCAs turn up. Stick the difference in your fighting fund. You may get offered full and finals in a couple of years.

sourcrates

Sly72 said:

Have received letters advising that if I do not pay the full amount by said date the account will be made default. Have not paid so I have got letters from some now saying agreement has now ended / closed but nothing from others.

Can anyone advise what the exact process is do they have to send an end of agreement letter any FCA guidance?, one has not and has sent the letter before CCJ action which I have replied but have not heard a dam thing since and they are now sending arrears letters again.

Section 87 Consumer Credit Act governs defaults, once payment arrears get to a certain point, the creditor will decide, enough is enough, lets end this agreement, and invoke section 87.

This triggers the sending of a default notice, a statutory requirement by a creditor, this will give you 14 days in which to remedy the breach to your terms and conditions, otherwise the agreement will end, and you will be in default of that agreement.

If you don`t respond to that letter, at some point afterwards, a default will be placed on your credit file, and a letter sent demanding payment of the outstanding balance, again, all statutory requirements.

The letter will list the further action a creditor "could" take against you to recover the balance, note the word "could", not "will".

In the vast majority of cases 99.9/100, the debt enters the collection process and will either be chased by a creditors internal collections team, or assigned to some external debt collection agency, it may even be sold on at this early stage to some debt purchasing company.

That is the process that plays out in almost every case, court action by original creditors is very rare these days, that happens almost exclusively much further down the line, and by debt purchasing companies whom you ignore for any length of time.

I would say making payment arrangements with your existing creditors is a little bit pointless, as they have neither the time nor the staff to manage bad debts on a long term basis, and you will find that most of them will either assign your accounts to debt collection agencies to manage on their behalf, or they will sell the debts on to 3rd parties, after quite a short while.

So to avoid doing everything twice, I would wait until the above happens, then start your self managed DMP, as there is nothing worse than spending time making payments arrangements, feeling proud of yourself, and full of beans, only to find a few days later half your accounts have been sold on, and you have to repeat the whole process over again.

Sly72

Hi just checked credit report shows defaults below yet Halifax has been sold to Cabot and Barclay to PRA should sold default debts still be showing and should they both have same default date, if so how do I get this corrected ?

Recent Defaults

HALIFAX

9th Feb 2023

CABOT FINANCIAL

9th Mar 2023

PRA GROUP

24th Feb 2023

BARCLAYCARD

24th Jan 2023

sourcrates

Occasionally the old entry will continue to show, for correct reporting, the old entry should show a zero balance, the new entry should show the outstanding balance, both should show the same date of default.

You can complain about the discrepancy, but as its only one calendar month, its hardly worth the effort.