Seeking advice for my disastrous debt

DisabledDan

DebtFreeWannabe27 said:

I've just received a text from a borrow to say my loan has been defaulted and I should set up a payment plan. Only missed payments are coming through on my credit report at the moment. Is this another ignore and carry on moment? I probably want the loan debt to be sold on before I consider making token payments. Always appreciate your advice @sourcrates

There is a difference between defaulting on a payment and the debt as a whole being defaulted.

I would say ignore everything except a letter before action and the formal default letter you will get via Royal Mail.

sourcrates

Yes agree, they must send a default notice in the post, until then, don`t believe anything.

Keep an eye on your credit reports, defaults will show on there.

DebtFreeWannabe27

sourcrates said:

Yes agree, they must send a default notice in the post, until then, don`t believe anything.

Keep an eye on your credit reports, defaults will show on there.

I've received a default notice in the post for this lender, and just last week, received a formal demand for payment - it's starting to feel a little scary now. In the most recent letter, the lender has asked that I contact their recoveries team to discuss repayment, but there is only a phone number. I obviously don't want to get on the phone with them. Is this a case of sitting on my hands until they look at selling the debt on? I'm most nervous about the possibility of a CCJ so is there anything I should be looking out for that usually precedes this? TIA

Grumpelstiltskin

If they are thinking about going for a CCJ they have to send you a letter before action by snail mail.

If by chance you do get one come back for advice otherwise ignore them.

RAS

Does the "formal demand for payment" require you to repay the entire debt? 

If so, all good and well. Before issuing the default they have to given you 14 days to repay the full sum. Although even the letter terminating the relationship and advising of the default doesn't mean that they will actually get round to reporting the default on your credit record immediately. 

But once you get that letter watch out for assignment to a debt collector, sale to another company or a letter before action. Come back when that happens, if possible scan that letter, redacting the personal details

DebtFreeWannabe27

RAS said:

Does the "formal demand for payment" require you to repay the entire debt? 

If so, all good and well. Before issuing the default they have to given you 14 days to repay the full sum. Although even the letter terminating the relationship and advising of the default doesn't mean that they will actually get round to reporting the default on your credit record immediately. 

But once you get that letter watch out for assignment to a debt collector, sale to another company or a letter before action. Come back when that happens, if possible scan that letter, redacting the personal details

Yeah, it's a formal demand for the full amount. Thanks for the advice, I'll keep an eye on the letters 

sourcrates

DebtFreeWannabe27 said:

sourcrates said:

Yes agree, they must send a default notice in the post, until then, don`t believe anything.

Keep an eye on your credit reports, defaults will show on there.

I've received a default notice in the post for this lender, and just last week, received a formal demand for payment - it's starting to feel a little scary now. In the most recent letter, the lender has asked that I contact their recoveries team to discuss repayment, but there is only a phone number. I obviously don't want to get on the phone with them. Is this a case of sitting on my hands until they look at selling the debt on? I'm most nervous about the possibility of a CCJ so is there anything I should be looking out for that usually precedes this? TIA

A formal demand is nothing, its no worse than me saying to you, "I formally demand you pay me this money" it has no basis or meaning in law whatsoever, just another letter designed to rattle your cage, nothing more.

The only letter you must take note of is a letter before action, this has been said many times over and over again, as its a prelude to legal action and gives you 30 days to come to an arrangement with your lender to avoid it going further.

So just like the song by Metallica, Nothing else matters.

No matter what content the letter may have, unless its an LBA, or a letter stating your debt has been assigned or sold, ignore it, they mean nothing.

DebtFreeWannabe27

sourcrates said:

DebtFreeWannabe27 said:

sourcrates said:

Yes agree, they must send a default notice in the post, until then, don`t believe anything.

Keep an eye on your credit reports, defaults will show on there.

I've received a default notice in the post for this lender, and just last week, received a formal demand for payment - it's starting to feel a little scary now. In the most recent letter, the lender has asked that I contact their recoveries team to discuss repayment, but there is only a phone number. I obviously don't want to get on the phone with them. Is this a case of sitting on my hands until they look at selling the debt on? I'm most nervous about the possibility of a CCJ so is there anything I should be looking out for that usually precedes this? TIA

A formal demand is nothing, its no worse than me saying to you, "I formally demand you pay me this money" it has no basis or meaning in law whatsoever, just another letter designed to rattle your cage, nothing more.

The only letter you must take note of is a letter before action, this has been said many times over and over again, as its a prelude to legal action and gives you 30 days to come to an arrangement with your lender to avoid it going further.

So just like the song by Metallica, Nothing else matters.

No matter what content the letter may have, unless its an LBA, or a letter stating your debt has been assigned or sold, ignore it, they mean nothing.

Exactly the advice I was looking for. Thank you! 

DebtFreeWannabe27

@sourcrates Thanks as ever for the previous advice you've offered. I always come back to this thread when I'm feeling anxious about the situation. As it stands, I've three loans with defaults showing on my credit file. My question now is should I make contact with the lenders and make token payments to them to appease them? As I mentioned before, i'm quite worried about this escalating, especially to a CCJ. I appreciate I'll get a letter before action, but if i wait until that point, I feel like I might be up against the wall and maybe they would expect a higher monthly payment? i.e. they might decide that its worth pursuing court action if I can only offer £x each month. In addition, i'm wanting to find out if I do reach out to lenders to make token payments, is it still likely that they will sell the debts on to a DCA. Obviously, the ideal scenario would be that they do, and then I'm offered reduced full and final settlement offers. Finally, as I understand it, offering these token payments won't incur an arrange to pay marker on my credit file because i've allowed the debts to default first. TIA

RAS

Once you have a default, the only thing that can extend the time period your debt is recorded on your credit record is a CCJ.

Paying a sum to your creditors reduces the risk and acknowledges the debt. It's for you to decide whether to set up an arrangement to pay now, or wait for a letter before action, both of which often discourage further legal action. In either case if the debt been assigned or sold, request CCAs.