First default letter, what next?

london1973

I posted a few months and got some excellent advice. I have various credit cards and loans outstanding and have been ‘non-paying’ for a few months awaiting the default letters

the first notice has appeared, obviously demanding the full amount. What happens next? Do i contact them and make a payment plan or wait until it’s passed to an agency?

out of interest what happens if i continue to ignore post default, ie can i wait until all the defaults come through or should i deal with at this point, individually?

as always, thanks in advance

RAS

You need to wait until you get the actual default letter, this is only the warning.

london1973

I have this, having opened some more post!

so what next?

fatbelly

Not sure if this is a default or not.

In any case, nothing happens quickly.

If it is a default, and you know how much you want to pay them, I see no harm in starting to make payments.

london1973

I definitely have a default letter, sent 3 weeks after the notice of default and the payment deadline…I’m trying to understand why the advice is to wait until default and then start paying? What happens now, does it get nasty??!
i just want to avoid any home visits or bailiffs, that’s when it all gets very stressful with family etc

Rob5342

The reason for advising to default first is that once defaulted the debt will drop off your credit file completely after 6 years. If you make a payment arrangement with them instead then the AP marker will drop off 6 years after the debt has been paid off, which means your credit report will be harmed for much longer in the long term. Another advantage of defaulting is that the debt is normally passed to a debt collector, who are much more likely to accept a reduced settlement offer. That might not be useful now but if you manage to save some extra money over the next few years you could clear the debt for a much reduced cost.

The first contact from debt collectors is usually quite friendly - we are here to help you etc. If you ignore them they gradually move from friendly to threatening.It all moves slowly, if you need to save a bit more first then don't feel pressured into starting payments straight away, but if you can afford the payments you might as well start paying now. I've dealt with a few collectors, I've just told them what I'll be paying, set up standing order, and that was that really. I just get occasional contact with statements or to check the payments are still affordable.

Once they have been with debt collectors for a while you might want to consider asking for the CCA. If they can't produce it then they can't enforce the debt and you can stop paying it.

RAS

The most likely thing is that the creditor will sell on the debt, or hand it to a debt collection agency. Have you checked the rest of the mail for a deed of assignment?

You had a High Court Writ recovery letter? How is that debt being paid down?  And the HMRC debt? They are higher priority than this one.

Do you have a good secure emergency fund of three months income?

I'd suggest you make a nominal payment of say £5 per month for unsecured non-HMRC debt when they send the deed of assignment or details of the collections agency. And try and sort out the HMRC as a priority.

london1973

Thanks for both these super helpful responses, RAS said:

The most likely thing is that the creditor will sell on the debt, or hand it to a debt collection agency. Have you checked the rest of the mail for a deed of assignment?

You had a High Court Writ recovery letter? How is that debt being paid down?  And the HMRC debt? They are higher priority than this one.

Do you have a good secure emergency fund of three months income?

I'd suggest you make a nominal payment of say £5 per month for unsecured non-HMRC debt when they send the deed of assignment or details of the collections agency. And try and sort out the HMRC as a priority.

Rob5342 said:

The reason for advising to default first is that once defaulted the debt will drop off your credit file completely after 6 years. If you make a payment arrangement with them instead then the AP marker will drop off 6 years after the debt has been paid off, which means your credit report will be harmed for much longer in the long term. Another advantage of defaulting is that the debt is normally passed to a debt collector, who are much more likely to accept a reduced settlement offer. That might not be useful now but if you manage to save some extra money over the next few years you could clear the debt for a much reduced cost.

The first contact from debt collectors is usually quite friendly - we are here to help you etc. If you ignore them they gradually move from friendly to threatening.It all moves slowly, if you need to save a bit more first then don't feel pressured into starting payments straight away, but if you can afford the payments you might as well start paying now. I've dealt with a few collectors, I've just told them what I'll be paying, set up standing order, and that was that really. I just get occasional contact with statements or to check the payments are still affordable.

Once they have been with debt collectors for a while you might want to consider asking for the CCA. If they can't produce it then they can't enforce the debt and you can stop paying it.

RAS said:

The most likely thing is that the creditor will sell on the debt, or hand it to a debt collection agency. Have you checked the rest of the mail for a deed of assignment?

You had a High Court Writ recovery letter? How is that debt being paid down?  And the HMRC debt? They are higher priority than this one.

Do you have a good secure emergency fund of three months income?

I'd suggest you make a nominal payment of say £5 per month for unsecured non-HMRC debt when they send the deed of assignment or details of the collections agency. And try and sort out the HMRC as a priority.

Thanks both, really really helpful

the high court writ i managed to borrow and settle as it got unpleasant, i thought about reporting the bailiff but then i thought whats the point

HMRC aren’t really chasing which is good but don’t really know what to do with that, they don’t tend to accept nominal offers?

my other question was how nominal can you go with making payment offers to lenders, will they genuinely accept £5?, great for me now if thats the case

thanks again

fatbelly

They'll accept £1 if that's all you have

Token offers are just a short term strategy though

sourcrates

london1973 said:

I posted a few months and got some excellent advice. I have various credit cards and loans outstanding and have been ‘non-paying’ for a few months awaiting the default letters

the first notice has appeared, obviously demanding the full amount. What happens next? Do i contact them and make a payment plan or wait until it’s passed to an agency?

out of interest what happens if i continue to ignore post default, ie can i wait until all the defaults come through or should i deal with at this point, individually?

as always, thanks in advance

What, exactly have you received?

A default notice must be in the prescribed form and specify the nature of the alleged breach, and if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken.

It is a legal requirement that they send one to you.

It will usually give you 14 days to remedy the breach to the terms and conditions of your account, if you comply with the notice, the matter ends there (obviously we don`t want to do that) if you don`t a default "may" be registered with the credit reference agencies.

It will go on to list what actions they can take should you not remedy the breach.

This is required before a creditor can take legal action against you, but what normally happens is the debt is either sold, sent to a collector, or they simply do nothing.

The reasons why we encourage defaults have been explained to you, as soon as you see the default on your credit file, you can then take whatever actions you deem necessary.

london1973

Thabsourcrates said:

london1973 said:

I posted a few months and got some excellent advice. I have various credit cards and loans outstanding and have been ‘non-paying’ for a few months awaiting the default letters

the first notice has appeared, obviously demanding the full amount. What happens next? Do i contact them and make a payment plan or wait until it’s passed to an agency?

out of interest what happens if i continue to ignore post default, ie can i wait until all the defaults come through or should i deal with at this point, individually?

as always, thanks in advance

What, exactly have you received?

A default notice must be in the prescribed form and specify the nature of the alleged breach, and if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken.

It is a legal requirement that they send one to you.

It will usually give you 14 days to remedy the breach to the terms and conditions of your account, if you comply with the notice, the matter ends there (obviously we don`t want to do that) if you don`t a default "may" be registered with the credit reference agencies.

It will go on to list what actions they can take should you not remedy the breach.

This is required before a creditor can take legal action against you, but what normally happens is the debt is either sold, sent to a collector, or they simply do nothing.

The reasons why we encourage defaults have been explained to you, as soon as you see the default on your credit file, you can then take whatever actions you deem necessary.

Thanks for the comments here

what is the likelihood of the debt being sent to a collector, that is the one thing i need to avoid, my understanding is that this is generally not the route taken