First default letter, what next?

stu12345_2

why you worry about a debt collection company, my wife finally got her default letter for her RBS credit card, despite being on a dmp for 2 years.

all the letter asks is keep up your repayments in your dmp and it is now listed on her credit file 

nothing to worry about if any debt is then moved to a debt collection company, you just sent and set up a repayment plan with them

Rob5342

london1973 said:

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

Generally speaking debts are sold or passed to debt collection agencies at some point once they have defaulted, some companies are quicker than others . That's nothing to be worried about though, usually you just tell them what you'll be paying, set up the payments and that's that. If they are passed for collection then the collector just does the donkey work of writing to you and collecting the money so the creditor doesn't have to. If they are sold then their business model is to buy debts at a small fraction of their value, and make a return over a few years from your repayments. In both cases ss long as you are making repayments they have little incentive to do anything other than keep taking your money.

RAS

Agree with Rob and stu, you need to get your priorities right. As sourcrates points out, affordability is everything these days. If anyone complains, just explain that you have HMRC debts and need to sort those, or you'll end up being made bankrupt. They'll know that means zero payment, so a fiver, if you can afford it, will be a win for them. They may even decline it until the HMRC debt is cleared.

sourcrates

Debt collectors are used in the majority of cases, either when the debt is sold or assigned.

Only a tiny minority of original creditors chase bad debts themselves.