Is my account defaulted confusion! Self managed DMP

On_a_mission_

I’m starting a self managed DMP and waiting for defaults. 

Amex has been the first to move and I’ve received a notice of default last month and now a final demand and notice of termination. I have also been contacted by NCO debt collection agency. 

I thought this is now my trigger to start payments but I’ve noticed that the letter states that within 28 days they may register the default with the credit reference agencies and that interest is still being incurred. 

I thought interest stopped once the account is defaulted?

I’ve copied the letter below, would anyone be able to advise if this is my account formally defaulted or do I need to wait for the next letter?

Many thanks in advance.

Final Demand and Notice of Termination

This letter is our formal demand for payment of the full outstanding balance of £XXX in respect of the agreement referenced above. Please note any Unbilled/Pending transactions may not be included in the outstanding balance above and will also need to be paid.

Please be advised that your agreement is terminated with immediate effect and all monies outstanding on the account (including any new transactions or cash advances) are now payable in full. Also know that we will continue to charge interest on the outstanding balance in accordance with your Credit Card Agreement until it is repaid.

Cards can no longer be used and must be cut in two or otherwise destroyed. If you have used your Card to pay for any subscriptions and/or insurance policies, you will now need to make alternative arrangements as these payments can no longer be made using your Card.

Your account may now be passed to a debt collection agency. You will shortly receive a letter from us containing details of the debt collection agency or American Express department you will need to contact. Once this has happener you should send all correspondence regarding your account directly to the specified department or agency.

After a period of 28 days from the date of this letter, steps may be taken to register the default status of your account with the credit reference agencies, Experian Limited, Calleredit Limited and Equifax Limited. This may affect your ability to obtain credit in the future, as the information we register may be shared with other organisations and used when assessing applications from you and anyone with whom you have a financial association, for credit or other facilities.

All further matters regarding this account must be directed to the department or agency we specify in our next letter.

The agency or department will also contact you shortly.

fatbelly

I would say it's terminated and the default will be registered in a few weeks. Give it a couple of months, then check, then start paying NCO. You should find there is by then a figure that will only go down with the amount you pay.

On_a_mission_

Ok, thanks for the quick response. Appreciate the advice

sourcrates

Once registered, the default date will clearly show on your credit reports.

Starfish75789

@On_a_mission_ For me I stopped paying Amex back in May 2024. I then received letters advising they "may" take actions etc They closed my account and sent me a default notice at the end of August....They then passed this to NCO. I didn't hear of them until I think was November. However my default didn't appear on my credit report until December 24.So I had a long wait between the default being sent and it being registered. Ive been using Clearscore and credit Karma. It appeared on all of them around the same time. 

As I'm self managing my DMP It was as this point I sent a letter to NCO advising how much I would be paying by standing order and first payment would be the end of Feb. Which they emailed me back and accepted.

For me NCO kept writing and emailing until I went on their  website and filled out their payment plan. I didn't have to give any details apart from how much id be paying, clicked standing order and a date. I haven't heard of them since.

On_a_mission_

Starfish75789 said:

@On_a_mission_ For me I stopped paying Amex back in May 2024. I then received letters advising they "may" take actions etc They closed my account and sent me a default notice at the end of August....They then passed this to NCO. I didn't hear of them until I think was November. However my default didn't appear on my credit report until December 24.So I had a long wait between the default being sent and it being registered. Ive been using Clearscore and credit Karma. It appeared on all of them around the same time. 

As I'm self managing my DMP It was as this point I sent a letter to NCO advising how much I would be paying by standing order and first payment would be the end of Feb. Which they emailed me back and accepted.

For me NCO kept writing and emailing until I went on their  website and filled out their payment plan. I didn't have to give any details apart from how much id be paying, clicked standing order and a date. I haven't heard of them since.

Thank you for sharing your experience. Seems like they go all guns blazing initially but then takes a while for the actual action to happen. I stopped paying in October and this is the first to go to termination and debt collection. I’ve been on the NCO website and registered so I’m ready but didn’t want to move too quickly and now having heard your experience I’ll sit and wait. 

HenryMSingh85

A few tips that could help:

1) Pay attention to any default date as this is crucial - as after six years this is removed from file
2) Interest should stop once the default is registered and the debt is passed to a collection agency  (some creditors may continue to add interest though). Also, once the default is registered, you can formally request that interest is frozen
3) Debt charities such as StepChange or National Debtline can help draft a letter requesting this
4) Wait until the default is officially registered before making payments and then you can include this in your self managed DMP at a more manageable repayment rate
5) Check your credit report after 28 days to confirm the default is listed (if you can)