If I Default on Credit Card Will my Overdraft Be Cancelled? - Scotland.

debtslave2024

@RAS The debts will default unless I can find a job in 30 days (highly unlikely.) I am in Scotland. What are these letters before action, and how should I respond if I receive one? Should I setup small payments immediately on default to “keep the wolves from the door”?

sourcrates

debtslave2024 said:

@RAS The debts will default unless I can find a job in 30 days (highly unlikely.) I am in Scotland. What are these letters before action, and how should I respond if I receive one? Should I setup small payments immediately on default to “keep the wolves from the door”?

One step at a time, the list of what "could" happen is a long one, what actually tends to happen if you stop paying your non essential credit debts is actually very little.

There are various stages to debt collection, once you stop payments, there could be anywhere between 3/9 months before your accounts are defaulted, some lenders are quicker than others, but essentially a year is not unheard of, during that time collection activity will consist of letters and phone calls, not much else.

Lenders may assign your debts to debt collectors who will go through there standard letters with you, they will only be engaged to collect the outstanding balance, they won`t own the debts they chase, so can be ignored essentially.

The real issues can start when your accounts get sold to 3rd party companies, they inherit all rights and privileges of the original owner, so can, on occasion, take legal action if you ignore them for any length of time.

Again, they must act according to the civil procedure rules, and a letter before action will state what it is, and what you have  to do to avoid the matter going to court.

You are a long way off any of this at the moment, you will be fine for a good few months, if you still can`t afford payments after a while, best to tell them that and why, to stop any further action from happening, if they know you can`t pay due to unemployment, they won`t expect you to pay anything.

debtslave2024

@sourcrates, thanks for this advice, I will try not to ponder over my predicament too much this evening. I reckon that I can muster up some form of employment within the next 6 months. It is the fear of the unknown that gets to me.

RAS

Scottish law is so different from Scottish law that ideally you'd edit your thread title to include (Scotland). 

This avoids you being given advice by English posters who don't know there is a difference.

And wishing you luck and success.

sourcrates

RAS said:

Scottish law is so different from Scottish law that ideally you'd edit your thread title to include (Scotland). 

This avoids you being given advice by English posters who don't know there is a difference.

And wishing you luck and success.

@RAS One too many "Scottish" lol

sourcrates

debtslave2024 said:

@sourcrates, thanks for this advice, I will try not to ponder over my predicament too much this evening. I reckon that I can muster up some form of employment within the next 6 months. It is the fear of the unknown that gets to me.

The debt collection process doesn't differ that much in Scotland, although the terminology is different, debt solutions are different, and limitation periods are also different.

Usually banks use a standard collection process common in all of the UK, but there may be some discrepancies unique to Scotland.

I wouldn`t dwell too much on what might happen, take things a step at a time.

debtslave2024

@sourcrates Thanks, and I agree, one day at a time!

debtslave2024

@sourcrates I probably will not go down this option, but am just curious. Will paying the £215 arrears, and then one minimum payment afterwards then push the default “down the road” by months? The guy on the credit card phone line, said no.

sourcrates

debtslave2024 said:

@sourcrates I probably will not go down this option, but am just curious. Will paying the £215 arrears, and then one minimum payment afterwards then push the default “down the road” by months? The guy on the credit card phone line, said no.

The bank want to keep you as a customer, as you make money for them, if you bring your account up to date, then you are back to the normal position of keeping to the terms of your credit agreement.

You are only defaulted when you have missed between 3/6 payments in a row, and the bank feel that the relationship between you is irrevocably compromised, the best tip I can give you is don`t ask credit card customer services for debt advice.

debtslave2024

@sourcrates I have been on “breathing space” with this bank for 12 months now, and only over past 4 months or so given them token payments to reduce the arrears. They now say, after 12 months of not actually meeting the “real payments,” they have no option left but to enact a default. They also said they will not take court action against me (according to guy on phone.) They said once default takes place, they may try and get me to make some form of payments directly to themselves, or a debt collection company.