Default and DMP advise

Moxy10

Hi all, 

After a bit of advise please, I have x2 cc (Halifax and MBNA, total approx £24k) that I have stopped paying (last payments made were in Nov24 MBNA and Dec24 Halifax) I have today received a letter from Halifax stating that I have 14days to make payment of the outstanding minimum payment due otherwise they may end my agreement. Enclosed with the letter is a default notice served under section 87(1) of CCA 1974 - this says if they don’t receive minimum payment due within the 14 days they will end agreement, ask me to pay full amount, register a default notice, may sell the debt.. 

Sounds silly I know, but does this mean they have now defaulted my account? 

And when do I start a DMP?
Do I do it with Halifax or wait until they sell the debt? Assuming they sell it? 

I plan to self manage my DMPs as Stepchange suggested I make payment arrangements with both lenders back in December but the advice on here was to let the accounts default to reduce the length of time my credit score would be affected for, rather than have arrangement to pay markers on my credit file.  

This is all new to me and feels very scary, having never missed payments or defaulted on a credit agreement before. 

Any advice is very gratefully received, thanks in advance. 

Grumpelstiltskin

OK don't be scared the letter is just the normal one, they have to word it like that.

Does the default show up on your credit report?

sourcrates

This has been asked a few times in recent days, sec 87(1) CCA, is the part of the consumer credit act that deals with the need for a default notice, this is essentially the start of the default process.

Its a legally worded document they must send you by law, don`t worry, nothing is going to happen if you ignore it.

It means exactly what it says, if you fail to bring the account up to date within 14 days then a default will be registered on your credit file, hurrah I hear you cry!!

That`s it really, just do nothing, allow the time to elapse, and the process to complete.

Everything may go quiet for short while, then Barclaycard will write to you, they tend to off load their defaulted accounts pretty quickly, they tend to sell them to PRA Group, although there are others, whatever happens, whoever buys it, you will be written too first, don`t do anything till then.

Moxy10

Grumpelstiltskin said:

OK don't be scared the letter is just the normal one, they have to word it like that.

Does the default show up on your credit report?

Both accounts are showing as ‘delinquent’ and missed payments, I can’t see a default on either. 

Grumpelstiltskin

OK hang on until you see the defaults.

Moxy10

Thank you @Grumpelstiltskin and @sourcrates

I will keep an eye on my credit file for a default marker and wait to hear that the Halifax debt has been sold, and to whom. 

Moxy10

Just an update, I have now received the default notice letter for my MBNA debt. So both Halifax and MBNA has issued me with the default notices. 

No default showing on my credit file as yet. 

I’ve had another letter from Halifax asking me to pay the missed payment amount, even though they sent the default letter late March and I’m now passed the 14days they gave me to pay the arrears. 

Question - Will the next letter I get be them asking me to pay the debt in full? And do I ignore that until they sell the debt? Or do I start my DMP with them at that point? 

Many thanks in advance 

sourcrates

Not necessarily, companies gave up a long time ago asking you to repay debts in full, except in statutory notices.

The next you will hear from them is that they have sold your account most likely.

Barclaycard don`t hold on to defaulted debts very long.

Moxy10

Ok, thank you. I’ll sit tight til I hear and then start my DMP with whoever buys the debt.