Default and DMP advise

Moxy10

https://forums.moneysavingexpert.com/discussion/comment/81933366#Comment_81933366

Thank you @Grumpelstiltskin

So the default markers will disappear from my credit file, but the debts remain on there until settled? Showing as owned by Lowell? Have I got that right?

And if so, will they show as active accounts as opposed to defaulted accounts?

RAS

Six years after the date of the default the mark on your credit record disappears, in practice expect this to take 2-4 months. No further mark appears on your credit record unless the creditor has obtained a CCJ.

But if you are paying during that 6 years, the debt remains enforceable.

sourcrates

The whole entry will disappear after 6 years from the date of default regardless of what you do, pay it, don`t pay it, nothing will change that.

CCJ`s, which you won`t get if your on a payment plan, show in the "public information" section of your credit file and won`t stipulate any particular creditor.

And that is universal across the UK, inc Scotland.

People sometimes mix up the limitation period, which in Scotland is 5 years, and the rest of UK which is 6 years, with the time a default is shown on your credit file, which again, just to confirm, is 6 years not 5.

Moxy10

Thanks all, much appreciated. Just to clarify @sourcrates ‘The whole entry will disappear after 6 years from the date of default regardless of what you do, pay it, don`t pay it, nothing will change that’

So the debt itself disappears from my credit file?

I understand that I still have to pay it/is still enforceable as I’m paying it now on a payment plan with Lowell - if not settled within the 6 years, which I’m hoping won’t be the case.

Thanks again all 😊

sourcrates

For the avoidance of doubt, once defaulted, a debt will show for 6 years from the date of default, and after that it will vanish forever, regardless of what you do, can`t be any clearer than that.

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/81934569#Comment_81934569

The only way future creditors will be able to see anything to do with previously defaulted debts is if they ask for bank statements (for example for a mortgage) and they'd see any payments being made to Lowells etc. otherwise your credit file will show no negative marks after that 6 years has elapsed.

I suppose you could set up a sole bank account with no overdraft to make any payments to any debt purchasing companies and keep your day to day spending and income separate. I used to do that with a National Lottery direct debit in its own specific current account but now it's been cancelled and the no overdraft account is being used as my "safe" account ready for DMP.

Moxy10

Thank you both for clarifying.

@SpireCaptain Good idea about the separate account, I think I’ll do that purely for the Lowell payments.