Loan may default, what happens?

Maxrpg

I am so nervous but I have taken the plunge and cancelled direct debits for ALL my credit card and loan payments.

If someone could please clarify something for me:

1) Do I contact each one individually as they default (they won't all default at same time) and try set up a payment plan with each one - OR wait until they've all defaulted and contact stepchange and set up a combined debt management payment plan?

2) A lot of you have mentioned savings, would you recommend I save to my savings account or in cash under the mattress so to speak. I'm thinking if I start saving in to my savings account then what happens if I get taken to court CCJ and they ask for details about my savings, which I would need to declare, and they could then take away all my savings to pay off the debts, couldn't they?

Thank you for all your responses, they are helping to ease my mind and lower my heart rate.

Grumpelstiltskin

Forget  a CCJ if and it is a big if it happens you can cross that bridge at the time. Why not set up an easy access savings account somewhere different to your current account eg. a local Building Society?

Have you opened a basic current account with a banking group you don't owe anything to?

Maxrpg

Grumpelstiltskin said:

Forget  a CCJ if and it is a big if it happens you can cross that bridge at the time. Why not set up an easy access savings account somewhere different to your current account eg. a local Building Society?

Have you opened a basic current account with a banking group you don't owe anything to?

I don't think I can open another account, not on Universal Credit. My current 'current' account is with LLoyds and that has a separate savings account attached to it, I don't owe Lloyds anything though, no overdrafts or anything like that.

Grumpelstiltskin

Anyone can open a basic bank account with no overdraft, doesn't matter if you are on benefits.

Remember Lloyds is  a member of a larger group.

Maxrpg

Grumpelstiltskin said:

Anyone can open a basic bank account with no overdraft, doesn't matter if you are on benefits.

Remember Lloyds is  a member of a larger group.

Managed to open an account with Barclay's through their app, I'll put my savings in there.

Can you help with my other question though, now that I've cancelled all my direct debits, do I now just sit and wait for the default notices to come through before taking any further action?

Thank you.

sourcrates

Maxrpg said:

Can you help with my other question though, now that I've cancelled all my direct debits, do I now just sit and wait for the default notices to come through before taking any further action?

Thank you.

Basically yes, do some gardening, read a book, surf the web, anything you care to.

Keep an eye on correspondence, remember only letters need to be read, ignore emails/calls/texts etc.

Your debts may first go to a collector working on behalf of your lender, just to collect the arrears that may build up, you still don`t engage, not until the debt defaults, or if you receive a letter before action, unlikely, but we like to make you aware of each eventuality.

Maxrpg

Received my first "Default notice under section 87(1).." from Shawbrook asking me to pay off all my arrears of £2k before 30th May or further action will be taken. This isn't an actual default though is it? not yet. So I just ignore it?

They have jumped the gun a bit though, I had an agreement in place to pay £150 a month and that agreement doesn't end until 26th May when the next instalment was due. Not very nice of them. Obviously I cancelled my direct debit and wasn't go to pay that anyway, but still, I could have decided to make payments online using my card instead for all they know.

Anyway, I don't worry about this letter do I?

Thanks.

RAS

It's not a default, so stop paying until you do get one. And don't speak to them on the phone.

ManyWays

You want this default, so jumping the gun is good!

sourcrates

Its what it says on the tin, if you don`t pay your arrears, by a certain date, then the further action they mention is a default being registered on your credit file.

Which is what you want to happen.