Default notice advice please.

System

This discussion was created from comments split from: Waiting for defaults.

Nenusia

Good afternoon all. Hope you're all well. I just received a default notice served under section 87(1) of the Consumer Credit Act 1974. It's scary as it says I need to pay my two missed payments asap otherwise they will end loan agreement and I will have to pay the full amount I owe. Please help me to understand my situation. Thanks 

fatbelly

It's just a standard notice that allows them to accept a lower offer or sell the debt to someone else.

Presumably you knew that you had missed multiple payments. 

What were you planning to do?

Nenusia

So initially I contacted Lloyds Bank back in July and I was told that interest will be frozen and I don't need to make any payments until I can afford it again. Now I got this notice and I m all confused again. 

fatbelly

You don't need to do anything.

They will probably now sell it to a third party.

I think you do need a proper strategy though

Nenusia

So once it's sold, should I arrange debt management plan?

fatbelly

Can you afford to make payments that clear the debt in a reasonable time?

If so, you could start now or hold on and see what they do

RAS

What sort of emergency fund have you saved whilst waiting for the defaults? 

Nenusia

I only have £1000 as I am the only one working ATM. My partner is off sick and get only little help from universal credit. It's been really hard 

sourcrates

Nenusia said:

So initially I contacted Lloyds Bank back in July and I was told that interest will be frozen and I don't need to make any payments until I can afford it again. Now I got this notice and I m all confused again. 

These informal arrangements are not intended to be long term debt solutions, once you can no longer afford the contractual repayments, they will see you as a liability, so have taken a commercial decision to default the debt and will now most likely sell the account to a 3rd party.

Whatever happens you will be written too, but just keep in mind, this debt is a non priority debt, so if you can`t afford to pay it, say so, never offer a payment amount you cannot afford.