notice of sums in arrears letter re. car finance

ih8stress

Hi,

trying to help a family member who have got a letter recently saying the following:

LETTER:

This is a notice of sums in arrears served in accordance with Section 86B of the Consumer Credit Act 1974
(CCA) because you are behind with your payments in relation to the Agreement set out above.
Please contact us as soon as possible to discuss your account. We may be able to help you and discuss options if you're unable to make your payments on time.

Default Sums and Interest
You may have to pay default sums and interest in relation to the missed or partly made payments referred to in this notice (in addition to any default sums and interest included in this notice).
Please contact us if you would like further details.
This notice does not take account of any payments received after the date of this notice.

Notices
For so long as you continue to be behind with your payments by any amount, you will be sent notices about this at least every six months.
We are not required to send you notices more frequently than this, even if you get further behind with your payments inbetween notices.

FINANCIAL CONDUCT AUTHORITY INFORMATION SHEET
This notice should include a copy of the current information sheet on arrears prepared by the FCA.
This contains important information about your rights and where to go for support and advice, for example on applying for a Time Order as well as our right to charge you interest.
If it is not included, you should contact us to get one.
Please refer to it for advice on dealing with your debt.

Please don't ignore this notice
A delay in payment is a breach of the terms of the agreement you have with us and can lead to a
notice of default being issued and your Agreement being terminated.
Please contact us - number above - and talk to a member of the team who can help.

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ARREARS NOTICE:

account details

Date of notice:

Outstanding balance:

Arrears balance:  (same amount as closing arrears balance)

Notice period: 

from April 2025

to: October 2025

Arrear balances:

Opening arrears balance: (smaller amount to arrears balance/closing arrears balance)

Closing arrears balance: (same amount as arrears balance)

Transaction summary:

April 2025   Opening balance

October 2025  Closing balance

All payments received are subject to clearance

Balance outstanding: (same amount showing for opening and closing balances

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I only have brief details at the moment from them - 

they had a 3 month payment holiday on it and then also had a second one (details are sketchy on how this one came about) due to being off work for a few months due to health.

They have an IVA (but specifically insisted this car finance was EXCLUDED from it as the car was a necessity for work, which was agreed).

They rang the Finance Company after receiving the letter but were not given any help, just told they had to pay it.

I have offered to help them with the payment as a one-off. My queries are:

1. The letter does not seem to specify how long they have to pay the arrears.

2. It doesn't show any breakdown of the arrears as far as I can see.

3. They mention possible default sums and interest in relation to the missed or partly made payments referred to in this notice (in addition to any default sums and interest included in this notice) but only advise to talk to them about these

4. Do they have up to 28 days from receipt of this letter before they would get a Default Notice?

5. Would they then have a further 14 days to clear THE ARREARS without anything else being affected?

I am trying to sort out the money for them for the arrears, I just don't want them to get into further difficulties with it and end up with a Default OR even worse, have to pay off the FULL loan etc.

Appreciate any advice, thanks

sourcrates

How many payments have they missed?, the notice should tell you this, but doesn't appear too.

Arrears should be paid before the next monthly payment is due, otherwise another late payment notice will be triggered.

The default sums fee is usually £12 a month.

They have to miss between 3 and 6 monthly payments for the account to potentially default.

ih8stress

sourcrates said:

How many payments have they missed?, the notice should tell you this, but doesn't appear too.

I think they've missed 6 payments as they had TWO x 3 month payment holidays. I am not sure if these were continuous or if there was a break inbetween the two (I have asked them, not had a reply yet)

Arrears should be paid before the next monthly payment is due, otherwise another late payment notice will be triggered.

I'll find out when the next payment is due, thanks for the tip

The Agreement start date was mid-month

The Transaction Summary in the Arrears notice is the end of April and end of October

The default sums fee is usually £12 a month.

Thank you for that information. There seems to be very little detail in the letter or Arrears Notice

They have to miss between 3 and 6 monthly payments for the account to potentially default.

Yes, they will have done that, which is why I am trying to sort it before it gets to that stage

Thank you for answering question number 3.

Does the £12 Default Fee include interest, or would this be extra?

If they send a Notice of Default before we can put anything in place, do we have up to 14 days to pay off the ARREARS (and they will not demand the full amount or put a Default on their credit file)?

It is frustrating that there is so little detail in the letter or Notice they sent.

I have just tried to do a quick calculation.

Monthly Payment x 6 (mth)

Default Fee @ £12 x 6 (mth)

= £xx amount

The total of these is approx. £190 out according to the Arrears Balance they quote.

The £190 doesn't equate to a monthly payment.

Am I missing something here - interest, other charges etc?