Deaults arrived and a formal notice to pay - what next?

GentlemanJack

Morning all,

I've done as advised on here, as i will we be self-managing my own DMP.
Stopped paying all unsecured debt, some have now defaulted.
One has sent a formal notice to pay.
What do I do next?

I've had recent bereavements and been quite overwhelmed but need to get this back on track.

Is there a letter I need to be worried about, a letter before action or something?

Thanks again for all your help here x

GentlemanJack

one thing i'm worrying about now, is that I haven't contacted any of the creditors.... at all.
I've just ignored them all. Have I messed up here? Should I have been contacting them to arrange a plan?

I'm so stressed, thanks for listening.

GentlemanJack

To explain the situation further, please see below: 
PayPal credit: £4757 (defaulted)
Vanquis Cc: £1007 
MBNAcc: £3608
Admiral loan: £14009
Zopa loan: £1482 (formal letter to pay full amount)
Barclays loan: £1127 (defaulted)
HSBC overdraft: £3586

I have moved to a new bank account and cancelled all previous DD.

I have a joint mortgage with my partner.

i have told her everything about this situation.

SpireCaptain

Morning GentlemenJack,

I'm sure the wise people on here will see you right with regards deciphering the umpteen letters you'll receive with different wordings and ways to try and get you to re-engage with them and set up payments. Hold your nerve til you receive a letter before action. Your debts may get sold on yet. These letter maybe from a collection agency. 

Can I ask how long ago you stopped all the DDs please? I'm in a very similar situation and trying to gauge how long I'll have before defaults appear as to when I start cancelling DDs. 

I'll follow your progress and wish you all the best on your journey. You're in the right place her and it sounds like you're secure in your housing situation and relationship wise which will be a great help I've the coming months and years. 

GentlemanJack

SpireCaptain said:

Morning GentlemenJack,

I'm sure the wise people on here will see you right with regards deciphering the umpteen letters you'll receive with different wordings and ways to try and get you to re-engage with them and set up payments. Hold your nerve til you receive a letter before action. Your debts may get sold on yet. These letter maybe from a collection agency. 

Can I ask how long ago you stopped all the DDs please? I'm in a very similar situation and trying to gauge how long I'll have before defaults appear as to when I start cancelling DDs. 

I'll follow your progress and wish you all the best on your journey. You're in the right place her and it sounds like you're secure in your housing situation and relationship wise which will be a great help I've the coming months and years. 

Hi there, thanks for reaching out here. Appreciate the support. 

It’s taken about 3 to 4 months for the defaults to come through. Hope that helps.

One thing I’m struggling with, is from PayPal, which has now defaulted, if it was a letter before action or a letter of default. Does the letter before action need to be headlined/titled as such? Thanks 

fatbelly

It may be headed Letter of Claim

Debt Camel explains them here

https://debtcamel.co.uk/letter-before-claim-ccj/

Grumpelstiltskin

We need to see your SOA, this is the link.

SOA Calculator format for MSE and copy and paste on here.

What exactly does the PayPal letter say?

GentlemanJack

Grumpelstiltskin said:

We need to see your SOA, this is the link.

SOA Calculator format for MSE and copy and paste on here.

What exactly does the PayPal letter say?

Thanks for this - please see letter from PayPal below 

This default notice is served in accordance with FCA Consumer Credit Rules and section 87(1) of the Consumer Credit Act 1974.

We have made numerous attempts to contact you in order to discuss and resolve any outstanding issues with your account.

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Provision of Agreement Breached

You are in breach of the provisions of your PayPal Credit agreement because of your failure to make the required payments on your account on the dates they were due.

---

Nature of Breach

You have failed to make monthly payments to your account, and arrears of Xxxx are now outstanding. This breach can be remedied by paying these arrears by 12 DECEMBER 2025.

If the action required by this notice is taken before the date shown, the action below will not be taken in respect of the breach.

If you do not take the action required by this notice before the date shown then the further action set out below may be taken against you.

We may take the following actions if the overdue payments detailed in this notice remain unpaid after 12 DECEMBER 2025:

1. With effect from the date shown, terminate your agreement and require the immediate repayment of the whole amount outstanding under the agreement;

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Page 2

PayPal CREDIT

1. Take legal proceedings against you and/or instruct a third party debt collection agency to begin further collections activity to recover the whole amount outstanding under the agreement; and/or

2. Report a default on your account held by a Credit Reference Agency. We hereby give you 28 days’ notice of our intention to register the default if it has not been rectified.

If you take no action to address these arrears before 12 DECEMBER 2025, we are not required to give any further notice before taking such action, however we do understand that you may be experiencing financial difficulties and are eager to help.

If you are not sure what to do, you should get help as soon as possible. The Government’s Money Advice Service can help you find free debt advice and support, or you can contact the organisations listed in the Financial Conduct Authority’s information sheet, which is provided alongside this letter. This information sheet also contains important information about your rights. If it is not included, you should contact us to get one.

If you have difficulty in paying any sum owed under this agreement, you can apply to the court for an order to give you more time to pay any sum owed or take any other action required by this notice. The free advice services referred to in this notice and in the Financial Conduct Authority’s information sheet can help you explore this option.

Even if you are unable to make the above payment, we still want to speak with you so that we may better understand your circumstances. We would like to have the opportunity to discuss your situation in greater detail and we would welcome you to take the first step and call us at 0800 368 7151. Our hours of operation are:
Monday – Friday 8:30am to 7:00pm and Saturday 8:00am to 6:30pm.

Alternatively, you may write to us at:

PayPal Credit Collections
PO Box 5299
Unit 1–2, Chartwell Business Centre
Wigston
BN11 9UJ

RAS

Absolutely standard default letter, good and nothing to be worried about.

By law they have to ask you to repay the full amount before they are allowed to issue the default.

Well done for managing your DMP so well. 

The defaulted creditors may sell on your debt, refer it to a tame debt collector or just deal with it in-house. 

You'll receive a letter advising, which usually has the details of who to pay and the on-line banking details. Sometime in the next 6 weeks to 6 months.

Meantime, doing an SOA would really help you work out what you can afford to pay. Experience here is that first attempts often do not make provision for less frequent costs, which leads to the use of credit, so take a little time, but remember you can tweak it later.

Given the difficult year, have you been able to put anything into the emergency fund? If not, now is the time to open an easy access account and start stashing the money you would be paying the creditors, so you have a future buffer.

Grumpelstiltskin

OK Not a letter before action, wait to see what you get next. Don't contact them at the moment, your SOA will give us an idea of the full situation and we can advise you what to do next.

sourcrates

Its just a standard default notice issued under sec 87(1) CCA, which is what you were after.

At some point after the notice expires PayPal will either assign your debt to a debt collector, or they may sell it on to a 3rd party, either way, you will be written too.

If a letter is received headed "letter before claim" or anything similar to that, and is accompanied by a document they require you to fill in and return within 30 days, please post back for advice, as you must agree terms at that point in order to avoid a CCJ.

Legal action is extremely rare at this early stage but it can happen, so its very important to take note of what comes in the post, you can ignore calls/texts and emails, anything of importance comes in the post.

Otherwise, there`s no need to panic, these are statutory notices that must be sent to comply with the consumer credit act, and unless you are wanting to rectify the breech to your account, are simply for information purposes only.