Default on a loan

vicallen2004

Hello out there, I was wondering if anyone could help?? My OH is terrible with money and has had a number of outstanding credit cards and loans from getting in a mess when he was younger (he's 27).

He has a loan from Lloyds that is about 9K. He has been on reduced payment plans for about a year after the payments were choking him. They were wanting nearly £300 a month but this has been reduced to £80, The interest has still been added on though. The bank usually isn't very sympathetic to our situation and don't understand that he wants to pay the loan but with interest and charges, it's an impossibilty at the rate they want. He owes more now than what he originally borrowed. The advisor he last spoke to informed him that the account was still with the usual banking department and would be reassesed every six months but she could pass it on to a different department and they would be able to sort something out long term. She warned us that it would effect his credit rating and we would get some quite heavy handed letters before an agreement was sorted out. He has now had a default notice saying he is going to have to go to count now unless he pays £5k. We didn't realise we would have to get the courts involved and we are both a bit worried now. We just thought it would go to a collection agency or something.

I was wondering if anyone else had experienced this, just to give us the heads up. Also, is a default notice as serious as a CCJ? Any help would be appreciated.

Many Thanks, Vicky. x

Voyager2002

I am sure that the demand for immediate payment and the threat of court action are a formality. Of course he needs to respond, but the bank would have to be daft to take him to court when he is willing to negotiate a sensible arrangement.

vicallen2004

Thats what we thought. Do you know what effect a default has a person's credit rating and how long it lasts for?

Thanks in anticipation, Vicky.

CLAPTON

a default trashes their credit rating for 6 years