I have received a default notice. What does this mean?
by Paul 11 months ago.
Someone I owe money to sent me a default notice this morning. It has big red writing and says they may take me to court. What do I do now?
Answered by Johanna Toomer last updated 9 months ago.
The people you owe have to send you a default notice under the Consumer Credit Act 1974, letting you know you have broken your credit agreement because you are not up-to-date with your repayments.
As a Debt Line customer you are paying what you can afford instead of your contractual payments. As a result, your arrears will build up which triggers the Default Notice being sent to you.
These letters are strongly worded and will often ask you to settle the debt in full. You do not have to meet their demands unless you can afford to.
Often after a default the debt will transfer to a 3rd party collection agency. You don't need to worry because these 3rd parties tend to be a lot smaller and more willing to negotiate with us anyway.
If court action is taken by your creditors following a default it may result in them registering a County Court Judgement against you. The issuing of an order by the court may demand that the debt is repaid either immediately or by instalments.
Default notices generally stay on your credit file for six years and may incur costs that are added to the debt. Having a default notice on your credit file may hinder your ability to obtain credit in the short term and there is a likelihood that you will not be able to do so in the medium or long term either.
What we concentrate on at Debt Line is getting you debt free at an affordable rate, not on your eligibility for obtaining credit whilst you still have outstanding debts. All that you can do is pay the maximum that is affordable for you and we will take care of the rest.
P.S. Remember, like all documentation sent to you by the people you owe money to, keep this notice safe for your reference.
by Charlie Adams 10 months ago.
Hello Ms. Holmes,
Even though we are acting on your behalf the debt remains in your name. By law, they have to send you these letters to keep you up to date with what is happening to your debt.
Thanks!
by Tamas 10 months ago.
If I am paying my debts through Debt Line (longer than 3 month ago) is it still possible that any court action is taken?
by Johanna Toomer 10 months ago.
Hi Tamas,
We can never guarantee that any of the people you owe money to will not take court action. However, Debt Line are here to help you each step of getting yourself debt free. This would include, guiding you through the process of filling in any court forms and making sure that the repayment ordered by the court is affordable based on your circumstances.
Being on board with Debt Line does not stop the people you owe money to from taking further action but in our experience, if you're making regular payments on your debt management plan, a more likely action is that the debt will be transferred to a 3rd party.
Thanks!
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by Ms. Holmes 10 months ago.
Why do they send this letter to me? Surely they should be sending this to you as you are dealing with my debts!