Received a default notice from credit card company

[Sam45]

Hi,

I am sorry as this may have been covered elsewhere and the lengthy text below. I am wondering if anyone can urgently help me.

I have been ill since July last year and had informed my credit company who had put me on a 'medical leave' stopping interest charges. I had supplied them with medical letters since and been in communication with them.

On 8th January 2016, I received a letter stating a default notice has been served under section 87(1) Consumer Act 1974 to bring my minimum payments of £1300 up to date by 5th February 2016.

I spoke to them around this date informing them I am still unwell and suffering from stress. They said they would not be able to give me further medical leave and I would need to speak to Step Change or fill in a payment plan form,etc and they gave me a further 14/28 days.

With my health issues and stress, I cannot deal with any more paperwork/stress/calls so decided that the best thing to do was to borrow money from friends and family to pay the total debt off which I gathered.

However today, I have received a letter stating a default notice has been registered on my credit file for the full amount owed £8000 {not the minimum amount previously claimed), stating I had a formal notice that gave me 28 days to fully clear my outstanding arrears (actually the formal notice only asked for the minimum payment arrears) and 'we didn't expect you to clear your arrears but we need to let you know that a default has now been registered with the credit reference agencies' and this will stay on my credit records for 6 years' .

The question I have is there anything I can do to remove this default notice. I cannot afford to have this on my credit files as I will be looking for a mortgage in the future and I would have thought that they would have at least contacted me one last time in view of our conversation and my health.

Does it stay on your records whether you pay or not and is it worth ringing the credit card company to discuss.

Any help/advice would be really appreciated.
Thanks.

[charitynjw]

Re: Received a default notice from credit card company

Hi,

I am sorry as this may have been covered elsewhere and the lengthy text below. I am wondering if anyone can urgently help me.

I have been ill since July last year and had informed my credit company who had put me on a 'medical leave' stopping interest charges. I had supplied them with medical letters since and been in communication with them.

On 8th January 2016, I received a letter stating a default notice has been served under section 87(1) Consumer Act 1974 to bring my minimum payments of £1300 up to date by 5th February 2016.

I spoke to them around this date informing them I am still unwell and suffering from stress. They said they would not be able to give me further medical leave and I would need to speak to Step Change or fill in a payment plan form,etc and they gave me a further 14/28 days.

With my health issues and stress, I cannot deal with any more paperwork/stress/calls so decided that the best thing to do was to borrow money from friends and family to pay the total debt off which I gathered.

However today, I have received a letter stating a default notice has been registered on my credit file for the full amount owed £8000 {not the minimum amount previously claimed), stating I had a formal notice that gave me 28 days to fully clear my outstanding arrears (actually the formal notice only asked for the minimum payment arrears) and 'we didn't expect you to clear your arrears but we need to let you know that a default has now been registered with the credit reference agencies' and this will stay on my credit records for 6 years' .

The question I have is there anything I can do to remove this default notice. I cannot afford to have this on my credit files as I will be looking for a mortgage in the future and I would have thought that they would have at least contacted me one last time in view of our conversation and my health.

Does it stay on your records whether you pay or not and is it worth ringing the credit card company to discuss.

Any help/advice would be really appreciated.
Thanks.

Hi Sam45 & welcome to Legal Beagles.

Was it 14 days or 28 days?

[nemesis45]

Re: Received a default notice from credit card company

Good morning Sam. welcome to LB.

Sorry to hear of your illness.

Which credit card provider is this?

It looks like ( a guess) that the card provider has allowed 6 months of no interest and charges a remedy laid down in the terms and condition. Did the provider at this point require or did you offer reduced payments?

You say a minimum monthly payments of £1300, do you mean arrears of this amount?

A default notice gives a debtor a fixed period of time to rectify the default e.g. 14 days, the card provider has then allowed period of a maximum 28 days for you to rectify the default.

As to the loan (s) you intended to obtain, did you inform the provider that you intended to take this course of action? If not I think this is the reason the default has been registered with the credit reference agencies,

The reporting of debts to credit reference agencies is regulated by the Information Commissioners Office which takes the view that credit files must be an accurate and up to date reflection of the conduct of the account, which appears to be the situation here.

The default notice correctly required the arrears to be paid within 28 days when this did not happen the whole outstanding balance became due and in accordance with the DN the default was registered
correctly.

Yes a defaulted account remains on credit files for 6 years from the default date after which it is removed paid or not, a default rectified at a later date will lead to the account being marked as " satisfied" if pain in full or " partially" satisfied if an agreed partial payment is accepted in " full and final settlement".

You can of course attempt to negotiate with the card provider on settlement but I suspect that the card provider will quote the ICO's view as above..
In my opinion borrowing money to repay borrowings is self defeating leaving you with more debts to pay in what seems to be uncertain times because of your health problems.

In many ways a default entry is better than an arrangement to pay (AP) marker on credit files as these will remain for longer.

Sorry if this is not what you wanted to hear.

I hope you get well soon Sam.

nem

[Sam45]

Re: Received a default notice from credit card company

Hi Charitynjw,

It was 28 days.

[charitynjw]

Re: Received a default notice from credit card company

Is this the only .black mark' on your credit file?

[Sam45]

Re: Received a default notice from credit card company

Yes, apart from the records of the unpaid monthly credit card payments since June/July.

[charitynjw]

Re: Received a default notice from credit card company

Any indication in the letter or the CCA DN that this matter is headed for court?

[Sam45]

Re: Received a default notice from credit card company

Hi Nemesis45,

It is Barclaycard.

Around 8th January 2016, they did suggest a reduced payment plan which I was not interested in when I found out that the payments would be recorded as partial payments only on my credit file and could have repercussions.

Sorry yes, the Default Notice letter states £1300 total arrears (several missed minimum payments) to be paid by 5th February 2016.

During the conversation around 5th February 2016, I did indicate that I would be trying to get monies from friends/family to pay the full amount as this would probably be best in view of the stress and health issues I was suffering from. They had also suggested I speak to Stepchange and gave me a months extension medical hold.

During the conversations of January and February 2016 they did not make it clear that the total missed minimum payment arrears must be made disregarding any extensions on the medical hold or else a default would be registered. As had they done this, I would have paid the minimum payment arrears of £1300 there and then rather than trying to gather money to pay the full amount. I am not sure what the 1 month medical holds extensions were for then if not to hold everything.

Moreso, the default notice was registered on 26th February 2016- so in the one month mutually agreed medical extension.

Would this not be regarded as misleading customers especially when I was already unwell and stressed which they knew? And should they not have at least contacted me prior to the final default in view of the one month extension?

It seems that on one hand they were 'helping' but on the other hand doing what they wanted to do anyway. Can I take this to the Ombudsman?

[Sam45]

Re: Received a default notice from credit card company

Yes there seems to be.
On the 8th January Default Notice, it states 'if you do not take the action required by this notice before the date shown, then further action set out below may be taken against you.

-Your account will be closed.If this happens you will still be required to repay the outstanding balance
-We will send you a Default Registration Notice. This will ask for the repayment of the whole balance. If you do not pay this, we may take further action to recover the balance in full.
- details of this default on your account will be registered with credit reference agencies, which could make it harder for you to get credit in the future '

and

'If you have difficult in paying any sum owing under the agreement or taking any other action required by this notice, you can apply to the court which may make an order allowing you or any surety more time'

there is another letter I have found dated 8th January 2016 too. Is there a way to securely email copies to you?