Second charge/Secured loan

[Ruby]

I would really appreciate anyone's help/advice with an issue I am having with Arrow Global at the moment with regard to a secured second charge that we have with them. They bought this charge from a company called ADV2 back in 2012.

We took out a secured loan with ADV2 back in 2008 but with the financial crisis looming we soon fell into financial difficulty with the consequence of missing payments and paying less than our contractual amount. In 2012 Arrow bought our account with a number of others in bulk. During that time on our credit report it showed as '6' which means that the account was six or more months in arrears but not defaulted.

Since then we have been making regular contractual payments and have asked Arrow to capitalize our arrears so that we can either move home or re-mortgage and pay them off. With a constant '6' on our credit report no mortgage company will touch us. Arrow have declined our request.

What we are aiming for now is for them to either capitalize our arrears or default us so at lease we have a beginning and an end date for the negative impact on our credit score. A '6' has been showing on our credit score for years and will carry on doing so indefinitely. The regular payments we are making are not being used to pay off the arrears first, Arrow are crediting these against the actual overall outstanding loan amount.

I do not have any other defaults or CCJ's on my credit report (free of those at last!!) but this negative input from Arrow has prohibited my husband from growing his business or us obtaining any credit/loan of any kind, including leasing a car.

I would also like to argue our case that actually the account should have been defaulted back in 2012 when they purchased the account. Can a default be applied retrospectively?

Also, can they implement court action without officially defaulting the account first?

[Debt Camel]

Re: Second charge/Secured loan

The good news is that you can get a default date changed so that it is earlier, see http://debtcamel.co.uk/debt-default-date/

HOWEVER this is highly unlikely to improve your position for getting a remortgage where you are now or a new mortgage if you move. A default date of 2012 will still show on your credit record until 2018. And even when it has disappeared the defaulted debt will staill exist and will have to be reported on any mortgage application.

How large is this secured loan? How large are the arrears? When does it end?

How large is your mortgage? Is it repayment of interest only?

How much is your house worth?

How large are your other debts?

[Ruby]

Re: Second charge/Secured loan

I understand that a default will sit on my file till 2018, to me I see that as only being two years away and at least we will be able to move on with our lives and get a business loan to grow my husband's business and also purchase basics like a car on credit!

the default debt will indeed still exist and in time will be paid off but in the meantime we will be able to rebuild our lives where as at present I feel we are in limbo. Lets forget about the re-mortgage sides of things at present, that is of least importance to us.

Mortgages and other secured loans are an exception to the general “3-6 months in arrears” guidelines. In 2007 the ICO issued technical guidance on Filing Defaults With Credit Reference Agencies, see paragraph 14 for this specific area. A mortgage lender has much more discretion on when to record a default, but it should generally not be later than six months after any repossession, unless certain exceptions apply.
Bummer!! I read from this that they would have to repossess our house first before issuing a default?

Are there any protocols that state that any monies paid towards a loan should go first towards paying off the arrears?

Also, are there any rules about a debt being sold to a DCA? should the debt not be defaulted first? We already had arrears on the account before the account was sold.

[Debt Camel]

Re: Second charge/Secured loan

Are there any protocols that state that any monies paid towards a loan should go first towards paying off the arrears?

Well only if you are making overpayments - are you?

It wouldn't make any sense for your normal payments to be used to repay arrears as you would just be missing a normal payment so would get more arrears.

How much are you paying towards these arrears?

I'm sorry but these arrears need to be your top priority to clear - not getting "basics" like a car on finance.

[Ruby]

Re: Second charge/Secured loan

Well only if you are making overpayments - are you? - yes we are

I'm sorry but these arrears need to be your top priority to clear - not getting "basics" like a car on finance - sorry to disagree with you but need the car to commute to work! No car, no work, no pay .....

I really ideally want this company to capitialise the rest of the arrears, which the Ministry of Justice guidelines recommend. Unfortunately it sounds like a default won't happen without a repossession order first :tinysmile_cry_t:

[wales01man]

Re: Second charge/Secured loan

You may not like this but you can get a car in good running order a clean looking for about 400 quid maybe your priorities here are wrong. If you get reposed bang goes everything

[Debt Camel]

Re: Second charge/Secured loan

Well only if you are making overpayments - are you? - yes we are

So the arrears are going down surely? How long until they are cleared?

[Ruby]

Re: Second charge/Secured loan

So the arrears are going down surely? How long until they are cleared?t Yes they are, just not quick enough, probably another 3 years or so. That's why I thought a default would be quicker. I think I ought to mention this is an unregulated secured second charge with a heep load of historical issues attached to it.

I understand where you coming from Debt Camel. I certainly would not recommend to anyone not to pay their mortgage or second charge and certainly to keep this as a priority debt and pay off any arrears as quickly as possible, etc.....

I think my case is probably just a wee bit more complicated and I have not explained myself as fully as I thought. Thanks for your input anyway DC

[Fred]

Re: Second charge/Secured loan

Just to note.............second charge lenders are a peculiar bunch mainly, because they can be, especially "unregulated" they will take off payments normally on the account balance first then, work on the interest. Usually (unless they are taking serious advantage) the arrears will be placed in separate account & accrue interest (not compound) as the balance does.

When this happens you usually find your credit report is "whatever they dictate" & perhaps not a true reflection of what is actually owed under the term along with any charges or arrears.

It differs that much from lender to lender I can not state for sure what they will report.

I fully sympathise with the credit report stuff & the damage it does, I, have no answer for you on this other than keep going steady with your priorities.