Issuing Defaults

[saucepan]

Hi! I have an old loan with Alliance and Leiceter which defaulted in 2004. Have been on payment arrangement since and always payments are met each month. Now with the merger i have received letters from Santander and today received a default notice from them for the loan. Can i receive two default notices for the same loan - it hasn't been sold they just mergered into one and i haven't missed any payments or been late with the arrangement thats in place that has worked well for last few years. Any advice on this would be great. Thanks.

[StoneLaughter]

Re: Issuing Defaults

I'm no expert but in my opinion they'll have a seriously difficult job making a Default Notice enforceable in the Courts if you're meeting the payment agreement off the back of another default notice! I think they're just trying to "clear their books" as it were and bully you into paying it off. I would write to them and challenge the second Default Notice and say that all payments have been met and that they therefore have no grounds on which to serve the notice; this will at least delay things if nothing else.

[saucepan]

Re: Issuing Defaults

Hi thanks for that i didnt think they could issue another. When they sent a letter saying they were going to issue if i didnt clear in full i wrote and challenged them about it then but never received any response. My main concern is that the default issued in 2004 is due to come off my credit reference this year but now i am stuck with another for another 6 years.

[StoneLaughter]

Re: Issuing Defaults

I don't think the 2004 Default Notice will come off your record until it's been SATISFIED for 6 years.

[Kafka]

Re: Issuing Defaults

I don't think the 2004 Default Notice will come off your record until it's been SATISFIED for 6 years.

A default stays for 6 years from entry, not settlement.

Defaulting is a formal process that terminates an agreement whereby the whole balance becomes payable. You can't default the account again - its a one-shot deal. They cannot file a second default for the same account even if you had not upkept payments.

Wrongful default also gives rise to grounds for a damages claim. Write and tell them to remove the second default immediately or you will take all necessary action to get it removed, through the courts if necessary. You will also consider issung a claim for damages for wrongful default.

[Curlyben]

Re: Issuing Defaults

I must disagree here as a default doesn't always mean an agreement is terminated.
If the breach is rectified then the default is satisfied and nothing is recorded.
Also if repayment arrangements are made then termination of the agreement doesn't go ahead.
Admittedly a default is PART of the termination process, but not the entirety.

So in theory you can be served a default notices on more than one occasion, but as long as the breach is remedied then it is not recorded.

[saucepan]

Re: Issuing Defaults

Hi! Thanks for that Curlyben. Just so i have this straight are you saying that although i havent broken the payment arrangement that i had with Alliance and Leicester that now they are Santander they have correctly issued this default. I believe the original default in 2004 was recorded as the breach wasnt rectified but a payment plan put in place.

[Kafka]

Re: Issuing Defaults

I must disagree here as a default doesn't always mean an agreement is terminated.
If the breach is rectified then the default is satisfied and nothing is recorded.
Also if repayment arrangements are made then termination of the agreement doesn't go ahead.
Admittedly a default is PART of the termination process, but not the entirety.

So in theory you can be served a default notices on more than one occasion, but as long as the breach is remedied then it is not recorded.

Yes I agree.

But surely if the breach is rectified within the timeframe of the Default Notice, then the account does not formally default (it was a temporary defaulting period) and so there is nothing to register, as we are discussing here. For the default to be registered with CRAs the breach should have been left unsatisfied at the end of the DN period, in which case the account has terminated (as it was signed up for).

The owner does not have to sell the account and can make another repayment arrangement, but that will be quite different from the original one. I have one of these with LTSB, but haven't paid anything for years because they have failed to provide me with ANY documentation for the account after numberous SAR and CPR requests to them and various DCAs.

[Curlyben]

Re: Issuing Defaults

Yes I agree.

But surely if the breach is rectified within the timeframe of the Default Notice, then the account does not formally default (it was a temporary defaulting period) and so there is nothing to register, as we are discussing here. For the default to be registered with CRAs the breach should have been left unsatisfied at the end of the DN period, in which case the account has terminated (as it was signed up for).

Yes and no.
Bear in mind if the sum to rectify the breach is not paid then the default stands, BUT they may not terminate the agreement, especially if a payment plan is in place. The wording of DN's is very precise and termination is an option, but not a definite action.

The owner does not have to sell the account and can make another repayment arrangement, but that will be quite different from the original one. I have one of these with LTSB, but haven't paid anything for years because they have failed to provide me with ANY documentation for the account after numberous SAR and CPR requests to them and various DCAs.

Sounds about right.
I have found that OC wash their hands of these accounts once they "sell" them to DCA's. As we know they tend NOT to provide the DCA's all the information to satisfy our own lawful requests.

[StoneLaughter]

Re: Issuing Defaults

So the question remains: if there is no breach of the payment arrangement, do they have grounds for issuing a default at all, and without grounds do they still have a right to issue the default? Also, are Santander bound by the repayment arrangement made with Alliance and Leicester (who are now wholly owned by, but not rebranded as, Santander)?

[Curlyben]

Re: Issuing Defaults

IF the payments being made are the same as the contractual ones then a DN cannot be issued as there is NO default, BUT they can issue on a payment arrangement as, technically, the original agreement has been defaulted.

Now this all gets a little mess when ownership of the debt changes, as it this case.

It does appear that Santandar have been attempting to clear out their books of "problem" debts. Under the terms of the agreement they are entitled to do.

Confused ?

[saucepan]

Re: Issuing Defaults

lol yer sorry i am - where do i stand?? It is a payment plan not the contractual payments and default notice was already issued by A & L in Sept 03 and so has now been removed from CRA as over 6 yrs, but i do have report showing it there.

[saucepan]

Re: Issuing Defaults

Can anyone please advise?

[Kafka]

Re: Issuing Defaults

Can you clarify please? You had a default registered on the account that has fallem off after 6 years. Now you have another default showing for the same account.
Is this what you are saying?

[saucepan]

Re: Issuing Defaults

Hi! Yes in Sept 03 Alliance and Leicester registered the loan with the credit reference agencies as in default, as i had got behind with payments, but a payment arrangement was set up and over the years has been periodically reviewed and payments increased etc. Now that Abbey and Alliance & Leicester etc have all merged into one to become santander, although payments have been met under this payment arrangement they have issued another default on the account. The original one from Sept 03 is no longer on the cra as it is now over 6 years old, but i do have copies of the cra report with it on to show it did exist. So yes i have two defaults for the same loan, which hasnt been sold on they just merged into one group so i believe and i havent missed any payments on the payment arrangement.