Default Notice

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What is a default notice?

A Default notice is simply a record placed on your file by creditors stating that you have been in default in some way. Such notices may have been placed without your knowledge and despite a subsequent remedy to the default.

Under the terms of your credit agreement you will probably have agreed that the lender has the right to inform the credit agencies of any default.

If you need to check your credit files check out Repair Your Credit History for the standard letters to send to the major credit reference agencies.

Unlike the procedures for the Removal of CCJs you cannot have a default notice removed without the consent of the relevant creditor/lending institution.

In this section you will find all the procedures and correspondence to help you arrange the removal of the notice.

The willingness of the lending institution will depend on whether any of the following situations apply to you:

The default notice was served but payments have now been brought up-to- date

The loan has now been fully repaid

Payments are still in default but a repayment schedule has been agreed or you wish to agree a revised repayment schedule

You disagree with the default notice, and it has been placed on your file incorrectly

You may have unknowingly fallen behind on a Mail Order company account. Most Mail Order companies do not send out reminders and may have terminated the account as a bad debt

See: What is a Default Notice? and Remove a Default Notice

A creditor is required to send a default notice to the debtor by law, prior to commencement of legal proceedings to secure the remaining balance outstanding.

Why would I have received a default notice?

Missed or late payments on credit accounts

Failure to adhere to an agreed repayment plan

Ignoring a lender chasing an outstanding debt

If a lender issues a default notice against you, they should also by law update your credit file which is available for other lenders to see when you make applications for further credit.

Once a default notice is registered on your credit file it would usually remain there for a period of 6 years.

What should I do if I receive a default notice?

If you receive a default notice, make sure your lender has sent you a notice of sums in arrears first. If they haven't, the default notice may not be valid. Talk to a money adviser if you're in this position – they should be able to help you sort this out with your lender.

If you receive a default notice and have already received a notice of arrears, you have several options open to you. You can:

clear your arrears within the time limit, in which case no further action will be taken

contact your lender to try to make a repayment arrangement

get advice from us regarding your debts

apply for a time order.

What infomation is held on a default notice?

A default notice will contain specific information about the breached agreement, such as:

The creditors contact details i.e. name and address.

The debtor’s contact details i.e. name and address.

Details of the agreement.

Details of how the agreement was breached.

Details of an early settlement figure when the debt’s a fixed sum.

Details of how you can repair the breach.

Details of what legal action the creditor intends to take if you do not remedy the breach.

Do I have to go to court because of a default notice?

After sending a default notice, the lender can start the process to recover the money by issuing a claim form. If you receive a claim form, you will know that your creditor has started proceedings in the county court. This claim form will make it clear who is taking you to court, the amount of arrears and proposed action.

To avoid court action, it is advisable to contact the lender to establish a mutually acceptable agreement. Court action will result in the registering of a County Court Judgment against you and the issuing of an Order by the court that the debt is repaid either immediately or by instalments. So long as the debt is for less than £25,000 you will be able to apply to the Court for a Time Order to give you more time to repay the debt

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Don’t worry of you have a bad credit rating, Default Notices or County Court Judgements (CCJ) we can help anyone in any financial situation.

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