Are You About to Default?

Getting a default notice in the post that threatens legal action against you is worrying enough, but if you feel you have nowhere to turn to it is even worse. Here at Shoppersbase, we have some information that can help you. The first thing is not to ignore the notice and to remember that the people that sent it to you want to help you settle the debt without having to resort to court action. Going to court is costly and if they can avoid that then they will. It is always therefore in your best interests to get in touch as soon as you receive the notice, however daunting you feel it may be. Make sure it is in fact a default notice and not a letter designed to look official as some companies use this trick to get you to hand over money you cannot afford quickly by worrying you unnecessarily. So read the default notice carefully as it will tell you what you need to do, and what could happen if you do not respond. Typically the default notice will have the following information on it:

  • The type of agreement that was in place
  • The agreement terms that have been broken
  • What you now need do to put the account in order (i.e. how much you need to pay and by when)
  • What the lender will do if you don’t comply with the request
  • How long you have to respond (this is normally a minimum of 14 days)

If you do not understand it you are within your rights to approach the lender and ask them for further information and you can always contact a debt adviser. What rights and options you have will typically depend on what type of agreement you entered into with the lender so it is prudent to find the original documents from when you first took out the agreement, as the law can be complex. Be advised that if you keep your head in the sand and ignore the default notice, this then gives the lender the opportunity to take action against you. They can demand payment of what money you owe, or they can repossess goods on hire-purchase. More seriously, if the debt is secured against your home, you could lose your home. And of course the default will then stay on your credit filefor six years, which will make it even more difficult to get credit in the future.

If you feel that it is too much for you to handle yourself, you can always get a debt adviser who may be able to negotiate on your behalf. The good thing about them is that they can suggest different ways to deal with the problem that you might not even know about. For example, there are new laws and agreements now regarding fuel debts such as gas and electricity. Customers who are deemed to be in fuel povertycan have a new tariff or even have their debts wiped clean away, with a little help from an outside party. You can even ask a court for more time to repay a debt, but it is best to try and sort out your debt before it gets to the court stages. Any correspondence that you enter into with your lending company or the company who has sent you the default notice should be kept and copied in case these are needed at a later date. There are a lot of non profit organisations that will give you sound advice for free, which is totally confidential and more importantly – impartial without prejudice. We have listed them below:

Citizens Advice

Their local address will be in your phone book or for England & Wales go to www.adviceguide.org.uk for Scotland go to www.cas.org.uk

for Northern Ireland go to www.citizensadvice.co.uk

National Debtline 0808 808 4000 or visit www.nationaldebtline.co.uk

If you live in Northern Ireland call Advice4Debt on 0800 917 4607 or visit www.advice4debtNI.com

If you live in Scotland call 0141 572 0237 or visit www.moneyadvicescotland.org.uk

For debt advice throughout the UK phone 0800 138 1111 or visit www.cccs.co.uk

Money Advice Service www.moneyadviceservice.org.uk or phone 0300 500 5000 to speak to a Money Adviser.

Community Legal Advice – You may qualify for legal aid phone call 0845 345 4 345 for free advice or visit www.communitylegaladvice.org.uk

Financial Ombudsman Service – If you have a complaint that you can’t resolve with your lender, the Financial Ombudsman Service may be able to help – call 0845 080 1800 or visit www.financial-ombudsman.org.uk

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