A default notice is a formal letter issued on behalf of a creditor to a borrower.
A default notice declares that predetermined payments have not been paid and are now in arrears.
A default notice sets out the amount in arrears and gives a deadline to continue repayments.
A default notice is usually issued when repayments are in arrears by 3 to 6 months as creditors and lenders are legally obliged to inform you if you fall into arrears on an agreement.
A default notice will stay on a credit record for 6 years from the date of issue and it will be difficult to obtain further credit once the default is listed on your credit file.
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.
A creditor must issue a default notice when an agreement falls into arrears before legal proceedings can begin.
A default notice should not be taken lightly, as it is a warning from a creditor that an agreement has been breached and they intend to take legal action to recover the debt if you do not comply with their request for payment.
On receipt of the default notice you will have up to 7 days to repair the breach by taking the actions that are outlined in the default notice. Once the necessary action has been taken to resolve the breach, by making a full payment of the amount demanded, it is likely the creditor will not take further action, and a visit to court can be avoided.
If you are unable to meet the demand laid out in the default notice, you should seek advice from a professional debt adviser.
If you receive a default notice, and you have other debts also, you should try to reach an agreement that takes care of all your debts and not just the defaulted one, and again you should take advice from a professional debt adviser immediately.
My IVA Adviser will assist with all aspects of default notice problems and questions.
Call 0800 088 7503 Now.
Related Articles: