Debt Default Notice issued by Creditor

Debt Default Notice issued by Creditor is to notify that the payment is not up-to-date and need to bring the account up to date with payment within 14 days

A default notice is basically a form issued by the creditor notifying that you are not up-to-date with your repayments as per your credit agreement. The credit agreement is regulated by the Consumer Credit Act 2006.

Consumer Credit Act 1974 has been updated to bring two further types of agreement. Consumer agreements above £25,000, to reflect growing levels of consumer borrowing and the small, one-man businesses and partnerships of up to three people have now been included in the act. The Act also gives you the option of using the Financial Ombudsman Service should you have complaint against your lender.

The 2006 Act also give powers to the Office of Fair Trading (OFT) to investigate applicants for consumer credit licences, to impose conditions on licences, and to impose civil penalties of up to £50,000 on companies which fail to comply with its conditions, appeals from which lie to the Consumer Credit Appeals Tribunal and thence, with leave, to the Court of Appeal.

The Default Notice is the initial step towards legal action and also serves you as a warning that you may have a financial difficulty. Once a default notice is issued, legal action can commence. However contact your creditor in writing within seven days of receiving the default notice to avoid legal action provided you can afford to clear the arrears.

The following information should be provided on the default notice:

• Name and address of your creditor issuing default notice.

• Your name and address. Make sure that the details are correct.

• The type of agreement.

• Full details showing the breach of the agreement.

• Settlement figure (for fixed sum only).

• Action required by you to deal with the situation and conform to the agreement

• What course of next action the creditor will take should you fail to comply with the agreement.

Show them how much you can afford to pay and how quickly you can bring the account up to date. Default notices stays on your file for six years. During this time it can be hard to get credit. Once you are in this situation it can impact on other areas of your life and therefore it is vital to deal with it immediately. If your offer is rejected, make the payment anyway as it shows that you are willing to sort out the problem.

If you are in financial difficulties and have delayed in making regular contractual monthly payment on time, a Default Notice can be placed on your file by your creditors without your knowledge and despite solving the default. It is wise to check your credit files.

Under the credit agreement the lender has the right to inform the credit agencies of any default. You cannot have a default notice removed without the consent of the relevant lender. Check if the creditor is willing to help to remove the notice if incorrectly served.

The payments have now been brought up to date

The loan has now been fully repaid

Repayment schedule has been agreed

Agreed a revised repayment schedule

The default notice has been placed on your file incorrectly

The account has been terminated and written off as a bad debt

In any of the above cases you should write and ask if they are prepared to remove the notice from your file and put this in writing to you.

You may be charged administration fee for this.

Once they have written and agreed that you no longer owe them any money the credit reference agencies will then be able to remove the default from your file.

The information provided is believed to be reliable, but is not warranted to be accurate or complete and is for general purpose only. You must get professional help before taking further action. The information is provided in good faith, but without legal responsibility. is not authorised to give advice under the Financial Services and Markets Act 2000. The general information and material provided and published on this website is for interest, understanding and for common knowledge purpose only. The details provided should not be taken as any kind of advice and cannot and should not be used to solve any kind of financial problems. You must take proper advice from authorised firm or financial advisor. We do not recommend or endorse any kind investment, advisor, product or services. We do not offer or imply any kind of advice, financial or legal. It is your responsibility to take appropriate action suitable to your needs.