Default notices

A default notice is a formal letter telling you how much to pay to bring the account up to date and when you need to pay.

Your creditor will usually send you a default notice after three to six missed payments. You are given at least fourteen days to pay.

A default notice will also warn you that if you cannot pay your account will be cancelled and be ‘defaulted’. This means you can no longer use this facility to borrow money. The creditor can then:

Demand the full balance is paid immediately
Sell the debt to a collection agency
Begin court action to recover the debt
If the agreement is hire purchase, start proceedings to repossess the goods

The creditor can only carry out these actions after the account has defaulted. If you pay back the arrears amount stated within fourteen days, no further action is taken. If future payments are missed a default notice can be issued again.

A default notice is only required for debts regulated by the Consumer Credit Act.

Accompanying the default notice will be an advice sheet from the Office of Fair Trading with contact details of organisations who can help, including ours.

If you are struggling to meet the payments to your creditors, or if you have received a default notice, we strongly recommend you use our online debt counselling service or call our free Helpline on 0800 138 1111.

FAQs

How do I recognise a default notice?

England and Wales > Creditor action > Court action

A default notice will clearly state at the top of “This is a default notice served under section 87(1) of the Consumer Credit Act”.

There are several other important points that must be listed:

The type of credit agreement
The terms of the agreement which have been broken
The action that is required to prevent the account from defaulting, this is usually to pay off all arrears by a certain date
What action the creditor intends to take if this is not done. For instance, pass the debt to a collection agency or proceed with court action

Do I need to contact a solicitor or trading standards if I receive a default notice?

England and Wales > Creditor action > Court action

We recommend you seek advice from us if you have trouble paying your debts, and you should not ignore a default notice. It is unlikely you will need to contact a solicitor or trading standards.

How can I check my credit file?

England and Wales > Creditor action > Credit reference agencies

It can be useful to know what is on your credit file, especially if you have been refused credit or you think you have old debts you may have forgotten.

You can get copies of your records with Experian, Equifax and Call Credit for £2 each. Details of how to apply are on their websites.

All three credit reference agencies offer online subscription services, usually with a free trial period.

To check the information held about you by National Hunter Ltd and CIFAS , you will need to pay £10 each. Again, details of how to apply are on their websites