Default Notice
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All credit applications (Eg personal loans, credit cards or store cards) opened in the United Kingdom are regulated by the Consumer Credit Act 2006. This piece of legislation requires that creditors must issue a Default Notice to any customer who has fallen behind with payments to their account, before legal action can be pursued to recover the monies owed.
[edit] Information Required On A Default Notice
The following information is required on a default notice:
* Name and addresses of both the creditor and the borrower. * Agreement type and the agreement breach details. * Settlement figure (Fixed sums only). * The action required by the borrower to remedy the situation and comply with the agreement. * Intended action of the creditor should the borrower fail to comply with the agreement.[1]
[edit] Will Legal Action Be Taken?
The borrower has 7 days from the issue of the Default Notice to comply, before which a creditor cannot take the borrower to court. If the borrower does not comply, it does not mean that a creditor will take the borrower to court. Often, communication by the borrower with the creditor to find a mutually acceptable repayment amount will avoid further action being levied on the borrower. However, borrowers with serious debt problems, may find that this is unworkable, as different creditors to which money is owed all ask for unrealistic amounts. In a situation like this, the borrower should seek professional free debt advice to enable them to negotiate with their creditors and establish a realistic and regular repayment plan. Free Debt advice is available from the organisations below, who also set up Free Debt Management Plans.
