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Received a Default Notice?

I have received a default notice - what should I do?

It is not notice of any legal action so don't panic! A default notice is simply a form issued to you by the creditor telling you that you are in default of your credit agreement - in other words, that you are not up-to-date with your repayments.

However, if you receive a default notice, do not ignore it. While it is no reason to panic, a default notice is a warning that you may have a financial problem.

Creditors may use a default notice as the first step towards legal action against you. (When the credit agreement is one regulated by the Consumer Credit Act 1974, the default notice must be issued before legal action begins.)

If you have simply missed a couple of payments and are now in a position to increase your repayments to catch up on your arrears, contact the lender within seven days of receiving the letter. Calculate how much you can afford to pay towards the arrears and make an offer of repayment. Put this in writing and keep a copy for yourself. If your offer is rejected, make the payment anyway as it shows that you are willing to sort out the problem. Get advice from your local Citizens Advice Bureau - provides details on how to get in touch with a CAB.

If you cannot afford to comply with the agreement and pay the arrears do not ignore the situation! If you have other debts and find that you simply cannot keep up the necessary repayments to your creditors, it is time to act. Many organisations offer free debt advice and are able to negotiate with your creditors to come to a mutually acceptable repayment scheme. This will help you deal with the debt for which you have received a default notice and may stop any enforcement action.

The following organisations provide free debt advice:

Payplan - The Free Debt Advice Agency
Freephone 0800 917 7823

Citizens Advice Bureaux -

National Debtline - 0808 808 4000

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