A default notice is a formal letter, sent by a creditor, telling you how much you need to pay to bring your account up to date.
Your creditor will usually send you a default notice when you’ve missed 3 to 6 payments. You’ll be given at least 14 days to pay the amount stated on the notice.
A default notice will tell you that if you can’t pay, your account will be cancelled and ‘defaulted’. This means you won’t be able to use the facility to borrow money. The creditor can then:
- Demand the full balance is paid immediately
- Sell the debt to a debt collection agency
- Begin court action to recover the debt
- If the agreement is hire purchase, start proceedings to take the goods back
The creditor can only carry out these actions after the account has defaulted. If you pay back the amount stated within 14 days, no further action will be taken. If you miss payments in the future a default notice can be issued again.
A default notice is only required for debts that are regulated by the Consumer Credit Act.
When you get a default notice you’ll also get an advice sheet from the Office of Fair Trading with contact details of organisations that can help you if you’re struggling to repay debts, including ours.
Free help and advice
If you’re struggling to meet the payments to your creditors, or you’ve received a default notice, we can provide debt help you need.
We’ll create a personalised budget and give you tailored advice on how to deal with your creditors and get your situation back on track. All you need to do is use our online Debt Remedy tool or call our free Helpline on 0800 138 1111.