Stage 2: Missing three or four payments to a debt
Your creditors may be putting more pressure on you by now, and you may find the tone of their letters or calls becomes firmer. They may start to threaten further action. You’ll probably find many creditors are still keen to point you towards a free debt advice agency for help. If you’ve not already had advice, get in touch with us.
If your account is regulated by the Consumer Credit Act, you can probably expect a default notice soon, and shortly after that your account will default. This will have a big impact on your credit file and make it a lot harder to get further credit.
You’re probably getting to a point now where your accounts will be closed and further action is starting. Your creditors are likely to pass your debts to collection agencies too, so you may start getting contact from new companies.
Stage 3: Missing five or six payments to a debt
By now you’ll have had a lot of letters, phone calls and other contact from creditors.
Any regulated debts you have, such as credit or store cards, personal loans, payday loans, hire purchase, catalogues or overdrafts, are likely to have defaulted by now. These creditors may have taken some further action by this stage
The most common action after an account has defaulted is for a creditor to pass it to a specialist debt collection agency. This has probably happened by now.
Other more serious action could have happened, or could be coming soon. For example, if you live in England or Wales, some creditors may be considering taking your debt to court and applying for a CCJ (County Court judgment).
Your credit file will be seriously affected by now, but that shouldn’t be your main priority. If things have got to this stage, it’s important to get advice and start sorting out your debts. It’s never too late to contact us to start getting your finances back in order.