Default notice help

[DebtHelp101]

Hi all,

I've got just under twenty grand worth of debt. One very large loan and a few thousand on a credit card. I had been paying them off fine until I fell into bad health last year, and had to have some help. I set up a DMP with StepChange, and that was all fine.

Anyway, since then, I have had to leave work completely so again, couldn't make the monthly repayments. I did my yearly review with StepChange, and my monthly payment lowered again. This was two months ago. I have now been sent a Default Notice about my loan.

We have been away house sitting for the last few weeks, so the letter came on 7th July and I only opened it today. It says I need to pay £1600 (roughly) by 28th July. There is no way, no way, I can do this. What do I do?!

What is a Default Notice? Should I be accepting that I need to go bankrupt? Will I lose my car if I do so? Please help! I'm so upset.

A default notice is nothing to worry about and is to be expected when you're on a DMP.

The creditor is giving you the opportunity to bring the account up to date, but (as you're on the DMP) is already aware that you can't afford to do that.

If you don't clear the arrears, they'll default the account, which basically means cancelling your agreement with them. It'll be recorded on your credit file for 6 years which will make it difficult to get further credit in the future.

If you can't afford to bring the account up to date and the creditor is aware of your circumstances, you don't need to take any action.