Whether by accident or design, missing payments on debts can be a serious matter. If it's by accident, we may well be able to set up a plan to make our payments automatically by standing order or direct debits through our bank. The payments are automatically made and we can relax. But often the payments are not missed by accident - we just don't have the necessary funds.
Informing our creditors
Best practise is to let our creditors know of the missed payment as soon as possible. Of course - they may beat us to it by informing us first! If it's not common practise for us to miss payments, they may well be understanding and helpful. However they do want their debt repaid.
A default notice is a formal letter sent to you by a lender or creditor if you are in arrears with your account. Creditors and lenders are legally obliged to advise you formally in writing that you have missed payments. If the payments are in arrears the creditor must issue a default notice before any legal action or intervention can take place. As with all debt problems, it's vital to act quickly and to seek professional advice. A default notice is a warning and as such should be taken very seriously.
The default notice will give you 7 days to comply with the action required. This doesn't necessarily mean that you will be taken to court - and if you comply promptly with the instructions, the issue should be resolved swiftly and the creditor won't take any further action
County Court Judgements
After sending a default notice, the lender can start the process to recover the money by issuing a claim form. If you receive a claim form, you will know that your creditor has started proceedings in the county court. This claim form will make it clear who is taking you to court, the amount of arrears and proposed action.
If our debt is just one creditor, it may well be possible to come to an arrangement with them directly. However often we face debts and action from a number of creditors and it becomes increasingly difficult to keep everyone happy. This is likely to be the time (if not before) when we seek expert advice on the options open to us. Creditors may well stop further action once a reasonable plan is put before them.