A typical payment arrangement is an agreement to repay a credit card, catalogue or loan in affordable monthly amounts. This is also called an arrangement to pay.
You can ask a lender for an arrangement to pay, or a debt collector.
The key points are:
- an arrangement is needed if you can’t afford the normal debt repayments;
- do not offer more than you can afford;
- ask the lender or debt collector to freeze interest and not add any charges;
- it normally harms your credit record.
This article looks at making an arrangement to pay, including how to do this, how much to offer and what if the creditor says No.
Contents
Is a payment arrangement right for you?
The advantages of a payment arrangement
- a payment arrangement for a few months gives you time until your income or expenses improve so you can resume normal payments. This means it is normally your best option if you know you have a temporary problem. Perhaps you have been made redundant and need time to find another job.
- for longer-term problems, a payment arrangement where interest is frozen lets you clear the debt more rapidly and in a more affordable way;
- you can increase or decrease what you pay if your situation changes;
- most creditors will accept a payment arrangement and agree to freeze interest if you explain your circumstances but some will refuse if you are continuing to pay other creditors the normal,amount;
- having a payment arrangement means you normally get few letters or phone calls from a creditor; and
- it is less likely a creditor will take you to court for a CCJ than if you ignore a debt.
Some disadvantages of a payment arrangement
- a lender may reject your offer or refuse to freeze interest (see below);
- it may take a long time to repay your debts, even if interest is frozen. In this situation, it is better to take debt advice now than to spend years not making much progress.
- a creditor may take you to court for a CCJ even if a payment arrangement is agreed. This is unusual – it is more likely for larger debts, for business debts, and if you are buying not renting as the creditor can then get a charging order on your home;
- you have to deal with your creditors – some people don’t mind this, others prefer to get some help (see below);
- arrangements will often be for a short time such as 6 months. This is a nuisance, but if at the end of it you explain your situation is the same, the arrangement can be renewed;
- your credit rating will be affected (see below).
Debts this doesn’t cover
The arrangements discussed here are for “normal” loans, credit cards and catalogues.
Where a lender has some extra security, they will normally refuse to accept a lower amount and freeze interest:
- mortgages and other loans secured on your house;
- guarantor loans or logbook loans; and
- car finance eg HP, PCP, leasing.
If you have problems with any of these, talk to a debt adviser about your options.
Bills such as tax, rent, council tax and utilities are different, see What is a priority debt? for a list of these. Here setting up an arrangement to pay is a very good idea, but you may need to pay more to get the creditor to accept your offer. You have to negotiate these priority debt arrangments first, and your credit cards and loans may then have to accept a token £1 a month payments until your priority debts are cleared.
What about overdrafts? An overdraft on an account you aren’t using any more is just like any other bank debt and you can ask for an arrangement to pay that. Or if the overdraft has been passed or sold to a debt collector.
But if you are still using the account though, you need to talk to the bank about what they can suggest – and if it doesn’t seem helpful, think about switching to another bank. Overdrafts can be very tricky to clear.
How much should you offer?
National Debtline’s Your budget takes you through setting up a personal budget, converts your income and expenses so they are all monthly, works out what offers you should make to your creditors and generates a budget sheet to send to your creditors.
The offer to a creditor depends on how much money you have left after paying for essential expenditure and paying priority debts. This is divided between your credit card and loans, so that the larger debts get more of the money. This is called a pro rata division and your creditors will think this is fair. They will also understand that priority debts will get more.
If you have little money left, the budget tool will suggest:
You could offer a token payment of £1 per month to each of your creditors. This may only be a short-term solution but it can give you some time to work out your other options.
Your budget has to be realistic for many months, so don’t put in really low expenses that you won’t be able to live on. If you aren’t sure, phone National Debtline and talk to them about what figures are reasonable. Make sure you save your budget, in case you want to change/add something later and create a new budget sheet.
Phone or write?
If you want to phone, it’s best to have worked out a rough budget beforehand and decided how much to offer each creditor. A creditor will often want to talk through your budget with you. Having one in front of you will mean you are more confident and less likely to agree to pay more than you can afford.
Also work out a short description of the reason you have problems to tell the creditor. “My hours have been cut” or “My wife has gone on maternity leave” or “I am behind with council tax and my electricity bill and need to clear these arrears” – just say what has happened, you won’t be judged.
If you prefer to write, you can send a letter but email is faster, cheaper and you have a record of what you have sent. Enclose a budget sheet – this shows the lender that you are making a fair offer.
National Debtline has useful template letters you can use. Here the most important ones are:
- making a pro rata offer to creditors
- making a token offer to creditors.
What if the creditor doesn’t agree?
You can’t make a creditor accept, but if you have sent the creditor a budget sheet and you are making pro rata offers to all your creditors, they normally do. So don’t worry about this problem until it happens, as it may not!
In practice, you often don’t have any better options. If you can’t afford to make the normal repayments – which your budget shows – then don’t get into more difficulty by paying more than you can afford. So make it clear that you are not going to increase your offer.
Sometimes a creditor will refuse to make a payment arrangement if you are up to date with the debt. This is annoying when you are trying to do your best but the answer is simple – miss a payment. Cancel any direct debit, standing order or continuous payment authority with your bank and contact the creditors again in a month.
Sometimes a creditor will refuse a payment if they think it’s more than you can afford. If this happens, talk to a debt adviser about your other options.
What is the difference between a payment arrangement and a Debt Management Plan (DMP)?
Not much!
In a DMP, you go to a firm such as StepChange and ask them to set up the payment arrangements with your creditors, and you then just pay the DMP firm one amount monthly which they divide between your creditors. See A guide to DMPs for more details.
The end result for you – and for your creditors – is much the same. Some people like a DMP firm sitting in the middle and organising it as they don’t have to deal directly with their creditors. The more creditors yiu have, the more helpful a DMP is.
Some people prefer to do things themselves. If you have a lot of creditors it can be easier to get a DMP set up, but if there are only a couple it’s not that much hassle to set up payment arrangements.
Creditors are not allowed to refuse to set up a payment arrangement with you and say you have to have a DMP. And they can’t refuse to freeze interest if you are trying to make a payment arrangement and say they only do that for a DMP.
A payment arrangement has the same effect on your credit record as a debt management plan. See how DMPs affect your credit record for details.
Would a Breathing Space help?
The Breathing Space facility was brought in in 2021. It puts a 60 day hold on your eligible debts, during which time the creditors can’t add interest or charges, take you to court or send round bailiffs.
But unless 60 days will really let you solve your debt problem, you will still need a payment arrangement or another debt solution after that. And the Breathing Space is inflexible – all your debts have to be listed.
Many people who want to set up payment arrangements themselves may prefer to decide which creditors to talk to and possibly ignore creditors who aren’t a problem at the moment.
Need some help with this?
If this is the first time you can’t make a debt repayment, or you haven’t paid anything for a long while, you may be worried.
It normally won’t be as bad as you think!
Creditors are used to this, it is part of their business that some people can’t manage to repay on time and their regulator says they have to treat customers in financial difficulty fairly.
But if it makes you feel very anxious, or you have many creditors it feels difficult and confusing to speak to them all, or you aren’t sure if an arrangement to pay is right for you, or a creditor refuses to accept your offer, then talk to a good debt adviser for free and confidential help.
If you think you can only afford token £1 payments and you don’t this will change for years, then you should take debt advice as there may be better options for you. £1 a month may sound good, but it’s only postponing the problem, not solving it. If you are renting then a Debt Relief Order may be a much better option.
Complain if a creditor doesn’t freeze interest
Are you worried about debt management?
How to ask for refunds for all types of debt
Jane Clack says
Hello. I was discussing this the other day with a credit union representative – only a small debt continued cycle of payday loans. Same lender! Client has ample funds to pay and knows this but has been paying £150 per night out twice a week in the past. Credit union person said would be far better to take out a credit union loan and consolidate all other debts – not many but a loan with his reputable bank and a credit card he pays off in full as only ever about £50 on it. So we can say consolidation is a way of clearing debt when affordable but not when having to change banks in my opinion. What do you think?
Sara (Debt Camel) says
I’m confused.
“paying £150 per night out twice a week” to a payday lender, that’s a bit odd? If this is a continued cycle of loans from the same lender, then an arrangement to pay plus an affordability complaint would seem the best option.
I can’t see the point in consolidating a credit card which is repaid in full.
Not sure what the relevance of changing banks is – apart from being able to include an overdraft in an arrangement to pay? (Hang on, I forgot to mention overdrafts in the above article, will just go and add a bit…)
Jane Clack says
No the reason he has not got enough money at the end of the month is that he is spending £150 on nights out twice a week. Young chap enjoying life! He borrows £700 from this payday lender and has to pay back £844 at the end of the month! He also smokes as he has a lot of spare time on his hands! It was well affordable and if he did not go out and cut down on the smoking he could pay it back but just does not want to have to budget. I cannot see how we could go for affordability with this one. My suggestion was he should repay in 2 instalments and only go out once a week!
He likes his bank and is repaying a loan which he has with them – it will finish in 14 months and the credit card is with the same bank. The credit union adviser said he should put the loan into the consolidation with them and pay it off earlier! He has no overdraft with them!
Sara (Debt Camel) says
ah!
Well you know having time on their hands isn’t the only reason people smoke…
Then consolidating the payday loan and the bank loan may be sensible – but I can’t see why he would include the credit card.
Laura says
Hello Sara,
I’ve recently been made redundant and contacted littlewoods as I can’t afford the full repayments at the moment. I’ve offered to pay £50 a month until I can hopefully get a job after Xmas but they have said this isn’t acceptable and I should seek third party advice. I don’t have any other debts that I can’t meet so what should I do now? Any advice
Sara (Debt Camel) says
Are they saying £50 a month isn’t enough? Or are they saying you can’t afford to pay £50 a month?
What sort of other debts do you have?
Laura says
Thank you Sara, wAsnt sure where to post.
They didn’t say. I’m actually deaf and trying to sort this through there secure webmail has bordered on shambolic and now it’s offline saying they can’t tale any more messages. Been trying to sort this for 6 weeks.
They didn’t say. I can afford £50 although we are now living off one wage. We have mortgage, car loan and one bank loan which I feel are more a priority. I have never been out of work before so I don’t want to say £100 and then I can’t make that as I don’t know how long this is be, but I can afford £50 and said I would pay more if I could which I would do. I’ve written a paper letter because it’s starting to really stress me out, interest getting added etc when I’ve said the situation claiming not getting these secure messages?!
Sara (Debt Camel) says
I hope your letter explained you are deaf so you can’t use the phone?
re priorities. A debt adviser will say that your mortgage is top priority and next is the car loan if it is HP/PCP or leasing, as you could lose the car if you don’t keep up the payments.
A normal unsecured bank loan however is not a priority debts. Whose name is the bank loan in? And whose name is the catalogue in?
Laura says
Yes I’ve made it clear to them I’m deaf and sent my certificate because they must think I’m lying as they still try and call me etc. The bank loan is in both our names but the catalogue is in mine, I don’t know why but would prefer just to pay the bank loan until I’m back in employment. I’m looking at the website and I think I could gave had unaffordable lending. My credit limit on catalogue was almost 6k and I worked part time and was raising my son. Kept increasing. Quick other question the interest free period is coming to a end on a item is there anything I ca do about that given the situation?
Sara (Debt Camel) says
I’m sorry but Littlewoods are within their rights to say that they won’t accept a lower payment from you and freeze interest if you are making a full payment to the bank loan – this is not treating your creditors fairly.
A 6k credit limit is high but you may find it hard to win an affordability complaint if your credit record is good.
The interest free period coming to an end – when it ends if you haven’t paid the whol amount you will be charged interest. this will probably be backdated to when you bought the item.
Milky says
I got into debt with the water to the tune of £1000 in 2010 began repaying them back. In 2017 they registered this as a payment arrangement on my credit file. I only discovered this when making a mortgage application. I asked when my mom was dying to reduce the payments to be able to help her and visit and also to save for a mortgage the irony. I was not informed it would affect my credit when I spoke to them about it over the phone. Is this treating customers fairly when they are most vulnerable by omitting it. I am sure they would say it’s in our terms or on our bill but shouldn’t they say when take your card details to set it up?
What if anything can be done
Sara (Debt Camel) says
Did you tell them you wanted to be able to reduce your payments in order to save for a mortgage?
Milky says
No -I did not tell them
Their data officer is contacting within 5 days
It was a while ago can’t remember what I said, I was not in financial difficulty on both occasions just difficult circumstances and wanted all the money possible to help my parent and the other was just pay minimum on everything and then use rest of income to clear a debt at a time.
Sara (Debt Camel) says
OK well tell the data officer that if he listens to your call recording, he will hear that you were never informed that your credit record would be affected and this seems unreasonable as you had had a payment arrangement for years and your credit record had not been impaired.
Milky says
Thank you I have spoke to the data officer and he immediately said he would remove it as I was not informed of consequences.
I did not have to quote him a word from data protection act GDPR on the Right to be Informed.
I also did not complain it was done in the first place clearly flouting the above acts
Joseph says
Sara, does going into a payment arrangement with a company affect/show on your credit file?
Sara (Debt Camel) says
Normally it does. Which isn’t a reason to avoid them – you can’t carry on borrowing, so if you don’t have enough money to make the loan repayments and get through the month, then your alternatives are to not pay at all or make a payment arrangement, either of which will affect your credit record.
Of course if you win the affordability complaint – and the last loan still owing is the loan that is most likely to be determined to be unaffordable – all negative marks should be removed.
Joseph says
Sara, Following on from my comment above: I’m completley free of payday loans now, and now all in all only owe 2 student overdrafts (co-op 2K and TSB 1.5K and a capital one credit card of £800). I just want to pay off these at something around £170 a month, but want to come to some agreement with these comapnies to allow me to pay it off but at the same time don’t want to enter into a DMP or something that will affect my credit score and it’s really not needed as I am not in any sort of financial trouble. So i’m not in any money trouble, i just want to pay it off in a structured way without it looking bad on my credit file? These are the final 3 things i have left (Debt wise).
Sara (Debt Camel) says
An arrangement to pay has exactly the same effect on your credit score as a DMP. A DMP is just a group of arrangements to pay organised by a DMP firm. If you aren’t in any financial trouble you don’t want an arrangement to pay.
The credit card is easy – assuming you don’t intend to use it! If the minimum payment is £24 (I just made that up, it depends what the interest rate on the card is), then set up a standing order to pay them £30 a month. paying a fixed amount every month is then very easy for you and it saves a fortune in interest. And it will all be helping your credit score. This calculator can show you how long it will take if you pay 25,30,35 a month https://www.capitalone.co.uk/support/repayment-calculator.jsf
The overdrafts can also be simple if you aren’t using either account. Just set up a standing order for more than the charges every month and the balance will drop. Alternatively, you could ask a bank if they could give you a loan to clear the overdraft and then repay that – depending what rate they would give you and what the overdraft fees are, this could be cheaper.
Holly says
Hi all is it possible to get a payment plan with a NatWest loan ?
Sara (Debt Camel) says
You can get a payment arrangement with any creditor. The above article looks at when this is a good idea and how to do it.
Gemma says
Hi,
I have a defaulted overdraft that is due to drop off my credit report 1 year from now. The original amount was £2001. I was paying £1 per month for several years and more recently after clearing other debts I have upped the monthly payment, the debt now stands at £1740. I will be increasing the monthly payment and should clear another £200 min by the time the 6 years is up.
My question is, how likely is it that the collection agency (Moorcroft) will pursue a CCJ as I am continuing to repay and also making efforts to up the payments? I have never actually spoken to them and they don’t have my current address.
Thanks in advance.
Gemma
Sara (Debt Camel) says
Sounds unlikely to me if you have recently increased your payments. Is there a particular reason you are worried about this?
Gemma says
I am just inexperienced in the matter and don’t want to end up with another 6 years of bad credit as it has been difficult. I had to resign from my business on paper so my business partner could open a bank account without me- I don’t want to continue to be a burden on the business like this and figure I have a year to think of solutions if this is very likely to happen. I will keep paying as much as I can and am due some tax back next year so will use that too to show even more willing before the end of the 6 years. Thanks Sara
Sara (Debt Camel) says
If you get a reasonable amount of tax back you can always offer a partial settlement. It will be off your credit record so this will never show.
Steven says
Sara,
After a sustantial loss of income and taking the realistic senario that things won’t improve for 12 months, I am facing the following:
£55,000 of debt (1 loan and all the rest cards)
£385 per month available to creditors after expendtures.
Home owner but no mortgage to pay.
Credit score of 400 but no markers (yet!)
I decided to approach each creditor directly rather than through an intermediary.
I have 90 days arrears on two of the credit card accounts. And I’ve been told at 180 days that unpaid arrears will be transferred to a debt purchaser. I have already begun a pro rata payment plan with these two. I am yet to agree on flexible payment plans with the others and they have all agreed to allow me any offer I choose to pay. All other cards are currently up to date.
I don’t know if I should be hung up on credit scores, but I was wondering if there is good reason to just default on the larger debt balances and get it over with, thereby starting that 6 year period as soon as possible? I guess what I’m asking is I’d like decent credit worthiness 5-6 years from now even if I’m still paying down balances.
I could possibly pay the outstanding arrears (£1000) before the 180 days is up I just don’t know if it’s worth doing, as cards have or soon will all be stopped and payments have been missed anyway.
Thank you.
Sara (Debt Camel) says
I guess what I’m asking is I’d like decent credit worthiness 5-6 years from now even if I’m still paying down balances.
If you think it’s likely to take you that long to repay the debts (and 55k is a lot!) then usually the best things is to stop paying them all for a few months now to ensure they all get defaulted and drop off after 6 years. Not just the larger ones.
If your income is very secure in these difficult times, you could also look at an IVA.
Although another option is to default on everything and then go for settlement offers in a few years when they have all been sold to debt collectors.
What could you do to improve your situation – do you have a room you could rent out?
Or you could look at getting a mortgage if your house is worth a lot? you will have to move fast on that before your credit rating is wrecked.
Linda says
Hello Sarah I’m on u/c and my husband has lost his job because of Covid I’ve had 2 coronavirus payments holidays with my loan company and due to start making payments again in October which I cannot afford what are my options now I’m with 118118 loans would be grateful for any advice before I ring them thank you Linda
Sara (Debt Camel) says
You can ask 118 for a payment arrangement.
Do you have other debts as well? It’s best to get a plan for all of them, not just the ones you think are worst.
Do you have any priority debts – rent arrears? council tax? gas/electric?
Any benefit overpayments?
Also read https://debtcamel.co.uk/refunds-large-high-cost-loans/ and think if this 118 loan was always “unaffordable” for you – in which case complain about that.
Karen martin says
Anyone know how good marks and spencer credit card are at letting you do a repayment plan for say 6 months paying less thanks
Sara (Debt Camel) says
It will depend on your situation.
Have you had problems because of cornavirus?
Karen says
Yeah I’ve had two 3 months payment break gone back to work part time so was wondering if they will let me pay a reduced payment for a couple of months I did one with them a few years ago about 3 or 5 years ago
Sara (Debt Camel) says
Assuming you can’t afford the normal repayment, one thing you could do is ask for is a payment arrangement as you still have problem as your hours are lower – ask for interest to be frozen AND ask for the interest that has accumulated during the two 3-month breaks to be removed – lenders are supposed to do this if you are still in difficulty when payment breaks end.
This will affect your credit score, but there isn’t likely to be any option that doesn’t here. And by removing the interest that has been added over the last 6 months it will help you get the debt down a lot quicker.
if you want to know if you have any better options, talking to a debt adviser is a good idea – call National Debtline on 0808 808 4000.
Rachelt85 says
Hi,
I currently have an arrangement to pay with satsuma loans x2. It’s showing on my credit file as missed payments, should it show as partial or in a plan instead? Would this look better on my credit score?
Thank you
Sara (Debt Camel) says
Were these large loans? Dud you have any from Satsuma before?
Dan says
Hi Sara
I settled an account with Vanquis in June 2019. I was on payment arrangement so I have AR markers for about 9 months however I’ve since realised that I was actually meeting the minimum payment each month within the credit agreement before the arrangement to pay was applied which was £5 . Am I right in thinking that the AR markers should be removed as the minimum payment was being met ?
Thanks
D
Sara (Debt Camel) says
did they freeze interest?
Dan says
Hi
Yes they did , so I’m assuming they are justified in applying the AR markers ?
Many Thanks
D
Sara (Debt Camel) says
yes, this was an arrangement to pay £x and have interest frozen.
mark says
Last year I requested a payment holiday on my Vanquis account due to a temporary change in finances. They put me on a instalment payment plan, which I wrongly assumed was a short term plan, as I had requested, as would be reviewed, as per the confirmation letter. When my circumstances returned to normal I contacted Vanquis to advise I could return my account to normal status. They advised that wasn’t possible. I currently have approx £3k outstanding on my account and they have set up a £10 per month payment plan, the whole time recording on my credit file as AP. This will take 30+ years to clear at this rate. I did a SARs as I wasn’t convinced this was corrected. It showed on my notes that my circumstances had changed and that I had to quit full time employment to become a full time carer for my daughter. I have not left my job, nor do I have a daughter. I believe I was incorrectly placed on somebody else instalment plan and as a result have suffered negative impacts on my credit report. Do I have a case to complain? I assume they will have a recording of the call and it will prove it wasn’t me, as I only ever communicate via writing with them. Advice appreciated.
Sara (Debt Camel) says
how long has this been going on for? did you request a payment holiday because of Covid-19?
what are the rest of your finances like?
mark says
It happened February last year so not because of Covid-19, but that meant it took longer than planned to get back to normal as a result of Covid (which I advised them). I’m on top of all my finances now. Still have CCs I am paying off but everything is up to date and within an affordable limit.
Sara (Debt Camel) says
if it wasn’t a covid-19 payment deferral, then it will affect your credit record. They have presumably frozen interest? Can you not just increase your payments and clear the balance a lot sooner because no interest is being added?
mark says
I appreciate that they have frozen interest and that can affect my credit record, however the payment plan they set me up on was one agreed with someone else with different circumstance to me, which have wrongly been applied to my account. They have made errors. I should never have been put on this long term plan with no way “redeem” my account. I wasn’t given the correct terms to the new plan as it didn’t relate to me. Yes, I can “just pay more” but I cannot reinstate my account to is regular status like I have in the past as I have been put on a long term payment plan. Paying back early at approx £150, which I was paying affordably before the circumstances change would still have me on an AP for 20 years and so I would gain no benefit from paying off earlier in terms of my credit file, may as well stick to the £10 per month for 300 years option.
Sara (Debt Camel) says
Paying back early at approx £150, which I was paying affordably before the circumstances change would still have me on an AP for 20 years
Your balance is £36,000 ???
Mark says
Sorry bad maths on my part there. 20 months not years :-/ Would you believe I have a maths degree. It has does harm in the sense that the AP would revert back to regular payments once the temp measures have been removed where as now they will remain for a further 20months. In the past they never even put APs on my file as it was a temporary measure for 2 months. (Same as all other creditors).
Sara (Debt Camel) says
wouldn’t it be good to clear this debt in 20 months?
this was clearly not a very short term measure as you never got back in touch to say you wanted to resume normal payments, so you are going to have AP markers there for quite a while. Your credit score will not quickly recover if you return to paying interest and normal payments.
So to be clear. they have clearly cocked up, so you can complain and ask to go back to normal.
But it isn’t at all clear to me that you would gain by doing this.
Sara (Debt Camel) says
it is odd that they have clearly got the wrong info on your account. But has this actually done any harm? The arrangement would have shwed tempoaril;y on your credit record anyway.
HJL says
Would AP markers on credit file affect employment? Would employee background screening reveal these or be red flags for
Employer? Thx
Sara (Debt Camel) says
It is down to the employer. But I think that would be very unusual.
HJL says
Thx, worried about severity of APs and whether to disclose or not.
Would you recommend disclosing?
Sara (Debt Camel) says
What have you been asked about?
Is this for a job application or for your current job?
HJL says
It is for Job application and asks if I ever entered into a deed of arrangement, IVA or trustdeed for Scotland or other agreement in favor of a creditor? Not sure whether AP means other agreement in favour of a creditor or if AP is not as severe as the information they look for, Thx
Sara (Debt Camel) says
I think you can answer No to that. They are asking about formal agreements with a creditor, not an arrangement to pay which is temporary and informal. I understand this is worrying – I suggest you talk to National Debtline on 0808 808 4000 and see what they think.
Mark says
I would go back to normal markers on my credit file and they would be cleared 20months sooner than if they keep on the current AP. That is a clear benefit. I can still clear my debt in the same amount of time but the AP markers would be removed immediately rather rather at the end. I was never informed I’d get the AP markers and as I hadn’t in the past, when they had frozen interest, I had no reason to suspect they would again. I requested a temporary arrangement for which they would review (their words), they set me up on an AP based on someone else’s situation, that was never reviewed until I raised a complaint back in December (it has taken 3 months to get the SARs). I asked 6 months previous to that if I could return to my normal payments and they refused as I didn’t have the affordability but they did not check this and refused to acknowledge my new I&E, etc. I have actually had a payrise during all this as well as a tenant move in (tenant moving out suddenly was cause of temporary income loss, covid meant I couldn’t get someone else in, all of which they have been made aware possible recorded on the incorrect file.
Sara (Debt Camel) says
AP markers disappear 6 years after the settlement date of the debt, not 6 years after the last AP marker.
HJL says
Thanks for advice Sara
Dan says
Hi Sara,
Just reposting as advised.
So basically I have a loan that I requested to be defaulted in April 2021 and they backdated the default to 2018. On my credit file it shows D for all months up to April 2018 and for last 3 months shows A (arrangement to pay)
I am checking with credit karma.
I have a Credit card also defaulted in 2018 but all months show as D even though I am on a payment plan.
My worry is with the loan, they come up as an arrangement to pay now but when I click on the debt it shows defaulted. I don’t want it to be on my file for another 6 years.
Sara (Debt Camel) says
I suggest you have a look at your statutory report from TransUnion, see https://www.transunionstatreport.co.uk/.
that is the data Credit Karma is reporting on, but it is often easier to see what is going on with the statutory report than the “prettier” third party reports.
Dan says
Hello,
Thanks it shows as a default on the statutory report. I assume this is OK then?
I also raised an issue with transunion for a lender (drafty) who I have been making token payments for 3 years and they have not applied a default and they also mark months as paid which I have not. They think I am on a payment plan.
Thanks
Sara (Debt Camel) says
So on the statutory report it still shows as Default each month?
There is no point in asking TransUnion to correct something – they will just ask Drafty who will say it is fine.
Have you looked at making an affordabilty complaint to Drafty? Use the standard payday loan template here https://debtcamel.co.uk/payday-loan-refunds/. If you winj that, they have to delete all negative marks from your credit record … if you lose, you can fall back on asking Drafty to add a default.
Dan says
Yes correct it says default on transunion.
Have made complaint was rejected because it was first credit line with them even though had maxed out credit everywhere.
When I contacted the lender, they are awful saying I was on a payment agreement and they won’t apply default and I have been making token payments
Sara (Debt Camel) says
Did you send Drafty complaint to the Ombudsman?
Sara (Debt Camel) says
So as I said, TransUnion will not apply a default, they will just ask Drafty.
You can either take the complaint about Drafty to the Ombudsman or simply stop paying then for 6 months now – they will have to add a default then.
BUT have you talked to a debt adviser about your situation? You have had high cost credit, you are only making token token payments for years, I think some debt advice could be a holp. Token payments never clear debts and weven when they are off your credit records, they are still enforceable in court and will make it very difficult to get a mortgage. So it is good to look at your other options.
I suggest you phone National Debtline on 0808 808 4000.
Dan says
I am on a DMP for all my other creditors with defaults. Should clear in 10 years. Drafty are absolute cowboys. Have asked them several times to apply a default and they are saying no because they seem to think there is a payment plan. They have passed debt onto DCA not sold but making token payment till they apply default.
I will stop all payments for 6 months see what happens. I have no assets so not sure what other recovery options that can take.
Sara (Debt Camel) says
How large are the debts in your DMP? how much are you paying to the DMP a month?
Dan says
20k debts and pay £120 per month. Can increase the amount in the future once things settle.
Sara (Debt Camel) says
To point out the obvious, unless you are expecting to massively increase the payments you should probably be considering some form of insolvency. Your credit record is not your main issue here, it is the need for an effective debt solution.
Dans says
Yes I did, the ombudsman are a joke! I had 5 PDL, 3 maxed out credit cards a loan and applied for a drafty loan and they rejected my complaint.
To be honest they upheld the PDLs because I had lots of loans with each. I have lost faith in the UK regulators including FOS to apply any common sense.
Smith says
Hi, I had arrangement to pay on a credit card since 2016 as I was unable to work due to some personal circumstances. I managed to get back to work in early 2020 and managed to pay of the full balance by the end of 2020 and closed the account. I am in the process of applying for a mortgage and found a lender who is willing to lend based on my poor credit report and couple of defaults but set an objection due to Arrangement to pay on one of the credit cards. They are OK to consider defaults, Is there a way I could ask the credit card provider to remove the arrangement to pay or register a back dated default as AR when on for nearly 4 years
Sara (Debt Camel) says
See https://debtcamel.co.uk/debt-default-date/ – you can ask but it may not work and it may not be quick.
The problem is that you have very recently repaid this. Next year when it has been more than a year since your problem debts were settled it may be easier to get a mortgage.
Smith says
I’ve read your article and by the looks of it I am expecting the AR to stay on until end of 2026 whereas if a default was register in 2016 it could potentially fall off in 2022. I am desperate to move and I have bigger deposit. I thought defaults will somehow cause issues (which this lender is bot bother about as they are registered in 2017 and fits their over 36 months criteria), did not think that AR would be an issue.
Sara (Debt Camel) says
A lot of lenders don’t mind default if they are more than 3 years ago – but they also usually want these to have been settled for more than a year.
ARs are a real problem – lenders like to imply that are less bad than defaults, but they are still bad and they stay on your credit record for much longer than defaults. This suits lenders as they can sell your debt to a debt collector for more if it is “undefaulted” as the debt collector then knows you will be worried about your credit record for longer :(
Smith says
Thank you for your comments Sara
The credit file is marked as settled in Dec 2020 after the last payment, credit file updated in Jan 2021. So Am I right in thinking it will be OK with some lenders after Dec 2021? I am going to try and get in touch the credit card provider to so see if they can sort something
Sara (Debt Camel) says
It may be. 3 years since the problem started & 1 years since it has been resolved was a rule of thumb used by many lenders before the pandemic. Since then of course lenders have just wanted more deposits from anyone who doesn’t have clean credit record. It’s hard to guess what the mortgage market will be like in 6 months from now.
J says
Hi
Apologies if this has been answered anywhere. I had some missed payment markers for 3 months from Satsuma back in 2019 and for those 3 months I was on an arrangement to pay. I actually paid off the loan in the 4th month but needless to say they added missed/late payment markers to my credit file. I have since been in touch with them and they explained they will remove the missed/late payment markers and add the arrangement to pay marker instead. Is this worse? Which is better for my score? And will it impact my score today seeing as this was nearly 2 years ago.. any advice would be appreciated.
Thanks
J
Sara (Debt Camel) says
I don’t think it will make a lot of difference. Remember that no lenders ever actually use the credit score that you see, they make their own assessment based on the detail information.
BUT how large was this Satsuma loan? Did you have other Satsuma loans before? Have you looked at making a claim to the Provident Scheme, see https://debtcamel.co.uk/provident-scheme-claim-refund/? If you can win a claim all negative marks will be removed – in pratice they may just delete the whole record.
J says
Hi Sara,
Thank you. I have submitted a claim for the provident scheme. Hopefully they remove the loan.
J
Jonjo says
Very interesting. I don’t suppose it’s possible to know which is more damaging to a credit file out of an ‘arrangement to pay’ marker or a ‘missed payment’ marker of 3? I’m guessing it depends on each lender’s own criteria? I’ve been contesting late payment markers with a couple of my old creditors and one of them has said they’d be happy to change it to an ‘arrangement to pay’ marker, but I can’t seem to find out if that would be good news or bad news for my credit file. Any insight appreciated!
Sara (Debt Camel) says
That depends…
did you make any payments? was there an arrangement to pay?
Have you now repaid the arrears and gone back to normal payments?
HAs the whole debt been settled? If not how long do you think it will take?
Jonjo says
Thanks for such a quick response! Above and beyond the call of duty. I made payments every month through StepChange, often just £6 less than the contractual minimum. I wish with hindsight I’d intervened with StepChange about that. I settled the remainder of the debt in full last September. Again, I probably could have negotiated to have improved my file at the same time if I’d been savvy enough. Do you think changing it to an AP is better than the six consecutive ‘3’s’ or is it much of a muchness? Thanks for your insight.
Sara (Debt Camel) says
Thanks for such a quick response! Above and beyond the call of duty.
thanks but it is random – you just got lucky :)
If you had a StepChange DMP, does that mean you had other problem debts with payment arrangements and defaults showing?
Jonjo says
Ha! Well, I’m certainly grateful I caught you at the right time.
I don’t have any defaults on the account (I did have one with another creditor once but they agreed to wipe it on the basis of irresponsible lending). So, the six consecutive ‘3’s are the worst thing on there along with an ‘AP’ recorded for a Loans2Go account which I’m hopeful they’ll agree to delete completely following a complaint. There are some closed payday loan accounts which will be removed by April thanks to advice I read on another of your pages, but I always paid those on time so it’s mainly the embarrassment of them being on there which is a problem for me.
The background, really, is that my circumstances today are thankfully very much happier than they were a few years ago and I’m trying to ‘polish up’ my file however I can to keep my life moving forward. It’s just a bit of a minefield and when this particular creditor offered to swap the markers they used I had no idea if it would be for good or for bad, especially given we may apply for a mortgage in the coming months. Thanks again!
Sara (Debt Camel) says
So send the L2G complaint to the Ombudsman if they will not agree to this.
I am afraid I have no idea whether a mortgage lender would prefer 6 APs or 6 3s. You could ask a broker but they may be equally vague.
Rob says
Hi,
Could I get some thoughts on my situation?
I have attempted to set up payment arrangements with 6 creditors – five have accepted a token £1 payment for the time being with either 3 month updates or ongoing as my finances improve.
Drafty though have declined and state that because of my financial situation – negative personal disposable income. I gave the same info to the other five with the additional info that my incredibly generous partner who I live with is helping me financially, hence being able to offer £1 a month.
Drafty refused to factor this in and stated that the options are either pay the debt or they hand the account to a debt collection agency.
This seems a bit harsh considering the flexibility of other lenders. Is there anything I can do? I’m going to pay Drafty £1 a month anyway just so it’s on record that I’m making a good will gesture while my finances improve.
Any thoughts would be appreciated.
Cheers!
Sara (Debt Camel) says
I suggest you don’t pay them for a couple of months (this may involve cancelling a direct debit or a continuous payment authority over your debit card?) and let them send the debt to a debt collector. They won’t be more unpleasant to deal with than Drafty!
Have your finances suddenly got worse and do you expect them to get better in a few months?
Can you say what your total debt to other lenders is and how much you owe Drafty?
Also have a lot of your problems been caused by high cost credit such as Drafty…
Read https://debtcamel.co.uk/payday-loan-refunds/ and think about sending Drafty an affordability complaint. This could get your balance reduced or even wiped and refund depending on how long you have been using their very expensive credit.
And if your other debts are credit cards when the lenders have increased your limit too high, read https://debtcamel.co.uk/refunds-catalogue-credit-card/ and think about complaining to them too!
Rob says
“Have your finances suddenly got worse and do you expect them to get better in a few months?”
From about Last September to about February this year was rock bottom – I basically took on the debts thinking things would be a fine, short term arrangement and then things tanked. But am back working and seeing an increase in income for sure. Aiming for better each month.
“Can you say what your total debt to other lenders is and how much you owe Drafty? ”
Total debts to the other lenders is approx £4500. Drafty is £960.
Sara (Debt Camel) says
ok, but Drafty could see your bank account, couldn’t they? So they should have known that you could not manage to repay this… I would definitely send them a complaint.
Rob says
Oh, I see what you mean. I never thought of that – yes, I guess they could see what was in my bank account.
Sophie says
Hi Sara,
I wondered if you could please advise me on how best to help my grandmother.
She is 90 years old and, having been in and out of hospital over the past few years, has got herself into debt.
She has maxed out an overdraft of £2,500 and a credit card of £1,500. She is about £300 behind on her gas/electricity bill, about £120 behind on her water bill.
I have paid her phone bill as I don’t want her to get cut off, but I cannot afford to pay off her other debts.
I have read through this website and I understand that we must prioritise paying her gas and council tax (I am still waiting for a copy of the bill for the latter to see if anything is owed there).
But I am wondering if coming to an arrangement with the credit card and overdraft companies is the best solution (asking them to freeze interest and making very small payments every month)? And because of her age, are they likely to agree to it?
I also don’t know if having these ‘black marks’ on her credit file has an implication for her that we ought to consider – or an impact on what happens after she is no longer with us.
Any advice would be very gratefully received.
Best wishes
Sara (Debt Camel) says
Can I ask if she owns her house or is renting?
Also what do you know about her income – state pension? employers pension? widows pension? pension credit?
Her overdraft – has this been a long term problem or something that has built recently over the last couple of years?
It sounds like I am ignoring your questions but it helps to get a fuller picture!
One thing she should definitely do that doesn’t help directly with her money problems is to make sure she is on the Energy priority Services register: https://www.ofgem.gov.uk/getting-extra-help-priority-services-register
George says
Hi Sara,
My sister has been in hospital since February this year, as I live with her I discovered last month she has a loan with everyday loans, and now the account is behind with payments.
I have contacted them to explain this, and there are no plans of discharge yet.
My question is can they still charge for this account, what is her rights in this situation?
Many thanks
George
Sara (Debt Camel) says
Sorry to hear this, that is a long while to be in hospital. Do you mind saying some more about her health, age and the rest of her finances?
Is she up to signing a letter to them if you write it? Or giving you authority To deal with the account for her?
People with these expensive loans also usually have other problem debts. Do you know what these are? Is she renting or does she own the house?
George says
Thanks for the reply Sara,
After having a major bowel operation she’s been having setbacks in terms of recovery and this is still ongoing, shes 51.
I sort of knew she had borrowings from different lenders including Tesco,capital one,littlewoods and everyday loans.
I have managed to speak with all the above but everyday loans just said they will stop phone calls, the others are not major sums so I have opted to help with payment and they were understanding and gave me time to do that.
Everyday loans is in the region of 7.5k and I have letters now with late payments and actions on the account I only found this out about 3 weeks ago. I also had a look at the contact and I think it’s been open for number of years.
As of now I have a letter from the hospital stating there are no planned dates for discharge.
I just find it really frustrating and I want to help the situation with everyday loans, but they don’t seem to be cooperative at all.
Many thanks
George
Sara (Debt Camel) says
Can she sign a letter if you ask her too?
Is she renting or does she own the house?
George says
No she won’t be able to do that unfortunately…
She’s renting.
Sara (Debt Camel) says
In that case there isn’t much you can do. But it’s probably best for you to stop paying any of her debts and let them al be sorted out together when she is home and is better
George says
Thanks for the reply Sara,
Having said that I’m just concerned about the late payment charges on everyday loans, shouldn’t they stop that and cancel the charges occurred! Can’t they put some sort of an hold on the account?
Sara (Debt Camel) says
yes but
a) you cannot make Everyday loans behave reasonably
b) she can make a complaint and get these removed later, or indeed look at getting rid of all of her debts via a form of insolvency if she ends up not in good health and unable to work. That sounds as though it is a real possibility for her which is why I suggest you don’t waste your money on making any payments at all to any of her debts. If you want, you could move those amounts into a saving account in your name, so that money is available later for her to make settlement offers to the debts.
Matt says
Hi
Is it ok to cancel a CPA on my pay day loans without breaching the contract?
I want to pay via bank transfer as worried I won’t have enough money left to live on.
I am currently claiming for irresponsible lending on them but it could go on for months until I get a decision.
Thanks
Sara (Debt Camel) says
Obviously I can’t see the T&Cs of your loans. But it would be very unusual to say that you have to repay by CPA. If you make repayments by bank transfer by the current day, then you should not have these marked as late/missed payments on your credit record, if that is what you are worried about.
But how many lenders are you complaining to? You are right that these complaints can take many months. Are you sure you can afford to keep paying them? If you are worried about the interest added getting astronomical, that can’t happen with payday loans where the interest can never be more than the amount you borrowed.
Also what other problem debts do you have? Have you looked at a debt management plan for all your debts, including the payday loans. See https://www.stepchange.org/how-we-help/debt-management-plan.aspx that is very often the best option for you, getting you into a safe space while the complaints go through, where everyone won will speed up the DMP.
Ali khan says
Hi Sara, what’s the worst things a debt collector or banks can do to you if you decline to give them income / expenditures information. Thanks
Sara (Debt Camel) says
You previously posted about token payments and whether you should switch to a DRO.
So I am assuming you have offered creditors low or token payments and they are asking for income & expenditure information? And that you are asking about “consumer credit” debt – credit cards, catalogues, unsecured loans etc. The answer to your question is very different if you are talking about priority debts, see https://debtcamel.co.uk/start/priority-debts/
If you refuse, they don’t have to freeze interest or charges. You will get some contact – it varies between creditors how much and whether by phone, text, email or letter. They can send your account to debt collectors. After a while they may decide to sell your account to debt collector.
Your credit record will have missed payments recorded and after a few months this will probably change to a default.
A creditor can take you to court for a CCJ. This is a slow process – they have to first issue you a Notice of Default (this has nothing to do with your credit record). Then they have to send you a letter before Action/Claim. If you respond to that asking for more information they have to send that. Then you will get court papers. If you defend the case it will typically take a bout a year to get to court.
It is very unusual for a lender to take you to court for a CCJ unless this is a business debt. Guarantor lenders and a very small number of hugh cist credit lenders do, but all the other lenders are massively more likely to sell the debt to a debt collector after a while and let the debt collector go for the CCJ.
If a creditor gets a CCJ, they can send round bailiffs, get an attachement of earnings order so money is taken directly from your wages, or get a charge over your house if you own one. All of those are a long, long way off and are only likely if you do an ostrich act.
But why would you not show creditors your income & expenses? And have you talked to a debt adviser about a DRO?
George says
Just had a question about Barclaycard account that was opened in 2006 by my sister (passed last month) on behalf of my mother.
Current balance is 4018.18
Not sure what the original amount borrowed was!
Can they still ask for payment?
Sara (Debt Camel) says
in whose name was this account – your sister or your mother?
George says
My mothers name.
She’s 73 and has no income.
I have no ideas how this was approved back in 2006
Sara (Debt Camel) says
who has been using the account – your suster? your mum? both?
when were the last payments into the account and who were they made by?
has your mum only found out about this account as your sister has died?
George says
My sister had been using it and paying for it she had an standing order in place for a while for 60 a month.
I have some more information about the account which I have here. My mum was under the influence that it was all paid up!
Sara (Debt Camel) says
did your mum ever use it?
George says
Probably not and I just asked her she doesn’t really recall as she’s getting on a bit.
Sara (Debt Camel) says
so I am guessing here and you don’t sound very sure of what happened… but it sounds to me as though Barclays may think this is an account that your mum allowed your sister to use – in which case your mum may well be liable to pay it.
Does your mum have any other debts? If not, the simplest option may be to offer them £1 a month. If she has other debts it would be best to talk to an adviser about all of them.
George says
No she doesn’t have any other debts.
This account was opened in 2006 and she didn’t have any income so I’m not sure how she got this credit in the first place.
She’s now 73 and on pension credit.
Sara (Debt Camel) says
So they will accept £1 a month.
If they can show she has used this account (and you seem unsure) then it’s hard for her to argue she knew nothing about it. You say she thought it was closed, so she clearly knew something about it.
you can ask them to write it off and explain what has happened, I’m just saying this may not be easy.
Kay says
Hello I had a large debt with HSBC just under £4000 and I then entered financial hardship and they put the account into default in 2018. When I contacted HSBC they were really supportive and put the account on hold and rang me every 6 months to do an outgoing incoming expenditure. Each time they didn’t want me make any payments and told me to concentrate on my mental health and priority debts. I havent paid anything towards the debt for nearly 3 years now.
I received a letter from them yesterday stating they they will no longer contact me for any repayments towards the debt however I will still be liable for the amount…..have you known this happen before? What does this actually mean?
In the letter it stated any future redress entitlement would come off the debt and not come to myself? Will they pass the debt onto someone else now?
Sara (Debt Camel) says
is this debt marked as defaulted on your credit report?
Kay says
Hi Sara – Yes this is marked as a default on my credit score. On my Experian score you can see it was defaulted on the 15/05/2018.
Sara (Debt Camel) says
This is what a responsible lender should do if they think there is little or no chance of you ever managing to repay this debt. It isn’t common but it is happening more often.
This debt will drop off your credit score in May 2024.
HSBC should not sell this debt and I would be very surprised if they did. If you like, to set your mind at rest, you could ask them to confirm that they won’t.
kay says
Hi Sara – I spoke to them and they just said that the debt will still remain there unless my circumstances change in the future. Can they contact me to repay the debt after May 2024? Or in your opinion is that it now?
Sara (Debt Camel) says
I think you can assume that is it. Keep that letter from them safely somewhere!
C says
Hi Sara, is a company allowed to issue a default notice after missing a months payment ? My payments are weekly, I made payments in July and one payment in August then they issue me a default notice in September
Sara (Debt Camel) says
who is the lender? Is this a letter headed Default Notice?
HAve you talked to the lender about a payment arrangement?
Matt says
Hi
I want raise a dispute with a missed payment on my credit file from cash float. Do I take to the FOS if I’m not happy with their response?
The account was locked and I couldn’t make a payment as I made an affordability complaint.
The account was then added to my credit file again and reopened. Then I received a final response letter. I never received any notification or reminders that payment was overdue and consequences of affecting credit file etc.
I continued paying thereafter…
Sara (Debt Camel) says
The account was locked and I couldn’t make a payment as I made an affordability complaint
how did you usually make payments before this?
was there a direct debit or a continuous payment authority set up when you took the loan?
Matt says
This was my first paymemt due
Yes a CPA but I cancelled it due to worrying about not making the full payments and leaving myself short.
Sara (Debt Camel) says
so did you try to make a payment? what do you mean “the account was locked”?
And what happened to the affordability complaint?
Matt says
The loan details and payment options were greyed out so I assumed the loan was put on hold whilst the complaint was ongoing.
The affordability complaint is at the FOS now…Ultimately I hope i win the case. In the meantime do I take this to missed payment issue to the FOS Sara?
Thanks in advance
Sara (Debt Camel) says
ok so it was your fault the payment wasn’t taken as you cancelled the CPA. If the CPA had been running and the lender had failed to take the payment, it would clearly have been their fault and they would have to remove the missed payment marker.
you can argue there was no way of you making a payment so this was unfair. I suggest you tell the Ombudsman about this when you case is looked at. if you win the FOS case that will resolve this problem, but tif this is your first loan, i don’t know how likely that is – how large is the loan?
Matt says
It was my first loan with cash float ( £900 ) I had 3 other PDL at the time. 5 loans and 3 credit cards. I was funding my gambling habit. I had more going out than coming in. My credit file had around 12 PDL taken out over the previous 6 months. My pay slip had a large discretionary bonus on it, Their affordability calculator told me I could borrow £300 max. I obviously lied about my outgoings on my application to fund my habit. £900 is a huge amount to pay back in 5 months!
salim says
Dear Team,
I took out an unsecured loan of £2,000.00 from TM Advances 3 years ago. The interest is so high it is almost suicidal. I have been paying £250.00 per month for the past 30 months. I took a payment holiday for about 6 months during covid. I reckon I have paid back over £7,500.00 so far.
I am told I still have 8 months to go!!
I am really struggling as this noose is so tight! Can you please advise me on what to say to TM advances to end this nightmare? it is ridiculous BUT I believe I was not fully informed. Any HELP. Thank you
Sara (Debt Camel) says
Do you think it was a big problem from the beginning, that repaying this loan was hard given your other debts and bills?
If so, read https://debtcamel.co.uk/refunds-large-high-cost-loans/ and think about making an affordability complaint.
What are the rest of your finances like – if you took such such an expensive loan did you have other high cost borrowing?
salim says
Yes Sarah, I did have other loans such as likely-loans and 118118money. At the same time…
Sara (Debt Camel) says
Then I suggest you look at affordability complaints about them too!
salim says
Many thanks
I am starting the process now!
Sara (Debt Camel) says
OK but the complaints can take a long while as many have to go to the Finacial Ombudsman. So if you are struggling now, I suggest you talk to StepChange about a debt management plan for all of your current debts – that will get you into a safe finacial place while the complaints go through. Winning any affordability complaints will really speed up a DMP.
Dave says
Hi Sara,
When setting up a payment plan with a creditor, they sent me a link to an open banking service. They stated I must give permission for them to access my account and credit card so they can get a better overview of my finances.
Am I required to submit to this request for credit kudos to have access to my accounts ? Or would paper bank statements suffice? Am I even required to show bank statements? I have filled out their income and expenses form , provided wage slips and given permission to check my credit score , but this open banking seems very intrusive to me. Thanks as always
Sara (Debt Camel) says
who is the creditor?
do you have other debts as well as this one?
are you behind with any priority bills – rent/mortgage, council tax, energy, car finance etc?
Dave says
Hi
It’s a credit union , and I also owe my bank
My bank have been great in terms of coming to an arrangement for a credit card and personal loan debt , it was very straightforward, however the credit union are insisting on this open banking , which I’m not overly happy with as I lose control of my data. All my priority bills are covered but I have been using credit to fund daily life as my unsecured loans repayments are so high
Sara (Debt Camel) says
Well you don’t HAVE to give them this access. But equally they do not have to agree to you making lower payments.
One option if you really dislike the idea of open Banking is to talk to StepChange and get a debt management plan (DMP) set up for this CU debt and your bank debts.
As an aside, you may want to look at affordability complaints to the bank and to the CU, see https://debtcamel.co.uk/tag/refunds/. if you win one it can help speed up payment arrangements or a DMP.
Sara (Debt Camel) says
You could also make a formal complaint to the CU saying that you are happy to give them information but you do not want to use Open Banking and you think they are being unreasonable in insisting on this.
Dave says
Hi Sara
Thank you for the advice , I will ring the CU today
Thanks again
salim says
Dear Sara,
I have a default notice on my credit file. The amount was for £300 and the lender is Satsuma. I paid the outstanding balance in full in 2019!
Satsuma made the decision to close cease trading on 31st December 2021.
Is the default notice therefore still legitimate?
Should they not have updated my file?
How can I complain? And to whom?
Sara (Debt Camel) says
did you default on the debt?
salim says
Yes I did.
I however I do’ not believe that I was sent the default notice.
Sara (Debt Camel) says
This can be hard to sort out now as Satsuma have closed.
One thing you can try is to ask the credit reference agencies to “suppress” the record because you cannot get a response from Satsuma about the problem (have you tried?) and you don’t think the record is correct. See https://debtcamel.co.uk/correct-credit-records-lender-administration/
Christy says
Hi Sara
I currently have one default on my file about to drop off on the 10th of november. I have 2 months of arrangements to pay on 2 of my loan accounts from 6 month ago with no missed payments all upto date.
3 credit cards with 40% utilistation and 2 loans on my file all upto date. How much do you think my score will improve? Its currently 480 on experian
Thanks
Christy
Sara (Debt Camel) says
so you had 2 months of payment arrangements showing and now those accounts are back to paid on time, no arrears?
Christy says
Yes i had 2 months of payment arrangements all paid up no arrears or missed payments
Thanks
Christy
Sara (Debt Camel) says
There are some “numbers” here that may help: https://debtcamel.co.uk/credit-score-change/. That suggests that your score may increase by c 200 points. It may be a bit less than that because of the payment arrangements,
Musa says
Hi.
I would like your help please I got by business on limted company however it’s hard and not working for me anymore but I won’t close my company on company house but I have stopped everything. I got a business credit company is Capital on tab I got a debt for £8000 but I can’t afford monthly repayment which are to high. If I can’t afford paying it will it effect my personal credit fill or not ? Any advice plz
Sara (Debt Camel) says
I suggest you talk to Business Debtline – they are experts in debt, business and personal, for the self employed and people with small limited companies. See https://www.businessdebtline.org/
Musa says
Good morning.
I got question I been hsce problem with my car wish is on finance HP. I have brought this car 6 months and it’s giving me a problem and I had it checked so many times and I can’t get sorted I have raised a formal complaint with company called Mash finance and ZUTO there are investigating my complaint. What are the chances I can get out of HP since the problem caused. Advice please
Sara (Debt Camel) says
So this s a problem about the quality of the car, not the affordability of the finance?
Jamie says
Hi Sara,
I entered a DMP with Step Change a few years ago. On checking my credit file, I can see that the majority of my lenders have marked me as Defaulted, however one of them has marked me down as Payment arrangement.
Is it down to the lenders discretion what marker they use? Or do you think I could ask for them to update it to Payment arrangement.
Sara (Debt Camel) says
See https://debtcamel.co.uk/dmp-credit-rating/ which looks at this topic
jmrpit says
hi sara,
i have a credit card debt of £9k , but it doesnt appear on any of my credit reports eith with credit karma or equifax ? Ive just noticed that the name on the card is not exactly my name , they used my middle name as first name , so its middle name + surname ?
if i was to stop the direct debits woudl it show on credit report and am i liable ?
Sara (Debt Camel) says
You could also check an Experian report and see if it’s on there.
It may be that it isn’t at the moment as the name is wrong. But you are liable for this debt and if you simply stop paying the lender my investigate and resolve the name issue and it will then appear.
Can you afford the payments? Has the lender increased your credit limit too high?
Ama says
Hi Sara,
I have debts around £100k, from a number of credit cards & personal loans.
This is the first month I’ve missed payments for some of these.
I’m going to do a summary of our income/expenses, all your information on this site is very useful so thank you.
My question is, I don’t own any assets and our car is a lease, what is the difference between defaulting on the credit card/personal loan debt and going down the bankruptcy route?
A big concern of mine is I have a young family, if our landlord were to sell the property we are currently in and we had to move, we wouldn’t pass credit checks. But is it worse to have this debt slowly defaulting than to go all out bankrupt?
Would employers be informed in either case?
Any guidance would be greatly appreciated.
Sara (Debt Camel) says
Can I just check that 100k is correct, not a typo?
Is all of this debt in your name or some in your partner’s?
Has this debt increased slowly over many years or has there been some major problem recently?
Ama says
Hi Sara,
Unfortunately for me it’s not a typo, £100,000 it’s accumulated over about 10 years.
All in my name, my partner as an additional card holder on a couple of the cards.
It’s been mismanagement on my part, taking out cards with a view to balance transfer but needing to use funds for Nursery fees/cover maternity leave and other things.
They’re all on minimum payments. I was expecting holiday pay this month but that will come in January unexpectedly, which has resulted in the missed payments this month.
I think in Jan we could get out of any arrears but I’m beginning to wonder about the point of continuing on minimum payments.
Naively I still hold out belief we can clear this over time but again thinking about the point considering the time compared to going down the bankrupt/default route.
Sara (Debt Camel) says
How many of the cards are on 0%?
The loans, are they all cheap – under 10%?
Ama says
None of the cards are on 0% anymore. Personal loans at 13% & 15% interest
Sara (Debt Camel) says
ok I think you need to do two things. First sit down with your partner and get yourselves a very realistic budget. It’s going to take years to clear this so you can’t live on beans on toast and no new clothes for that long. Fill out this sheet here which lists things you may have forgotten: https://tools.nationaldebtline.org/yourbudget/
Then talk this through with a debt adviser. I suggest National Debtline on 0808 808 4000. You need to be very realistic about whether you can pay off all this debt as it is. Or if a debt management plan where interest is frozen will let you clear it. Once you know how long those options would take, you can then decide whether bankruptcy and getting a clean start is the right move for you.
Ama says
Hi Sara,
Income wise I get £5k monthly, my partner under £2k, but with nursery fees (twins aged 2), the minimum payments on all the debt and priority bills we’re struggling, moving out of london would prevent us both from getting to work/loose family support (we have 3 boys eldest is 4).
When the twins get their free nursery hours next September it should make things easier, but it’s all getting a bit much.
I work in financial services, my fear is any action that would alert my employer as they may terminate my contract (im a contractor not a permanent member of staff).
Thanks for all your advice, I’ll do the budget then call the debt helpline.
T says
Hi Sara,
I had around £600 owed to the council from an old property. The account went to court without me realising and I then agreed to pay £50 per month to clear the balance.
I made these payments via direct debit from May until September. In September, the direct debit failed as I had not been paid yet, but I made the payment for the £50 agreement, plus my normal payment for current property manually via my online account.
In October, the £50 payment never went out, whereas my standard council tax payment did. All I (wrongly) assumed at the time was that the balance had been written off or something as I had no correspondence from the council.
I received letters from Newlyn (discovered this only a few days ago) demanding now £655… the remaining balance on my council account was £315…so over £300 in Newlyn charges!
I managed to get Newlyn to lay off me and let me pay the balance over 3 months starting this Friday.
Called the council and, in a nutshell, they said I should’ve read the terms of the agreement and because I didn’t call to query the direct debit not going out in October, they automatically passed the account to Newlyn.
Legally, is there any way I can avoid paying the fees to Newlyn? Could I make a payment direct to council tax for the remaining balance?
Sara (Debt Camel) says
So you had never explained to the council why the direct debit payment was missed and that you wanted to carry on with the arrangement?
I suggest you talk to your local Citizens Advice who may have a local contact that can help with this.
T says
Hi Sara,
I did explain to them, but only this week which is a couple of months after the payment was missed. I told them that I manually made the payment the day after the direct debit didn’t go out, then the DD wasn’t taken the following month but I thought nothing of it until I got the text from Newlyn.
Told the council I wanted to continue but they said they cannot recall the debt back and I’d have to deal with Newlyn from now on.
Sara (Debt Camel) says
That is unfortunate. I think legally they are right, but talk to your local Citizens Advice and see if they can ask for this to be called back from the bailiffs as a goodwill gesture.
Nic says
I have a credit spring loan and the dates were not working with my wage so i moved the date by a month and an arrangement to pay marker was added to my credit file i have been working tirelessly to keep my credit file clean and i cant believe that they have added this to my account.
Is this what creditors do know ? seems a bit excessive
Thanks sara
Sara (Debt Camel) says
They should have warned you about this. I suggest you ask them if they can remove the arrangement to pay marker as a gesture of goodwill.
Nic says
Thanks to your advice they have removed this marker as a Gesture as goodwill as you suggested.
Thanks Sara
Dalo says
Hello,
I have a default on a loan with ratesetter in 2018 applied in 2020 and it says the debt is defaulted. I then entered into a arrangement to pay the debt. On my credit file it shows Defaulted from 2018 to 2020 then an A (arrangement) from 2020 which I set up to clear the debt.
Will my debt still fall off after 6 years the default was applied in 2018.
Thanks
Sara (Debt Camel) says
what credit report are you looking at?
This loan – do you think it was unaffordable at the time you took it? A loan is only affordable if at the start of the finance it looks likely that you will be able to repay it without having to borrow more elsewhere or get behind with bills.
Dalo says
I looked at TransUnion and also credit karma. Credit karma shows the A.
No I had over 25k loans and credit cards at the time defo not affordable but the complaint was rejected by the FOS.
I am just worried that the debt shows Defaulted and will not drop off after the 6 years
Sara (Debt Camel) says
what does Transunion show?
Dalo says
TransUnion shows defaulted and credit karma shows arrangement to pay
Sara (Debt Camel) says
Well this should not be happening. But as there is a default date, the debt should drop off after 6 years.
I suggest you download and keep the Transunion credit report. In case the default later disappears.
Amz says
Hello
I have a loan that is defaulted, on my credit file it was marked as defaulted for 3 months, I have now set up an arrangement to pay this and the the marker has changed to arrangement to pay.
I thought once defaulted this is how it stayed? It should not be marked as an arrangement to pay?
Thanks
Sara (Debt Camel) says
how long was it after you stopped paying before the default was added?
how much are you now paying each month – how long will it take to repay at that rate?
Amz says
It defaulted 6 months after I stopped paying. I then had 3 months of default markers and now 2 months of arrangement to pay markers. I am currently only paying a token amount each month and the debt is approx £1100, so it will take a long time to pay back at this rate.
Sara (Debt Camel) says
who is the creditor?
Amz says
It is with drafty
Sara (Debt Camel) says
Which credit report are you looking at? Does the default date still show, or has it been deleted?
Have you looked at making an affordability complaint against Drafty? If you win this, all negative marks are removed from your credit record.
Amz says
I am looking at credit karma, the default date does still show.
I did try but my claim was rejected.
Sara (Debt Camel) says
I sugest you get a TransUnion statutory credit report, see https://www.transunionstatreport.co.uk/CreditReport/AboutYou
Did you take the Drafty complaint to the Ombudsman?
do you expect your finances to improve as this token payment is b=never going to clear it? How many other problem debts do you have?
Amz says
Thanks, I will look at the link.
No, I didn’t take it to the ombudsman.
Finances won’t improve for a good while yet and we have a lot of debt but also a house so limited with options.
Sara (Debt Camel) says
well if the reply from Drafty was less than 6 months ago, send it right away!
This should drop off 6 years after the default date, but this sounds odd.
Sara (Debt Camel) says
Also get a copy of your TransUnion statutory credit report – that should show the default. I suggest you download and keep the Transunion credit report. In case the default later disappears.
Sarah says
Hi, I wrote myself to my creditors last year and had some arrangements to pay set up on my credit accounts. I have paid off 90% of my debts now and so it is all showing as settled on my credit file apart from one cc left which I will pay off in next few weeks. None of my accounts ever defaulted and I have a good credit score of 742. We are looking to move house this year and I was wondering if I am going to rejected by lenders because of the previous arrangements to pay. Or does it work in my favour that I will have zero debt and looking at less than 60% LTV. Do you think any high street lenders would consider me? Is it better to stay with Barclays and port my current mortgage to the new house. Perhaps they are more like to offer me a mortgage as I have had no issues with any mortgage payments ever. We would be looking to buy a more expensive house so will need more borrowing on our mortgage. Thanks
Sara (Debt Camel) says
Payment arrangements or indeed defaults will not be a problem if you just require a new fix from your current lender – in that situation Barclays would not make affordability checks.
But these payment arrangements are very likely to cause you problems, with any new lender. Or with Barclays if you need to borrow more as the porting may not apply. I think you need to talk to a mortgage broker about your options and there may not be any from high street lenders.
Karen says
Good evening I’ve got a marks and spencer credit card with a balance of just over £6000 the credit limit is £7200 I’ve been on a arranged payment plan paying £60 a month I’ve always paid before the due date on the statement it’s does say minimum payment £60 a month but in the right hand corner says you are on a arranged payments today I’ve had a letter saying they want the full amount back within 18 days otherwise they could sell the debt on any advice will be ringing them on Monday the interest has been stopped
Sara (Debt Camel) says
Well it seems unlikely you can pay the whole amount back? If you need a long term arrangement to pay, then it doesn’t much matter if they do sell the account on. Don’t do anythinbg sill like borrowing to try to repay this debt – that just starts the interest cycle again.
What are the rest of your finances like at the moment – do you have other problem debts? Any arrears on bills?
And do you think M&S increased your limit too high? For example if you were only making minimum payments?
Karen says
My other priority bills are fine should I ring marks and spencer up and check it’s correct and see if I can stay on the payment plan I’m hoping come September I will be able to start paying £110 a month rather than £60 it does say on the letter they will try and work with me if I ring them
Sara (Debt Camel) says
You can if you want. I am just saying having a debt sold is you need an arrangement to payments is not a big problem.
Karen says
So having a debt sold on isn’t a problem I can just sort a arrangement payment with the debt company
Sara (Debt Camel) says
yes.
I don’t know if the debt has been marked as defaulted or just in a payment arrangement.
If you are paying 100 a month, it is going to take nearly 5 years to clear the balance. In this case you WANT the debt marked as defaulted as it will then drop off your credit record 6 years after the default date. If it remains in a payment arrangement, it will stays, harming your credit score, for 6 years after the debt is settled, which will be a lot longer.
Karen says
Hi Thanks for your reply back it’s just in payment arrangements at the moment what happens if default on it do I not need to pay anything at all many thanks
Sara (Debt Camel) says
oh you still need to repay it after a default. It is just marked differently on your credit record. A default is regarded as more serious but bizarrely it drops off your credit record much sooner and at that point your credit score is much better.
If you can repay a balance in under 2 years, a payment arrangement is normally regarded as better for you. 3 years is marginal. Over 3 years and its normally better to get the debt defaulted.
I suggest you tell M&S you would like a default added and don’t mention you may be able to pay more later.
Karen says
Are debt consolidation loans any good
Been offered debt consolidation loan by Marks
Sara (Debt Camel) says
M&S have offered you a loan to clear the credit card balance – what interest rate? and are the proposed monthly payments affordable?
Karen says
Yes it’s with marks and spencer no interest added paying £76 a month for 84 months but will have it payed off before that has going to pay more when I can thanks for the help
Sara (Debt Camel) says
That sounds like a helpful loan, but you should ask how it will be shown on your credit record, so you are aware.
Karen says
Yes will do thanks for your help and advice it’s much appreciated
Matt says
Hi sara
Vanquis upheld my complaint for unaffordable lending and said I need to make arrangements to pay off the balance as the refund doesn’t cover the outstanding balance (£900)
The issue I have is that they’re still adding interest to the balance! That can’t be right can it?
They also explained that they cannot remove anything from my credit file until I’ve cleared the balance?
Plus if I don’t clear the balance they can place a negative marker on my file…
Any help would be great
Sara (Debt Camel) says
Are they refunding all interest from a certain point? Or just the interest above a previous credit limit which they say was OK?
Matt says
All interest from the start. Never had an increase just started with a £1200 limit
Sara (Debt Camel) says
in that case go back to them and say if they don’t agree to stop adding interest and remove negative marks from your credit record, you will be sending this case to the Ombudsman.
Matt says
Many thanks Sara
James says
Hi Sara,
Just a quick one, if I reach a payment arrangement with my creditors, does this stay on my credit from 6 years from the date you enter it or is it 6 years from when you finish paying off the arrangement.
If the companies agree, it may take up to 10 years to clear some of the debt and I am worried it may be 6 years following clearing the debt that it is of my credit file meaning it’s 16 years in total it will be affecting my credit file.
Any advise will be helpful.
Sara (Debt Camel) says
6 years from the date the account is settled or partially settled.
If it is going to take that long, it is better to tell the creditor at the start that you want a default added. If they refuse, then don’t pay them anything for 6 months…
James says
Perfect I thought that thank you.
It’s insane that if you actually want to pay something then your penalised more for being in touch with them.
Matt says
Hi
Please some advice about a payment arrangement with Vanquis…
They upheld my complaint and admitted the credit card was unaffordable for me. So we’ve agreed to a payment plan to settle the outstanding balance. But they are insisting my credit file will have “ arrange to pay “ marker on it!
Is this correct or should I insist they remove everything from Vanquis on my file?
Bit confused!
Many thanks
Sara (Debt Camel) says
have they given you a refund? do you think this is fair?
and had you previously had missed payment or other negative markers on your credit record?
Matt says
Yea a full refund of interest so I’m happy so far.
No previous missed payments etc from Vanquis on my file
Sara (Debt Camel) says
How large is the remaining balance? Can you afford to make the normal repayments to clear it, if you can that is the simplest and quickest option.
But if you can’t, then agree an affordable pay,ent arrangement and send the case to the Ombudsman to get the payment arrangement marker removed.
David Hunter says
How difficult is it to set up a Breathing Space arrangement for credit card debt please?
I owe about £1500 in total (which was about £2000 two years ago) and reduced by paying over minimum payments and taking advantage of 0% transfer deals. The debt arose mostly as a result of removal expenses to a retirement village two years ago. I am a pensioner with about £13500 p.a. and a 60 day reduction in interest would help to reduce the balance owing although probably not clear it entirely. I am concerned that interest rates may rise and make it more difficult to reduce the balance owed within a reasonable period. My credit rationg has improved substantially over the past two years and I want to avoid making the situation worse.
Can you suggest any solutions? I know there are limited options. Ideally I would like a loan at a lower rate of interest.
Sara (Debt Camel) says
A breathing space can be set up for you by a debt adviser. But it doesn’t protect your credit score.
Is your score good enough to get another balance transfer?
Musa says
Good afternoon.
I want a advice I got a mortgage on my name which is up for remortgage in 2 years. I never missed any payments however I have debt of 23k but now I can’t afford anything due to living cost going up. Can you please help me what I can do With my debt I’m finding hard now to clear it
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about your options.
D says
PayPal’s cruel compound interest has meant that I am £1,800 in debt with them. I still think it’s disgusting that they brought that change in during the cost of living crisis that we all face.
Anyway, PayPal referred me to PayPlan to seek any possible help for a DMP. Unfortunately, they deemed me unsuitable and simply sent me a link to their guide for a self-help plan. This isn’t really the help that I wanted.
I am wondering if PayPal themselves can offer their own version of a payment arrangement, or if a DMP from the likes of PayPlan was my only option?
Sara (Debt Camel) says
What other debts do you have apart from this?
D says
Hi Sara,
I have no other debts, but I am currently claiming Universal Credit.
Sara (Debt Camel) says
did Payplan suggest how much you could afford yo pay a month?
D says
PayPlan didn’t suggest anything. They made me fill out a form and the result I was given was a self-help guide.
Sara (Debt Camel) says
Unhelpful!
I suggest you have a go at filling out this budget form https://tools.nationaldebtline.org/yourbudget/. Do NOT be very optimistic about your income ( if it varies) or your expenses. You want a budget you can live on for at least a year, not scrape by on for a month or two.
That will suggest how much you can Afford to offer to PayPal a month. If you think that looks a sensible figure, speak to PayPal and offer that and ask them to halt interest and charges. Offer to show them the National Debtline budget sheet. Say you spoke to Payplan and they couldn’t help.
If PayPal won’t agree, send them a complaint.
If you don’t think the budget suggestion looks sensible, talk to National Debtline on 0808 808 4000 about why and what your other options are..
Karen says
Good afternoon I’ve got a marks and Spencer credit card in August they transferred me to a debt consolidation loan after making the two qualifying payments for it sent the paperwork work off beginning of September rang a week later they said they had everything for it first payment was due to go out today not gone out rang marks up this morning they are now saying they can’t find all the paperwork and that I haven’t sent it back in time so now can’t have the debt consolidation loan just had a letter saying it’s now with Westcot credit service and that they will be in touch I’ve made a complaint to marks and Spencer over this when I pay them will I be able to set up a payment plan with them
Sara (Debt Camel) says
I don’t know.
What interest rate is this consolidation loan at?
The M&S card – did they increase the credit limit on this so that it was unmanageably high for you?
Karen says
It was interest free I was told beginning of September they had all the paperwork first payment was due to go out today now saying they haven’t received it
No the credit limit was £7200 I managed to get it down to just over £6000
Sara (Debt Camel) says
OK, well I suggest you pursue your complaint and send it to the Financial Ombudsman if it is rejected.