Default notices – what are they and what do they mean?

posted by in Living with debt

Letters demands

You keep getting letters, but what do they mean?

Receiving a default notice through the post can be quite stressful and not knowing what this means can add to the pressure you’re already under. Let us help put your mind at ease and explain what it actually means.

A default notice is a formal letter which is usually sent after three to six missed payments. They can only be issued for debts that are regulated by the Consumer Credit Act.

There are several things that it should include:

  • The type of agreement
  • The agreement terms that have been broken
  • What you should do to put the account in order (how much you need to pay and by when)
  • What the creditor will do if you don’t comply with the request
  • How long you have to respond (this should be a minimum of 14 days)

It should also include an information sheet from the Financial Conduct Authority with guidance on what to do and how to get free debt advice. We’re listed on there.

They usually ask for a lot of money within a short period of time, something that’s impractical for most people to afford.

If you’re not able to meet the requirements of the default notice, the account is usually cancelled and you can no longer use the credit facility. Creditors will not always take further action listed in a default notice but they are legally entitled to if you don’t comply with the terms.

The creditor can also:

  • Demand the balance in full
  • Sell or pass the debt to a collection agency
  • Start court action
  • Start proceedings to repossess anything that forms part of the agreement (for example a car that is part of a hire purchase agreement)

The creditor can only carry out these actions after the account has defaulted. If you pay back the amount stated within 14 days, no further action is taken. If future payments are missed a default notice can be issued again.

We often hear from clients that haven’t received a default notice and their creditor has taken further action. It’s important to remember that the notice is considered served if the creditor has sent it by post to your last known address. It can be difficult to prove whether this was sent or received.

How will it affect you?

Default notices are recorded on credit files and usually remain there for six years. This could affect your ability to obtain credit in the future.

If the default was issued by mistake or you made the full payment within the time period, you can ask for it to be removed from your file.

To do this you would need to write to the lender including your account details and proof of why you think the information needs to be removed. You can also contact the credit reference agency but they would usually need to confirm it with the lender anyway (which can take more time).

If you don’t get a satisfactory or timely response within 28 days you can put in a complaint to the Information Commissioner.

You can read more about default notices on our website.

If you’ve received a default notice, it’s important that you contact your lender and make an affordable arrangement to repay the debt. You can use our online Debt Remedy tool to help you do this.

If you’re already on a debt management plan (DMP) with us and you receive a default notice, it’s important not to panic and stick to the agreement you have with us. If you’re unsure, just give us a call. We’ll be happy to help.

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Pavan Gata-Aura is a qualified debt advisor with 6 years of experience. She enjoys spending time with her two children, fundraising for charities, has spent time volunteering in Africa and takes part in organised races.

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Tags Living with debt
  • liam

    Hi, due to some unfortunate events i had a default placed on my account from Vodafone, but i never received a default notice and today when i spoke to customer relation’s at Vodafone they did not have it on there system they had sent one. there argument is i never cancelled the contract (long complicated story) but if i was issued with a default notcie i would settled this before it was placed….. do i have a case?

    • moneyaware

      Hi Liam,

      Thanks for posting. I’m sorry to hear about this.

      If a debt is regulated by the Consumer Credit Act (CCA) then the creditor (for example a credit card company or bank) will need to send you a default notice before defaulting an account.

      We’d suggest checking the agreement you signed for the phone contract, or contacting the phone company to ask them to confirm if the agreement was CCA-regulated.

      If it is regulated, they have to issue a default notice and allow a minimum 14 days to comply before they can register a default. In this situation you could file a formal complaint with the phone company about what’s happened.

      If it isn’t regulated, they can record a default on your credit file without a default notice, typically if 3-6 months of payments are missed.

      You can find out more about making a complaint about a creditor here:

      I hope this has helped,


  • Fishy

    My partner has a car finance agreement that went into default. I spoke to them on her behalf and agreed a repayment plan with them to cover the arrears as well as maintain the regular monthly payment. She has a immobiliser box on the car and they do immobilise the car if the payment is not made. My question is, if the account is in arrears but under an agreement of payment, and they issued a default notice in January, Can they use that default notice to immobilise her car without further notice instead of issuing a new 14 day notice?

    • moneyaware

      Hi there,

      Thanks for posting.

      The finance company’s ability to immobilise the car will depend on the original agreement. There should be some wording about the circumstances where they’ll use the immobiliser.

      Having said that, just because the agreement says they *can* doesn’t mean will use this. If an agreement has been arranged with them and they’re happy with it then it would be strange for the company to change their mind without notice.

      It may be worth speaking with the finance company directly to check their policy around this.

      Kind regards


  • Sina Shahidi

    I have just found out that my credit report is showing “You have had at least one account in Default or Repossession (ARROW GLOBAL LTD, JOHN LEWIS FINANCIAL SERVICES LTD and 2 more)” , I don’t recognise any of these companies and I’ve never had any account with them and above all I have never ever missed a payment of defaulted on an account! It sounds like someone has used my name fraudulently. Can anyone tell me what should I do?

    • moneyaware

      Hi Sina

      Thanks for your comment and sorry to hear this.

      If you review your credit report and find that there are errors, you can contact the credit reference agency or the lender involved to have incorrect information corrected or removed. This is important because mistakes on your report could prevent you from being able to obtain credit in the future.

      You may be able to remove:

      Debts taken out in your name that are fraudulent (i.e. not yours)
      Financial associations such as out of date or incorrect financial connections
      If you think that you may have been the victim of fraud, contact the police or Action Fraud ( and inform the CRA and the lender.

      I hope that this helps,


  • Becky

    I have direct debit of £10 every Wednesday going out the company I owe money to but this Wednesday they did no take it. So I went on my credit report to see if there was anything on there and they have put me in default without any warning or trying to contact me. Can they do this ? Is there anything should say when I ring them? When looking online they should have contacted me and given me 2 weeks to sort the debt before doing this but it only should have been done after 3/6 missed payment which I have not misses I payed them last Wednesday.