Notice Of Default
A formal letter from a lender sent when you fall in arrears. The notice sets out the arrears and what you have to do to put things right, within 14 days. Failure to respond to a notice of default results in a default, which appears on your credit file for six years, irrespective of whether you subsequently pay the account in part or in full.
The notice is required before creditor (lender) can take any of the following five actions: terminate the agreement, repossess goods or land, demand earlier payment of sums due under the agreement, treat as restricted, terminated or deferred any of the debtor’s rights under the agreement and enforce a security.
It applies to all types of breach of a regulated agreement, not just default in payment and is only applicable where the creditor intends to take one of the five types of action. A simple reminder not threatening one of these actions is not a Default Notice and not governed by Consumer Credit Act 1974.