Thread: Default Notice Tesco Personal Finance

How much is the arrears?

When you reached the agreement to pay the reduced sum, was any provision made about how any underpayments would be made up?

During the period of the reduced payments, was the loan reducing?

If you managed to get the arrears added to the loan and then paid off by increased installments, would you be able to manage the new level of committment?

Then I think that you should start off by writing to them.
Tell them that as they realise, there was never any arrangement as to how the underpayments would be dealt with and that you had assumed that they would be added to the loan and that you would be able to continue repaying but a higher rate.
Ask them if they will calculate what that higher rate would be.

(Don't forget that your new repayments would be at least your old installment rate with something on top.)

In the meantime, if I were you I would resume repayment of the original installments and tell them in the letter that you will be doing this and that you want to know from them asap what a new installment rate would be but that you are confident that you can deal with that because you are now out of the difficulties which you were in before.

Two things can happen.
They can be sensible and work with you, accept increased installments so that the loan runs for its original agreed term - and you MUST stick to it because you won't get a second chance
or
They can be stupid and simply cut you off, call it in and refuse to accept any installments at all but require full repayment.

If they do the second - and there is a good chance they might because even quite decent people like Tesco seem to get infected with mad lender's disease once they start going into the money business, you must,
keep on paying the installments at their original rate - even if they refuse to accept them. Make sure that every rejected attempt to pay is logged by you in writing,
you must then put all rejected installments into a saving account - and don't touch it
You then begin a court action against them for breach of the Banking Code and of the new FSA regs because they are obliged to discuss with you and to have regard to your interests and to deal with you positively and sympathetically.
You will need to come back to this thread if that happens and we will help you through it.

DO NOT FAIL TO PAY THE INSTALLMENTS OR GO OFF AND SPEND THEM IF THEY ARE REJECTED.