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Removing outstanding balances?


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We ran into difficulties with a business failure in 2002 (key employee over 65 not covered by key employee insurance, who then was told by his doctor to stop work immediately). We ended up selling our house to pay off all the business liabilities and it's secured loan. Followed by long term unemployment, then First Direct withdrawing banking facilities to pull in our personal (small) overdraft a week before I got a job again. Then last-in first-out laid off a year later, another long period of unemployment, and finally went bankrupt. I now have a long term, stable job and we've been discharged for a year now.


We're content that the Bankruptcy is logged on our credit file - that is what happened. However, virtually every one of our old creditors (and DCAs downstream of them), despite them all knowing about our status from both ourselves and the OR, continue to log a "defaulted account" with a full outstanding balance still due every month. We've just (before I discovered this site and read the excellent sticky notes!) written to them requesting the outstanding balances on each to be set as zero and their status to be reset at the time of the original default or date of our bankruptcy.


In the final analysis, i'm not trying to remove any fact in the credit file that's accurate; just to leave the big "public record" stain at the front and to acknowledge the correct dates plus zero/satisfied outstanding balances. I'm also asking Eversheds to remove the duplicate entry they've inserted this year (showing an outstanding balance from M&S in 2002) since M&S Money was bought by HSBC earlier this year... and our M&S records remain there also.


Two questions:


1) Does a bankruptcy allow a creditor to reassign their loan contract with you to a DCA without your permission - with the "will pass data onto CRAs" term intact?


2) Everyone bar FirstDirect appears to have set the default date as the original one in issued in 2002; FirstDirect have reset their default as now taking place one month after our bankruptcy 3 years later. Can I compel them to backdate this to the date of the original (and only written one we received) default?


Any guidance/views would greatly help us. Thankyou

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Hi Jim


As far as the dates go, and what should be processed, this information might help:


On my credit reference file there is a default for a debt which was included in my bankruptcy. Is this right?

Yes. If a debt has been included in your bankruptcy, the creditor should have marked the account in default. The default will stay on your credit reference file for 6 years from the date of the default. After you have been discharged from your bankruptcy you can send proof of your discharge to everyone included in your Statement of Affairs. Those people whose debts were included in your bankruptcy should then mark the entry on your credit reference file to show that you no longer owe money on that account (perhaps by marking the entry as ‘satisfied’ or ‘settled’ or in some other way). However, the default will not be removed from your credit reference file until 6 years from the date of default. If you wish, you can ask the credit reference agency to add a statement called a ‘Notice of Correction’ to the default entry. In your statement, you may like to say that the entry was included in your bankruptcy. More information about ‘Notices of Correction’ can be found in the ‘Credit Explained’ publication.

I’ve noticed that a debt that was included in my bankruptcy is marked in default later than my bankruptcy. Can I do anything to change it?

Sometimes a creditor will not know the exact date you were made bankrupt. This may mean that when the creditor registers a default with the credit reference agencies, the date on the default is later than the date on your Bankruptcy Order.

If a particular debt is included in your Statement of Affairs at the time of your bankruptcy, you can ask the creditor to change the date of the default to the date on your Bankruptcy Order. To do this, you should write to the creditor and ask them to change the default date to the date of the Bankruptcy Order.

Remember to send the lender a copy of your Bankruptcy Order or other documentation which confirms the date you were declared bankrupt.

If the lender refuses to change the date of the default then you can write to: Information Commissioner, Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9 5AF. You will need to send them a copy of the Bankruptcy Order/ documentation that confirms the date you were made bankrupt, proof that the debt in question was included in your bankruptcy and a copy of the lender’s letter which says it won’t change the date of the default.


You can see this and other info on this page from the Insolvency Service.


HTH :)





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