Finance & Defaults on Your Credit File

This can be a super tough situation to contemplate.

Defaults can be brought about by a number of reasons:

  1. Loss of Income
  2. DV Relationships where one person controls the finance
  3. Loss of Employment
  4. Illness
  5. Caring for Family, unable to work
  6. Incarceration, or a lengthy time away from family for other reasons (Visa issues)
  7. Other unique situations
  8. Forgot to Pay – very common

Some debts are just plain silly.  Like the time you moved house and told your electricity company you were moving, and they connected their service to your new house ….. but the electricity sent the bill to the old house.  Not everyone redirects their mail, & this is often not spoken about.  Maybe back in the old days when you use to have Sunday lunch at your parents, and you discussed everything that was going in on your life.  Life changes over time though, and we may not be as connected to our families as we may like. Changing family dynamics, conflict, and other reasons may be the cause of this.

Either way, having a default on your credit file can cause problems for lending.  What do you do?  Well there is a strategy you might like to implement.  Some ideas might be:

  • Pay off the default over time
  • Pay a lump sum of the default but negotiate a very generous discount in your favour
  • Negotiate to have the default removed from your file BEFORE you pay the debt.  Make sure you get this in writing
  • Discuss your loan situation with us – we will be able to help with which debt needs to be paid and which debt doesn’t
  • Remember that some debts may be that old that they can’t be collected
  • Financial Counsellors – worth their weight in gold, and can help you work through your situation
  • Consider having your Credit File cleaned up, subject to the reasons behind the default in the first place

If you need help to review your situation or would like to be referred to a Professional to assist you further (eg Financial Counsellor), please contact us and we can help you further.