Bank · United Kingdom
Default notice — the date that decides what happens next
A lender cannot terminate your agreement, demand the whole balance or take the goods back until it has served this and the date on it has passed. Put right what the notice says, by that date, and none of it happens.
How serious: enforcement closeAlso called: default notice, notice of default, section 87 notice, arrears default notice
Section 87 of the Consumer Credit Act 1974 makes a default notice the precondition for the lender doing any of five things: terminating the agreement, demanding earlier payment of any sum, recovering possession of goods or land, treating your rights under the agreement as terminated, restricted or deferred, and enforcing any security.
Section 88 fixes the contents: what the lender says was breached, what is required to remedy it and the date by which — or, where the breach cannot be remedied, the compensation and the date for paying it.
That date must not be less than fourteen days after the notice was served, and the lender cannot act before it. The date is printed on the notice, and the printed date is the one that governs.
Who sends it
The lender or owner under a regulated consumer credit or consumer hire agreement — a bank, a credit card issuer, a car finance company, a catalogue or a store card provider.
A notice in a prescribed form headed 'Default Notice' and citing the Consumer Credit Act 1974; the agreement number; what the lender says was breached; what must be done to put it right, or the compensation required; and a date before which that must happen.
The deadline
the date printed on the notice — not less than 14 days after it was served
The date printed on the notice. Section 88(2) requires it to be not less than fourteen days after the date of service, and bars the creditor or owner from taking section 87(1) action before it. The fourteen days is the statutory floor; the printed date is the deadline.
If you do nothing
Once the date has passed without the breach being put right, section 87(1) lets the lender terminate the agreement, demand earlier payment of any sum, recover possession of goods or land, treat your rights under the agreement as terminated, restricted or deferred, and enforce any security.
How it escalates
- 01The lender may terminate the agreement and demand earlier payment of any sum (Consumer Credit Act 1974, s87(1)).
- 02It may recover possession of goods or land under the agreement, and enforce any security given for it.
- 03The default is reported to credit reference agencies and stays on the file for six years from the date of default.
- 04What usually follows is a letter of claim under the Pre-Action Protocol for Debt Claims, and then a county court claim.
How to respond
Below is the procedure only: what to send, to whom, and what the date does. Whether the arrears figure is right is a separate question from whether the notice is valid.
Response types
- Pay the arrearsPayment of the arrears specified in the notice · Consumer Credit Act 1974, s88
- Propose an arrangementWritten proposal for a payment arrangement
- Ask for the agreement and statementWritten request for a copy of the agreement and an up-to-date statement of account
- Say the arrears figure is not agreedWritten notice that the arrears figure is not agreed
Where and how
- The lender's online banking or account portal, quoting the agreement number.
- Royal Mail Signed For to the correspondence address on the notice, for anything that has to have a provable date.
- Ordinary post to that address, which proves nothing.
- The collections number on the notice, for arranging payment — ask for written confirmation.
What to attach
- A copy of the notice.
- Proof of any payment already made and not credited.
- A statement of income and expenditure, where an arrangement is proposed.
- Records of the payments you rely on, where the arrears figure is not agreed.
What makes it count
What counts is the breach being put right by the date printed on the notice — the lender having it, not you having sent it. No correspondence moves that date.
Common questions
Do I have to pay the whole balance?
Only if the notice says so. Section 88 requires the notice to state what action is required to remedy the breach; for arrears on a running account that is normally the arrears. Demanding earlier payment of the whole sum is one of the things section 87(1) allows the lender to do afterwards, not before.
Is fourteen days from the date on the letter?
Section 88(2) counts from the date of service, not the date the notice was written, and it sets a minimum rather than the deadline. The deadline is the date printed on the notice, which must be at least fourteen days after service.
What does the default do to my credit file?
A default recorded with the credit reference agencies stays on the file for six years from the date of default. Remedying the breach by the date on the notice is what avoids the default being registered.
Can I ask for more time?
You can propose an arrangement, and the lender can accept it. Nothing in section 88 obliges it to, and correspondence does not move the printed date.
Sources
Facts verified against the sources below on 10 September 2026.