Have you received a Notice of Sums in Arrears and are unsure of what it means for you? If you have received one of these letters, you probably have lots of questions. 

We’ve answered the most common questions related to this topic. Make certain of your situation with our key information below! 

What is a Notice of Sums in Arrears?

This is a letter from your loan provider to let you know that you have missed at least two payments on your loan agreement and a sum is now due. These letters are required by law and you will keep receiving them even if you have already agreed on a payment plan to clear the arrears. 

The letter will tell you how much is due on your account and ask you to make contact with the company to discuss your options. You may be able to agree on a payment agreement plan to spread out repayments on your arrears. Before you do this, make sure you take the time to work out an accurate budget. If you don’t work out a budget first, you may end up agreeing to an agreement you cannot keep to – and end up with more debt or debts elsewhere.

Don’t worry, here’s what to do!

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What does NOSIA stand for?

NOSIA stands for Notice of Sums in Arrears and is a shortened way of referring to these types of letters. Note that if you are struggling to meet the full payment of the sum due by the date specified, there are a number of other options to tackle these arrears.

What does SNOSIA stand for?

Any subsequent letters sent is known as a SNOSIA; these have to be sent every six months from the date of the NOSIA. They even have to be mailed if you already agreed on a repayment agreement.

Is a Notice of Sums in Arrears a default?

No, a NOSIA is not the same as a default notice. Before your credit provider can send you a default notice (and within it threaten legal action), they must send a NOSIA first. 

Notice of defaults

A default notice is sent when you are in arrears and request that you pay the full sum in two weeks or more. It is the first of three communications before being taken to court.

If you cannot afford the payment by the date in the letter, there are other options and services that can help you. 

If you want to read more about a default notice, you can read about these notices here. 

Why was I sent a Notice of Sums in Arrears?

You will be sent a NOSIA if you have missed at least two payments on your credit agreement. If you have agreed on a payment plan to clear your arrears and are confused why the company is sending a NOSIA, they are required to by law. 

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Consider debt solutions

If you have to pay off your debt, you don’t just have the option of using a payment plan directly with the creditor. It may be more advantageous to use a debt solution, such as a Debt Management Plan, Debt Relied Order or Individual Voluntary Arrangement

Registered charities offer free services for some of these solutions. Or you may be required to use the services of a debt management company.

Failure to give Notice of Sums in Arrears

Under the Consumer Credit Act 1974, if a loan company does not provide the NOSIA, it will not be able to enforce the debt until the correct procedure has been followed. 

This means failure for the loan company to provide you with a NOSIA can buy you more time, which could be used to arrange a payment plan or seek support from a registered debt charity. 

What additional information should be included in the initial Notice of Sums in Arrears?

NOSIA letters are authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority states that the NOSIA must include important information, namely:

  1. Wording that explains the borrower is behind on payments
  2. Encouragement for the borrower to discuss the situation with the company and ask questions
  3. Contact information related to the loan company
  4. The amount owed and if an interest charge applies
  5. A statement of any payment plan

Note, the full details of what needs to be included by your credit company can be sourced on this FCA page. 

Will a Notice of Arrears show on my credit report?

The NOSIA does not show up on your credit report because this is a legal letter the loan provider has to send. However, as you are only given one of these letters after two payments have been missed on your account, the missed payments will be registered on your credit history. 

Does an arrears notice affect credit score?

The NOSIA doesn’t affect your credit score, but the fact you have missed two payments will be registered and will somewhat damage your credit file. Decreasing your credit score may make it harder to take out a loan or get other credit in the future. 

You can check your credit history by using a credit reference agency website. You may need to make a free account to access your account for 30 days, but remember to cancel in case they charge you after the 30 days. The 30-day trial typically applies to new users only. Only use a genuine website that is registered in England and Wales and authorised and regulated by the Financial Conduct Authority to offer their services. 

Get free advice regulated by the Financial Conduct Authority!

Even if you now know more about a NOSIA, you might want to take advantage of additional information and personal support. There are a number of debt advice services that can explain processes in plain English – and offer you debt solutions in addition. 

Consider getting in touch with an authorised and registered charity; you can usually find free phone numbers on their website. 

And you are always welcome back to our site read guides and articles on MoneyNerd. We’re answering the most common debtor questions and providing easy-to-follow information on legal debt processes.

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*Note: This is a real life example based on a customers’ savings data in October 2020.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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