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Debt Collection Help & Advice

Debt is often described in negative terms. But borrowing money, or ‘taking on debt’, isn’t necessarily a bad thing. Manageable debts, that you can comfortably pay back over an agreed period, are often necessary in order to take that next step in life.

It’s only when debt repayments become unmanageable or unaffordable that debt becomes a problem.

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Overview

Personal debt has reached a high in the UK reaching £200bn in December 2017 due to the highest levels of borrowing since the 1980s and is predicted to keep rising through the next financial quarter. This is the result of contributing factors including the rise in inflation, stagnant wages, the continual rise in credit card rates and car loans, all which have added to an increased level of personal bankruptcies and home repossessions.

Credit card rates are now at a ten-year high with an average APR of 23%, a rate forty-six times greater than the current base rate of 0.5%. Current trends are showing that consumers are choosing spending over saving and also forsaking planning for retirement over spending in the here and now.

Experts are suggesting if the market continues in this direction it will create an unsustainable level of borrowing and could push millions more into unrecoverable debt problems.

How are debts collected?

Each lender will dictate their own methods of collecting what they are owed but each will often dictate penalties for failing to make payments and additional methods they can undertake to claim what they are owed.

If you miss payments or fail to repay the loan this will severely affect your credit score reducing your ability to attain credit in future.

Missing a payment

If you miss a payment it is important to rectify the matter as soon as possible. Your debtor will more than likely make contact to let you know you have missed your allocated payment date, the penalties it may incur, and they might also ask if there are ways they can help you to make payments easier if you have encountered a specific problem causing a temporary financial hardship.

Missing regular payments

Continuing to fail to make payments will result in a less understanding creditor. They will put additional pressure on you to make organised and structured payments. They may threaten further action. A fair creditor may offer advice as to where you can get help and advice in organising your financial affairs and making the repayments. Your account could be defaulted at this point and handed over to a debt collection agency, bailiffs or sheriff officers This will have a big impact on your credit rating.

At this point your debt could be handed over to a debt collection agency or you could be in danger of being taken to court with your debtors applying for a County Court Judgement. A CCJ can be collected by bailiffs who work for the Court and hold more power than standard debt collectors.

What is a creditor entitled to do?

Chase the debt

They can write or telephone to explain the situation and also to try to arrange a suitable outcome.

Send debt collectors

Debt collectors do not hold the power of a bailiff but creditors can choose to use them if they think they will have success in collecting payment.

Increase your interest and charges

By failing to meet the existing terms you can be penalised by incurring further penalties and higher rates of interest.

Default the agreement

If you have missed up to six payments the creditor can default the loan that will stay on your credit report for six years.

Pass the debt to a collection agency

An agency will be much more persistent in collecting payments, often in person visiting your home and workplace.

Apply for a County Court Judgement

If the courts become involved in your debt you must complete all paperwork as dictated and make any payments they request. If you fail to comply further action will be taken resulting in more serious consequences.

Issue a statutory demand

This is your creditors first step to making you bankrupt. This is not a common step and can only be issued on debts of over £5,000.

Being aware of your rights is vital to ensure you are equipped to make the best decisions should you come into contact with debt collectors, sheriff officers, or bailiffs. Find out more about what you can do in these circumstances below.

Bailiffs

Creditors 

Creditors Hassle

Sheriff Officers 

Types of debt available

There are many ways we can access financial help and take on debt; here are a selection of options easily obtainable in the current market.

Credit cards

Offered by banks and financial companies with varying rates of interest and credit limits. The borrower agrees to pay back capital spent on goods and services via monthly payments.

Charge account

A customer is allocated a credit card and credit limit with a flexible monthly repayment to include interest payments over time. Interest rates are usually higher than conventional credit cards.

Credit card budgeting

Similar to a charge account where the total is paid on a running total with a fixed monthly payment.

Personal loan

Organised through a bank, building society or financial company, for a set loan amount with often variable and generally considered high interest rates, over a fixed amount of time.

Loan sharks

Often operating without a valid credit licence, loan sharks operate a cash only operation to those who can’t find credit via reputable means. Their rates are generally extortionate and collectors often use threatening and violent behaviour when collecting payments.

Hire purchase

An agreement set up by the buyer in accordance with the seller where the debt is repaid in instalments over a given amount of time. The customer can take the goods after making the first payment but remain the property of the vendor until the final payment is made.

Store cards

Acting in the same way as a standard credit card but can only be used in specific shops or within a select retail group.

Mortgages

A mortgage is provided by a bank or building society with the sole intention of buying property. If the repayments are not made the buyer is in danger of forfeiting the agreement and losing their home.

Unsecured loan

This type of loan is based purely on the borrowers credit rating and is repaid at an agreed rate of interest by monthly standing-order repayments. Early repayment can sometimes carry a penalty.

Do you qualify to reduce your debts?

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People Helped

During 2016 CreditFix helped over 19,803 people with their debts

Trustpilot Score

Excellent rating on Trustpilot with a score of 9.3 out of 10

Combined Experience

Our Insolvency Practitioners have over 70 years’ combined experience

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