Creditors will generally agree to accept payments rather than take court action. Even when you can offer no payment because you haven't any money left for credit debts, your creditors may still be prepared to freeze your account until things improve.
If your creditors agree to accept your repayment offers, let them know the most convenient way for you to make payments. This could be by standing order, direct debit, by payment book or by asking someone to call and collect.
What if a creditor refuses the offer?
- Do not agree to increase your repayment offer unless you are sure you can afford to do so
- Keep aside the money that you would have been using to pay the creditor if they had accepted your offer. Write again to ask the creditor to reconsider. If the creditor agrees this time, you can send the money you've kept back
- If the creditor won't accept your payment get help from a Debt Adviser
Remember! Creditors cannot send bailiffs round or have money deducted from your earnings without a Court Order. If your creditor does take you to court, it is unlikely that the court will order you to pay more than the amount you have already offered, if this is all you can afford. A Debt Adviser can help you work out 'fair and equitable' repayments that will satisfy the court.
What if my debt is passed to a debt collection company?
If your payment offer is low, you may find your creditor refers your account to a collection agency. Don't worry, most debt collection agencies are reasonable. They are used to dealing with people in debt and will generally accept payment offers, even where these are low. Debt collection agencies should be contacted and dealt with in the same way as your other creditors.
If you do experience problems with a debt collection agency, get help from a Debt Adviser.
What if my creditors continue to add on interest?
If you are paying less than the amount of interest being added to your debt, the debt will continue to grow. You should ask the creditor to stop charging you any more interest. Generally, creditors will do this in such circumstances. If they refuse, get help from a Debt Adviser.
What if my creditors put pressure on me to pay more than I can afford?
People you owe money to are allowed to ask you to pay it back, but it is a criminal offence for them to harass you by, for example:
- Ringing you late at night
- Ringing you repeatedly at work
- Telling you that it is a crime to owe money
Never be pressured into paying more than you can afford - it just means that you won't be able to pay something more important. Choose to deal with your creditors in writing if you think this will be easier than talking to them.
If you feel that you are being harassed, keep a record of every incident of harassment and then contact Manchester Trading Standards (Tel: 234 1555 - Manchester residents only) or, in extreme cases, the police.
What if my creditors ask for a review?
It is quite normal for your creditors to write to you after 3 months or so. They will ask whether your circumstances have changed and if you can afford to pay more.
Write back and let them know your current situation. If you previously sent a Personal Budget (external website), send an updated copy. Remember to change any relevant figures where you have been making repayments.
Do not offer to increase your repayments unless you now have more money coming in and you can afford to do so. Get help from a Debt Adviser if you are not sure.
Can I get credit again?
You should think carefully about trying to get credit again before your debts have been repaid. You might risk getting into more debt or you might end up getting a loan with a very high interest rate. Talk it through with a Debt Adviser if you are not sure.
There are Credit Reference Agencies (external website) that keep records of some unpaid debts and there is a register of all County Court Judgments (external website). Most companies will check these before they decide to give you credit. If you ask, they must tell you which Credit Reference Agency they have used.
You can get a copy of your record from the Credit Reference Agency in seven days by paying a small fee. If the record is wrong you can get it changed. When you pay off a County Court Judgment (external website), you can have that record changed as well.
The creditor is threatening court action
Sometimes creditors will threaten you with court action but will have no real intent to go down that road. Even if your creditor takes you to court, it is most unlikely that you will be ordered to pay more than the offer you have already made if that is all you can afford. The court will realise you cannot afford to pay more. Write to your creditor to tell them this and to ask that they accept your offer.
Information on other websites
Adviceguide from Citizens Advice
Help with debt
National Debtline
Library of information about dealing with debt
Equifax
One of the main credit reference agencies
Experian
One of the main credit reference agencies
Need more help? Live in Manchester? Send us an email
Information Provider:
Manchester Advice
Date Written:
8 April 2005
Date Reviewed:
10 November 2008
This information is for guidance only and is not an authoritative statement on the law. Please read our Terms and Conditions.
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