A typical payment arrangement is an agreement to repay a credit card, catalogue or loan in affordable monthly amounts. This is also called an arrangement to pay. The key points are: an arrangement is needed if you can't afford the normal debt repayments; do not offer more than you can afford; ask the lender (or the debt collector) to freeze interest and not add any charges; it … [Read more...]
Dealing with creditors
If you can't make the standard monthly payments to your loans or credit cards, you need to talk to your creditors. Ignoring the problem or trying not to deal with creditors usually makes things worse, so don't be an ostrich!
Here are articles that looking at how you can approach your creditors and how they are likely to respond. If you don't feel you can manage this, then talk to a good Debt Charity such as National Debtline or StepChange - avoid firms that advertise as they are trying to make money from you.
If interest is frozen on your debts, you will be able to pay them off much more quickly. But what if a creditor refuses to do this? Or has been adding interest and charges for years, even though you are in a DMP or they know you are in financial difficulty? This article has template letters you can use to ask the creditor to change their mind and stop adding interest and charges. And to ask … [Read more...]
A few readers have asked recently about long term debt payment arrangements. What information do they have to give to a debt collector? Can they can be asked to pay more? etc. Let's look at three different cases: an arrangement with a creditor; what happens if you use a DMP firm; and what if the payment is to a CCJ. Arrangement with a creditor Mr A asks: I have had an arrangement … [Read more...]
This is a guest post by Tax Aid, a charity that helps people on a low income with tax problems. If you can’t afford to pay a tax bill when it is due, you will often want to make a “time to pay” arrangement with the tax man. You may be asked questions that feel very personal, such as what your expenses are – this is because HMRC is more likely to make an arrangement with someone who they feel … [Read more...]
If its been four or five years since you stopped making payments to a debt and you haven't had any phone calls or letters for a long while, you may be hoping your debt has got lost or the debt collector has forgotten about it. This article looks at what is likely to happen as in 2018 debt collectors are taking more people to court for CCJs than they used to. If you have been making payments, … [Read more...]
If you are very worried about your debts, you may be wondering how easy it would be to disappear and leave them all behind. Will your old records be linked with new ones on your credit records? Can your creditors find you if move, go abroad, change your name? This is an increasingly common problem with many EU citizens thinking of leaving because of Brexit. Some of these sorts of ideas … [Read more...]
A reader asked if he should offer a token payment to his debts, wondering if his creditors would ever accept it. The simple answer is that you should make token payments offers IF it is all you can afford AND you expect your situation to improve at some point. Let's look at how your creditors are likely to react and the questions people often ask. What is a token … [Read more...]
Creditors and debt collectors can phone you about your debts and ask you to pay the money you owe. But too many calls are unreasonable and can cross the line into harassment, which is illegal. If you are being phoned too often by debt collectors, there are practical steps you can take to stop it. How many is "too many"? In this news story, a man kept a record of over 700 calls from MBNA … [Read more...]
Even a "mild" problem with depression, anxiety or other mental health issues can make it harder to manage debts - reading letters, taking decisions, managing deadlines and dealing with creditors may feel like impossible tasks. This isn't just credit card and loan debt. Citizens Advice research found that people with poor mental health were more than twice as likely to be behind with bills such … [Read more...]
Most people use a firm to run their Debt Management Plan (DMP). In this case you make one monthly payment to the firm, who then divides it between your creditors. But you don't have to use a firm - you can do all this yourself. A reader commented that they liked the idea of being in control, and not having to explain their finances to a DMP firm every year, but would this be a lot of … [Read more...]