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Debt FAQs
The following is a collection of questions that
have frequently been asked about debt and what to expect.
Is my credit rating going to be affected?
Yes. Whilst you are repaying your debt you will most probably not
be able to borrow more money from any lender who uses credit checking
before lending money. A note will be put on your file informing
lenders that you have unpaid debts and this may prevent them from
wanting to lend you more money.
How
to check if I’m blacklisted
I am Being Threatened With Court Action –
What Can I do?
If you are struggling to repay your debt and a creditor feels
that you are not making a reasonable effort to repay, they may ask
the local County Court to become involved. The Court will review
your circumstances and make a judgement about how much you are able
to repay your creditor (normally on a monthly basis). Most creditors
will not pursue this action until they believe there is no other
way to make arrangement of repayment with you.
If you are threatened with court action, do not panic! Always take
advice about making a sensible offer of repayment. If you have already
been issued with a County Court Judgement (CCJ) and believe that
it is unreasonable, again take advice. It may be possible to reduce
the amount you are being asked to pay.
Useful
Contacts
How do I go about getting help?
There are many different organisations that offer debt advice
and practical help. The help you need will depend on your individual
circumstances.
Get free advice in a face to face meeting
Arrange for a debt consultant to visit you for free and explain the
options.
Free home consultation - Other debt solutions from Thomas Charles
Look here for choosing the right solution for you.
Click here for available solutions
Look here for details of organisations who may be ably to help
you, depending on your need Useful
websites
Will I lose my house?
Property repossession can only ever occur if you do not maintain
your mortgage payments or any payments on loans which are specifically
secured against your property. For this reason it is vital that
you maintain your mortgage and secured loan payments over and above
any other debts.
If you have started to miss mortgage or secured loan payments,
do not panic. Property repossession does not happen overnight. However,
you should obtain advise as soon as possible.
Click here for companies that can advise you
Will I be able to get a mortgage or credit in
the future?
Yes – there are companies who will even lend you money
whilst you are in debt, however this is normally not advised and
must be carefully considered. Once your debts are cleared, you will
then have the freedom to borrow again as normal.
Do many people get into debt?
Yes. Surprisingly, hundreds of thousands of people in the UK today
have debt problems that they cannot support, for many different
reasons. Look here for some other people’s debt stories.
Typical
Stories
How long will it take to get out of debt?
This will depend on how much you owe and the solution you use to
manage the problem. If you are involving a 3rd party for help, i.e.
a Debt Management Company, always ask how long will it take to be
free of the debt.
Click here
to see available solutions
Will bailiffs come to my door?
It is possible bailiffs will come to your door if you ignore the
problem and a visit is the only way to make contact with you. If
you take proper advice and get help then there is no reason
for it to get to this stage.
Who needs to know that I am in debt?
Debt is a private matter between you and your creditors unless
you take the bankruptcy option. Otherwise, in general you are under
no obligation to tell anyone other than your advisor and the creditors
themselves.
How much will help cost me?
This will depend on the solution that best suits your situation.
Always ask your debt advisor what the charges will be, if any.
How long will it be before I can borrow more money if my credit file is affected?
With unsecured lending e.g credit cards and loans etc, you will
not be able to borrow until the original debt or agreed amount is
paid in full.
With secured lending e.g mortgages, car H.P agreements etc, you
may be able to borrow on this basis but it is not always advised.
It is advisable however if it is part of a debt repayment plan (i.e
re-mortgaging your house to realise some equity to repay your debts)
What action can creditors take against me?
Firstly creditors will write to you and/or telephone you demanding
payment. (They may charge you for late payments and administration
fees). They may also freeze your account in debt (bank, catalogues,
store-cards etc) so that you cannot use it anymore.
If you have not paid after being chased, then they may issue a
default notice.
If you still haven’t paid then they may involve an external
debt collection agency. The debt collection agency will write and/or
call you to chase the debt and they may charge you for this. They
may threaten you that your credit file will be affected and they
may also threaten to take you to court.
If after this you haven’t paid then your account may be passed
to a solicitor who will also chase you to pay the debt. The solicitor
may then initiate proceedings to issue a County Court Judgement
against you.
If you still haven’t paid after the issue of a CCJ then the
court could contact your employer and get an “Attachment of
Earnings” order, which will deduct payments directly from
your wages. You can appeal if this deduction is too high –
details of how to appeal will be provided with your notification
from the court.
Could I lose my job for being in debt?
Normally no, but there are some employers who include a clause
in their employment contracts referring to personal debt (this is
typically in the financial services sector). Check your own Contract
of Employment to see if any such clause appears in yours.
Will I go To Prison for being in Debt?
No. Under normal circumstances, you will not go to prison because
of debt. The problems of debt are dealt with under Civil Law. This
means that the creditor who is owed money may be able to levee financial
penalties onto the debtor e.g. increased interest charges. However,
the penalty of a prison sentence can not be applied.
There have been a few instances in the past where individuals have
avoided the payment of Crown Debt such as Poll Tax Payments
and Income Tax evasion with criminal intent. In these instances,
prison sentences can be issued by the court.
Essential Info
Essential Info: Debt
Essential Info: Types
Essential Info: Debt Causes and Circumstances
Essential Info: Debt FAQ
Essential Info: Money
Essential Info: Debt Dos and Don'ts
Essential Info: Blacklisted
Essential Info: Debt Instructing
Essential Info: Debt Negotiating
Essential Info: Debt Negotiating Tips
Essential Info: Budgeting
Essential Info: Credit
Essential Info: Loans
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