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Creditors can take action against you if you stop paying your debts

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What are creditors?

Any person, organisation or government body that is owed money is a creditor, having provided goods and services to a separate entity. It is possible that interest will be charged on money, whether that’s on credit card payments, bank loans or something else.

If you fall behind on debt repayments, it’s likely that your creditors will take action to get you to settle your debts. They typically contact debtors by letter or phone, or they may visit you at home.

Key facts about creditors
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Letters are the main way creditors get in touch if you miss payments. Open these letters immediately

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Contact can become more aggressive and threatening as time goes on

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Accounts are often passed to the collection department after just a few reminders

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You may be served with a default notice and then receive letters from debt collectors

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Keep a record of all letters and other communication from creditors for future use

What creditors can do

CCJs (County Court Judgements)
  • Court action can be taken to get a county court judgement against you to get you to pay back what you owe
  • Judgement records are kept for six years unless the full amount is paid within a month
  • If you can’t afford to pay the money owed, you can ask to vary the terms of the judgement and/or pay it back in instalments
  • If you receive a judgement, don’t ignore it, as you could be taken back to court and forced to pay
May deduct money from your earnings
  • Creditors for bank loans, credit cards and so on can get a court order to take money from your wages
  • In order for them to do this, they must have already issued a CCJ against you
  • Contact your creditor immediately if they apply for an attachment of earnings order to see if you can agree to a payment plan
  • Consider seeking free and impartial debt advice
Take money from your bank account
  • Third party debt orders can be applied for that allow creditors to take the money owed to them directly from whoever has it
  • Creditors can also get insurance companies, solicitors and employers to pay monies to them if you’re due a redundancy settlement or receive an inheritance, for example
  • Typical debts include personal loans, credit cards, hire purchase agreements and overdrafts
How can debt management plans help?
  • Debts can be consolidated so you only have to make one single payment per month
  • The amount you pay is based on your disposable income, so you pay back what you owe at an affordable rate
  • We propose a repayment offer to your creditors which is affordable for you
  • Avoid taking further credit during your plan if possible, as this could risk you falling into further debt

What Bailiffs...

  • Court action can be taken to get a county court judgement against you to get you to pay back what you owe
  • Judgement records are kept for six years unless the full amount is paid within a month
  • If you can’t afford to pay the money owed, you can ask to vary the terms of the judgement and/or pay it back in instalments
  • If you receive a judgement, don’t ignore it, as you could be taken back to court and forced to pay
  • Creditors for bank loans, credit cards and so on can get a court order to take money from your wages
  • In order for them to do this, they must have already issued a CCJ against you
  • Contact your creditor immediately if they apply for an attachment of earnings order to see if you can agree to a payment plan
  • Consider seeking free and impartial debt advice
What Bailiffs...
  • Third party debt orders can be applied for that allow creditors to take the money owed to them directly from whoever has it
  • Creditors can also get insurance companies, solicitors and employers to pay monies to them if you’re due a redundancy settlement or receive an inheritance, for example
  • Typical debts include personal loans, credit cards, hire purchase agreements and overdrafts
  • Debts can be consolidated so you only have to make one single payment per month
  • The amount you pay is based on your disposable income, so you pay back what you owe at an affordable rate
  • We propose a repayment offer to your creditors which is affordable for you
  • Avoid taking further credit during your plan if possible, as this could risk you falling into further debt
What are your rights with creditors?

While creditors are allowed to contact you to collect unpaid debts, they must act reasonably and within the law when pursuing money for collection. Creditors have to take reasonable steps to ensure that they are treating their customers fairly when recovering any money that is owed.

The majority of creditors will operate within the law and will show understanding to their customer's circumstances but it may get to the point where you feel overwhelmed by the amount of contact you receive. In this instance, it could prove beneficial to seek independent and impartial debt advice to help you deal with your creditors.

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Why choose Fresh Start UK?

Fresh Start UK has helped more than 12,000 people gain control of their finances and become debt-free. If you’re struggling with debt and finding it tough to keep up with your bills, speak to an advisor today.

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Final points to consider

As a leading Debt Management Company, Fresh Start UK deals with thousands of cases each year and is able to provide our clients with confidential advice to prevent debts from becoming insurmountable. Get in touch with us today to find out more.

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Money Helper has replaced the Money Advice Service and brings together the support and services of three government-backed financial guidance providers: the Money Advice Service, the Pensions Advisory Service and Pension Wise.

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