Difficulty Paying Your Debts?
We can assess your ability to pay your debts, write to your creditors to agree a repayment schedule, advise if you are eligible for Welfare Benefits which may help your financial problems and contact others such as Court Bailiffs and Local Authorities on your behalf.
If you are behind with your payments (eg. to the mortgage or hire purchase company) we advise that initially you contact them direct to explain the situation.
Note that you are still liable for Mortgage Arrears even if your property has been repossessed and sold by the mortgage company if the mortgage company didn't recover all that you owed by selling the property. They can claim against you for up to 12 years after the property was sold. Even if you had left the property and the arrears were later caused by another joint owner, you are still liable as you are "jointly and severally" liable for the repayment of the mortgage. However, the Mortgage Company may be prepared to accept a greatly reduced lump sum in order to clear the debt.
REMEMBER: they want your money with the least inconvenience to themselves; if simply reducing your repayments or waiting a while longer will solve your problem (and theirs!) they are likely to agree but you must tell them first!!
Debt Consolidation Loans
Beware of the "home-owner loans" being advertised on TV which claim to offer a quick solution to outstanding debts. Most debt counsellors advise against such loans which usually have several disadvantages:-
- They usually charge higher interest rates than high street banks or building societies;
- Their payment protection insurance may not cover you if you are sick or made redundant;
- If you fail to keep up the payments your house may be repossessed (that's why they stipulate that you must be a "home owner", because the loan will be secured on your home).
Bailiffs
Much mythology surrounds the use of Bailiffs and Warrants of Execution which seem in some eyes to be all-powerful instruments. This is not quite the case:-
- A Warrant can only take effect after a Court Judgement has been obtained (although different rules apply for business leases);
- The Bailiff cannot force his way into your property - he can only come in if you allow him in; he can only take possession of goods belonging to the person who owes the money (not those of other occupants); he might decide that there are no goods of sufficient value to pay off the debt and therefore not take anything (eg. TVs and videos have a poor second-hand value); and the Bailiff will often advise you whether an offer of reasonable payment is likely to successfully persuade a Judge to suspend the Warrant under which the Bailiff is acting (most actually carry the necessary forms to make the application for a suspension, which costs £30.00).
Failing a negotiated agreement directly between you and your creditors, we will be able to help but we require a considerable amount of information in order to give you the best advice:-
Income
- Your total income and its source(s);
- Your partner's income;
- Any Welfare Benefits your or your partner receive;
- Details of capital assets you own
Expenditure
- Your rent/mortgage;
- How much Council Tax you pay;
- How much you pay for water, electricity, gas, coal etc.;
- Your insurance (life/house/contents) costs;
- Your Telephone, TV and video expenses;
- How much you spend on food, housekeeping, clothing etc.;
- Your travel expenses (car, bus etc.);
- Your health costs (prescriptions, dentist, opticians etc.);
- Your child care expenses or maintenance payments;
- Your credit/loan repayments;
- Whether you have to make payments under a Court Order
You may find that simply listing all of the above sources of income and expenditure may help you identify areas where your expenditure can be reduced to assist your financial situation.
Legal Help may be available.
Further information and advice
For further information and advice about debt we recommend the following sites:-
- National Debtline - a Helpline that provides free confidential and independent advice on how to deal with debt probems;
- Debt Advice Foundation - a registered UK debt advice charity offering free, confidential support and advice to anyone worried about debt. Their website includes a number of tools and practical guides to assist you.
Debt Advice Calculator - this free Personal Debt Analyser from Debt Advice Foundation tells you:-
- how much you can reasonably afford to pay back each month
- how long it will take you to pay back your debts in full
- how to negotiate with your creditors
Difficulty obtaining credit?
If you find you are having difficulty obtaining credit this may be due to a bad credit reference against your name and/or address. Obviously, if you are in debt the best approach is to clear your debts first. Then send a copy of the satisfaction of any judgement to the Registry Trust at:-
Registry Trust Ltd,
173-175 Cleveland Street,
London,
W1T 6QR
Tel.: 0207 380 0133
web: http://www.registry-trust.org.uk/
If you feel you are being unfairly blacklisted, perhaps due to the poor credit record of previous occupants of your address or a mistake, you should write to the company refusing you credit asking where they obtained the information. In most cases the source will be a credit reference agency, which you can then write to explaining the error and requesting a copy of the information they hold. The information can then be corrected when found to be in error. A small fee is often payable for this.
Check your Likely Credit Score
This free credit score checker from Money Saving Expert will enable you to check your likely credit score and identify any areas of weakness. Visit the Money Saving Expert credit rating page to use the credit score checker.
Debt Collection
If you are owed money by someone else and all efforts to reclaim the money have failed, we can commence Court Proceedings on your behalf. Before we do this the accepted procedure is to write a Letter Before Action to the Debtor seeking repayment of the money due within a specified period (usually 7 days).
If there is no payment within the specified period, Court Proceedings would then be issued.
We would require from you:
- full details of the contract;
- amount outstanding;
- details of any agreement regarding interest payable
We will also require from you a payment on account of costs of sufficient funds to pay the Court Fee (which varies depending on the amount claimed - see the Court Service Fees page) and at least £300.00 towards our costs unless LSC Funding is available for your case.
If the claim is for less than £5,000.00 then proceedings must be brought in the Small Claims Court. You will not be awarded your costs, even if you are successful. You will, however, still be liable for our costs which will vary depending on the amount of work carried out, irrespective of whether your claim succeeds or not.
Even if you obtain Judgement against your debtor, you will still need to enforce that judgement and this can be undertaken by the following methods:
- Warrant of Execution against the assets of the debtor - a Bailiff will seize assets to sell to pay the debt;
- Examination of Means - the debtor is ordered to attend Court to explain his finances;
- Attachment of Earnings - the debtor's employer will deduct money from the debtor's wages to pay to you (this will be done by instalments);
- Garnishee - If the debtor has any money in a bank account the Court will order it to be paid to you;
- Charging Order - like a mortgage placed against the debtor's house, but to realise the funds the property would have to be sold and your charge would rank behind pre-existing mortgages in priority.
We will advise you on the most appropriate method to use. However, if the debtor is in receipt of State Benefits, is not working and lives in a tenanted house the chances of recovering any substantial amount of money are pretty remote!!
Please note that we do not undertake commercial debt collection.
