Do these apply to you?
Enforcement Action
Demands for Repayment
One of the most worrying things about financial problems is getting demands for repayment through the post.
Creditors are entitled to make reasonable demands for repayment. There are a number of steps that they are obliged to take by law before they can attempt to recover money. However many of the letters that are sent out are poorly worded and threaten legal action and further steps that may not be applicable.
Some letters will say they are 'pre-legal' or 'pre-court' but they are NOT legal documents. They are simply stating the creditor's intention (which is not always acted upon) to take action if full payment, or a reasonable offer, is not made.
A 'default notice' is a genuine pre-legal document which most creditors must issue before they can take any steps to recover the debt in the county court.
It is important to note that at this stage it is still possible to make an offer of payment, as shown above. The default notice also contains a paragraph that advises you to see help from a CAB or Law Centre.
Debt Collectors
Many creditors appoint debt collectors to recover money owing to them. Even if a debt is being collected by a debt collector they are still only entitled to ask for reasonable repayments which should take into account someone's ability to pay.
Debt collectors can be negotiated with in exactly the same way as set out above. They have NO legal powers to enter your home, take goods etc and they cannot use bailiffs without a court order.
Complaints about creditors and 'harassment'
Creditors' letters telephone calls and visits can sometimes create a strain upon a person in debt, and there may be occasions where these can become intrusive.
If you are taking responsible steps to deal with your debts and you are still getting letters and calls, you may wish to make a complaint about the creditor or collector.
If this is happening to you, take the following steps:
- Write to the creditor, explaining the steps you are taking to resolve your debts.
- If you feel you are getting too many letters or calls, ask the creditor to send only essential communications in writing.
- If the problem carries on, keep any letters and keep a log of calls, including the date, time, who the call was from and what was said.
- There is a big difference between creditors just being persistent and them actually being guilty of harassment - this is a criminal offence. If you want to make a complaint or you feel that you are being harassed, get advice at once.
'Loan Sharks' - All credit lenders must be legally licensed; a lender who is not, and who ignores the rest of the rules, is often referred to as a loan shark
No matter how bad your debts seem, never borrow from an unlicensed lender, they may demand extortionate payments, randomly increase the debt and enforce payment by illegal means, including threats and violence.
It will be impossible to negotiate with a loan shark - seek help if you are being harassed.