Stop being chased for late payments
- See also:
- credit card debts
- debt counselling
- authorised debt settlement
- debt management
- IVA
- bankruptcy
- enquire online
As more and more people in the UK are struggling to keep up with the monthly payments on credit cards and loans, the lenders are trying to do whatever they can to recover what they are owed.
It is important to understand why this chasing is happening and how it works. Clear Start can also recommend a number of alternative solutions should it not be possible to comply with their requirements.
There has been a huge increase in debt collection and recovery activity in the UK over the last few years, and the collection departments and organisations have become more advanced, intelligent and more efficient. From the perspective of a lender, they are competing to make sure they are paid off first each month before other lenders, and they will use a wide variety of techniques and strategies to make this happen.
For example, for payments up to thirty days late there will be a series of reminder letters and phone calls. If this is not successful they may start to take a more demanding tone in both written correspondence and in the chasing phone calls. Should this still not prove effective, they may suggest blacklisting, bankruptcy or other legal action.
Frequently now if there is a group of individuals who are not paying, the lender will transfer these debts over to an external organisation who specialise in debt collection. These external organisations are rewarded for collecting as much of the debt back as soon as possible - and hence the experience can be quite intense for the person who owes the money (debtor).
The following are a few simple guidelines for what to do when being pursued for late payments:
- Act as soon as possible
- While debt is being dealt with by the original lender, there is more of an opportunity to re-negotiate a realistic set of payments.
- By far the preferred solution for the lender is to retain a valuable customer by showing a bit of flexibility.
- Understand your financial position
- Compile on a simple piece of paper the following
- List of debts, amounts and monthly payments required
- Monthly income, after tax
- Monthly expenditure, the basic costs of living
- This will tell you what is affordable to pay off each month
- You may find that you can pay off your debts effectively by being more careful with monthly expenditure
- This is the most appropriate solution as you do not risk legal action or impairing your credit history
- Alternatively you may look to consolidate multiple high interest debts into one loan with one lower monthly payment
- You should only look to consolidate your debts if all previous debts are paid off in full and the new monthly payment is affordable
- If you are unable to pay off your debts in a timely fashion, you may be able to agree with the lender a longer pay back profile
- Explain your circumstances openly and honestly to you lender
- Show them what you can afford, and see if you can come to an arrangement which you are both happy with
- If it proves difficult to refinance your debts or to reach a settlement directly with your creditors then it is time to look for external support.
- If your debts are over £1,000 then Clear Start can provide free debt counselling services and can set up a debt settlement programme
- There are a number of debt settlement solutions available including debt management plans, Individual Voluntary Arrangements (IVAs) and bankruptcy.
For help and advice to avoid being chased for monthly payments call 0800 138 5445, or complete the enquiry form.
To contact an advisor call 0800 138 5445. Alternatively complete an online enquiry form and an advisor will call you back at the time that you specify.