Debt advice - Dealing with Debt

Posted by Amy Flower in Dealing with Debt on 23 October 2015 - Amy is a Senior Credit Analyst at checkmyfile

The most important debt advice you can probably have is that the advice does not need to be paid for, there are organisations available that can give you free advice about handling your debts or the rescheduling of your debts. Stepchange.org, Citizens Advice Bureau (CAB), Money Advice Service (MA) and the government’s National Debt Line all provide free, non-judgemental advice and guidance on how to take control of your debts, approaching your creditors and how to work out what you can afford to repay.

The organisations can provide you with an income and expenditure form that will help you to detail all of your finances and provide a reasonable view of what you need to live on and what, if any, money there is left to divide between your creditors. You will also be given advice about the different types of debts and which creditors are considered to be a priority creditor over non-priority creditor.

Your creditors need to be treated equally and be informed of your current financial situation if any changes occur whilst you are making your offers or repayment or if you are already in an agreed repayment plan.

Ignoring your debts and the lenders involved can result in the creditor/s taking recourse to the courts for legal recognition of your debt in the form of a County Court Judgment (CCJ). This gives the creditors more ways of enforcing the debt is repaid by using any of the following:

Oral examination – where the debtor has to swear under oath the status of the assets and liabilities.

Attachment of Earnings Order – employer deducts an amount from the earnings before debtor gets paid.

Garnishee Order – an order to remove funds from the debtor’s bank account as and when they become available.

Charging Order – an order placed over any large assets so the debtor cannot sell them off without the proceeds going to clear the outstanding debts.

Writ of Fi. Fa. – having bailiffs to seize and sell the goods to raise funds.

The pressure applied by the threat of court action typically results in a debtor paying the debt before further action is taken – court is usually a last resort for lenders who will often want to find other ways of retrieving the debt without having to take court action.

The debt advice organisations can clearly advise of the best way forward in trying to take control of your debts. Ignoring your debts will only make your situation worse so be honest with your creditors about your difficulties you are experiencing and try and work out a suitable solution. Leaving the debt to fester will only be worse in the long run, as well as causing you more stress if it is taken further by the lenders concerned – so always try to move forward in a positive way and speak to one of the free organisations that have been set up to help people in exactly your situation.

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