As debt problems and financial problems in the UK have been rising for the last five years especially with credit card and loan debt problems lenders are now taking a more harsher stand and taking action earlier to recover any money owed to them.
Many consumers are now finding themselves in a position where they cannot afford to make the repayments demanded by the creditor. It is therefore important to know why your creditors are chasing you for money and how they operate. There are various solutions that Debt Plan Direct can recommend if you are unable to comply to the demands from your creditors.
Due to the vast increase in consumer debt in the UK there has been a knock on effect in the increase in debt collection activity and recovery, with the agencies now more advanced and efficient with their systems and procedures. There has also been a marked increase in the competition between lenders themselves to ensure that any money owed to them is paid first over any money owed to other lenders. Unfortunately lenders nowadays will use a variety of tactics and an array of strategies to ensure that they get their money first.
From the lenders perspective if a consumer is thirty days late for payment the lender will issue numerous reminder letters and phone calls each with an accompanying charge. If this still does not result in a payment being made then the tone of both written and phone call payment chasing demands will increase. Following this if still no payment has been made they may suggest blacklisting, bankruptcy or other legal action.
Many lenders will quite frequently pass the debt to a third party organisation who specialise in debt collection- we provide debt collection advice and all debt management programmes associated with debt problems. These debt collection companies work on a commission basis for the amount of money collected in the shortest period of time. This will then result in the debtor experiencing an intense level of phone calls, threatening letters and visits to the property.
Here are a few simple guidelines for what to do when being pursued for late payments:
- Act as soon as possible- Deal with any payment problems whilst the debt is still with the original creditor as there is more of an opportunity to re-negotiate realistic payments.
- Prepare a personal financial statement which will include:
- List of your Creditors - amount of debts and monthly payments required
- Monthly Income
- Monthly Expenditure - this will then provide you with an approximate amount you can afford to pay each month.
- Try 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.
- Explain your circumstances openly and honestly to your lender
- 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 you have debts of over £1,000 then Debt Plan Direct can provide free debt counselling services and can set up a suitable debt settlement programme. We can help to consolidate debts without the need to borrow more money by provding a debt consolidation service which includes:
For help and support to stop being chased for monthly payments call 0845 055 8152 or complete the enquiry form
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