Stage 8: What may happen next?

Generally creditors will agree to accept payments rather than take court action.

Even if you have been unable to offer payments because you have no Money for Credit Debts, your creditors
may be prepared to freeze your account until things improve.

If your creditors accept your offers, tell them how you want to pay. This could be by standing order, direct
debit, payment book or by asking someone to call.


WHAT IF CREDITORS REFUSE MY OFFER?


WHAT IF MY DEBT IS PASSED TO A COLLECTION FIRM?
Don’t worry; most debt collection agencies are reasonable. They will generally accept pro-rata payment offers, even
when these are low. If they insist on larger payments, just repeat that the offer is all you can afford. Debt collectors have
no special powers. If you experience problems with a debt collecting agency, get some advice.


WHAT IF MY DEBT IS BOUGHT BY A DEBT PURCHASE COMPANY?
It is common for debts to be sold by creditors to companies who buy the debts and collect them as their
own. The rights to the debt are sold so your offer of payment must be made to the new company. You may
need to start the whole process of letter writing all over again. As with debt collection agencies, debt
purchasing companies have no special powers. If you have problems, get some advice.


WHAT IF A CREDITOR CONTINUES TO ADD INTEREST?
If you are paying less than the interest being added, your debt will continue to grow, so you should ask the
creditor to stop charging you any more interest. Generally, creditors will do this. If they do not agree, get
some advice.

Note: If your creditor takes you to the county court for a debt of less than £5000, interest charges will
automatically stop. Debts between £5000 and £25,000 usually do not attract interest charges.


WHAT IF THEY INSIST I PAY MORE THAN I CAN AFFORD?
People you owe money to are allowed to ask you for it. But it is a criminal offence for them to harass you by,
for example:

Never be pressured into paying more than you can afford – it just means that you can’t pay something more
important.

If you feel that you are being harassed, contact Trading Standards (342 8355) or, in extreme cases, the police.


CAN I GET CREDIT AGAIN?
There are Credit Reference Agencies who keep records of some unpaid debts and there is a register of all
County Court Judgements. Most companies will check these before they decide to give you credit. They must
tell you which companies they used, if you ask.

You can get a copy of your record from the Credit Reference Agency in seven days by paying a small fee. If it
is wrong you can get it changed. When you pay off a County Court Judgement, you can have that record
changed as well.


WHAT HAPPENS IF MY CREDITORS TAKE COURT ACTION AGAINST ME FOR MONEY
I OWE?
The County Court is not a criminal court and is not there to punish anyone. If a creditor takes court action
for the money you owe, you do not usually have to attend court. If you do, the hearing will usually be in a
private room. There is no publicity.

If you get a court summons and you do owe the money, return the form of reply attached to the summons to
the creditor, saying how much you can pay. Attach a copy of your Personal Budget to it. If you dispute the
debt, get some advice.

If the court orders you to pay more than you offered, write back within 14 days and object.

Once you have a judgement against you, provided your debts are no more than £5000, and you have two or
more creditors (including the judgement) you can ask the court to take over the payment of all of your debts.
You then make one payment into the court and the court pays all of your creditors for you. The court can
order that you should pay off only a part of what you owe. This is called an Administration Order.


WHAT IF I NEED MORE INFORMATION OR FREE ADVICE?