Sometimes you need to borrow money in order to carry out important financial obligations. However, you have to pay off that debt within a stipulated time. If you are unable to pay, then it can negatively impact your financial condition.
Most people find it difficult to pay off their debt efficiently. This leads to various financial hardships. You may require some financial advice to pay off the debt. Getting the necessary information about debt and debt management will allow you to smoothly repay the loan.
Taking a loan is easy but paying it off within the stipulated time can prove to be difficult at times. You must be equipped with all the necessary data that will enable you to repay the loan amount successfully. There is a lot about debt that you must know. Here we have provided some crucial data about debt and debt management in the UK that will help you to sort out your financial issues:
A- Debt Consolidation
Debt consolidation is basically taking a new loan to pay off the existing debt. However, before you proceed to take a debt consolidation loan, you must have a complete idea regarding it. Here are some of the benefits that you can avail of through a debt consolidation loan.
Benefits of Debt Consolidation
1- Reduction in the interest rate of the previous debt.
2-Lower monthly installments.
3-Fewer companies to owe money to
But, you must know that a debt consolidation loan is not for everyone. So, you must always check for all the other options available to you before taking up the debt consolidation plan. The debt consolidation plan might appear to be quite promising in the beginning. But, you can end up with further debt in the future.
Although the debt consolidation plan provides temporary relief, it might come with certain extra costs. So, before going for a debt consolidation plan, you must seek expert advice from a financial expert. You can ask for any sort of financial help on the UK debt helpline number – 0800 046 5868
Most people often get confused between debt management and debt consolidation plans. But, you must know the difference between clearly to resolve all your debt-related issues. Debt consolidation means you have to take a new loan in order to pay off the previous loan. Whereas, a debt management plan includes negotiation with the creditor to provide affordable payments.
It is important to realize that debt consolidation isn’t always a good option for everyone. In debt consolidation, you need to pay a huge amount of money to one company for a long span of time. This might make you end up paying more than the overall loan amount.
Therefore, whenever you are willing to go for a debt consolidation plan, you must check if you are eligible for it. Before you take a debt consolidation loan, here’s what you need to consider:
1- You must make sure to pay all your debts in full.
2- Get rid of all your credit cards and existing credit agreements. This will help you to get rid of taking further loans in the future.
3- Choose an experienced financial expert to get solid debt advice. They can find another alternative option for you in place of debt consolidation.
In England and Wales, bailiffs are called ‘enforcement agents’. These agents are basically law enforcement officers. If you owe money to a lender or creditor, the court can ask a bailiff to take possession of your assets and furniture.
Whenever a bailiff visits, you have to know how to handle the situation carefully. You must know that there are certain rights that you can ascertain in the presence of a bailiff. Here’s what you must do:
1- A bailiff gets involved when the situation becomes quite difficult. If the situation gets to this, it is best not to ignore it. You should try to get in touch with your creditor or the lender. Make sure to pay back the amount that you owe to them. If you can’t pay back in full, then pay as much as you can at the moment.
2-The first thing that you should do when a bailiff visit is to stay calm. Acting rudely or aggressively can further worsen the situation. You should try to deal with the bailiff as calmly as possible. Attacking him or obstructing him from carrying out his duty can cause your arrest.
3-Whenever a bailiff visits you, you must ask for his ID proof. Moreover, you must also seek a copy of the warrant from him before you allow him to enter your house.
4-You must always keep all paperwork that you get from a bailiff intact. This will help you a lot in the future. In case you make any payment to the bailiff, make sure to get a receipt as proof.
5-If the visiting bailiff provides you with a list of goods and asks you to sign the controlled goods agreement, then you should sign it. If you refuse to sign the agreement, then it can lead to further complications. The bailiff can take away your goods right away. However, if you find a good on the list that doesn’t belong to you, then ask him to remove it.
If you get a letter from the bailiff about an impending visit, it signifies that you need to pay the debt as soon as possible. You can take help from the official debt helpline number UK – 0800 046 5868. You will be able to receive free advice from the government and other financial experts to help tackle the debt issue.
Payday loans are basically short-term loans that come with extremely high-interest rates. You can use this sort of loan for making mostly small purchases. You can get a payday loan from £50 to £1,000.
However, if you are unable to repay the loan, then your financial situation can get worse. You will have to pay the entire loan along with the interest rate. Along with that, you might have to pay an additional charge that your lender might impose.
Payday loans can never be a suitable solution for loan repayment. Because a payday loan can make your financial situation even worse.
A payday loan can be quite disastrous for your credit score and overall financial condition. If you fail to pay back the payday loan, then you have to pay the following amount:
Before you go for a payday loan, you must make sure that you can repay the loan amount along with the extra charges. In case you do not pay the payday loan, the creditor will seek help from a debt collection agency.
In case you fail to pay back the borrowed money, your creditor can take you to court. In that case, the court can issue a CCJ or a County Court Judgement asking you to repay the borrowed amount to your lender. CCJ is one of the many actions that is taken when your creditor is authorized to take against you in case of non-payment of debt.
You will have only about two weeks of time to respond to a County Court Judgement. If you do not respond within the specified time frame then you can face severe actions from the court.
What Happens After You Receive a CCJ?
Before the creditor serves you with a County Court Judgement, they have to provide you with a ‘letter of claim’. In this letter, they will have to provide you with details of the debt that you owe to them. There will be a reply form in which you have to register your reply.
If you do not respond within the mentioned time frame, then your creditor can take further actions against you. Here’s what you need to convey through the reply form of the County Court Judgement:
1- In case you are not able to pay the full debt, you can offer to make a suitable payment. This offer of payment can at least stop the creditor from taking any further action against you.
2- Make sure to let the lender know that you are currently taking debt advice to deal with your financial situation.
3-If you are in need of more information about the debt, then you can also ask for the same through the form.
In case your creditor agrees to an offer of payment, then you can resolve the matter outside the court.
A CCJ consists of four different forms:
1-N1: This is the claim form.
2-N9A: It is the admission form.
3-N9: Response back form.
4-N9B: It is the form pertaining to defense or counterclaim.
The court will provide you with a 14 days time period to fill up the respective forms of the County Court Judgement. Once you have filled up the forms, you have to send it by post. However, if you are unable to send it by post, you can also reply online. You can also ask the court to provide an extension. You can do this with the help of the ‘Acknowledge Service Form’.
Once you have provided your reply to the court or creditor, the court will ask you to pay the offered amount to the creditor. You can pay this amount in easy monthly installments. If you have provided the settled amount in the proper timespan, then the creditor cannot take any further step against you.
How can a CCJ Affect you?
If you don’t pay your debt, you can get a CCJ from your creditor. Many people often ask how a CCJ is going to affect your financial situation. You must know that a CCJ will stay on your credit file for six years. This signifies that your ability to take any credit in the next six years will be negatively affected. This is because the lenders will get to see the CJJ in your credit file.
However, having a CCJ in your credit file doesn’t mean the end of everything. You can get solid debt advice from financial experts to deal with the credit file. You can reach out to debt helpline contact number UK for suggestions on how to maintain a credit file.
In case, you are unable to pay the assigned amount by the court to the creditor, you can ask for a reconsideration. You can plead to the court to rethink or totally cancel the amount. Moreover, you can also ask the court to modify the payment terms.
There are numerous debt management companies that help people to pay back their debt in time. These companies help you to consolidate all your debt in one single monthly payment. These debt management companies go through your financial situation and then provide a debt management plan. You can easily pay back your debts by following this plan.
A debt management company will manage all the payments to your lenders on your behalf. Moreover, they will also keep track of all your debts and how much to need to pay each month for quick repayment. If you are struggling with your debt payment, then you must seek help from a debt management company.
However, no debt management company in the UK works for free. Usually, a debt management company will charge around 17% of the monthly debt installment that you have to pay. If you wish to avail of the services of a standard debt management company, then be sure to pay £4,000.
When you use a DMP for your debt, the monthly loan payments are reduced. You pay less in monthly installments than you actually agreed to. All these partial payments will be carefully recorded in your credit file. This data will remain within your credit file for the next six years. However, it will not make any adverse impact on your credit score. Your creditor will use a DMP marker to signify that you have used a debt management plan.
For any kind of debt help UK, you can seek advice from the financial advisers in the UK.