Debt management - can it stop the bailiffs visiting?

If you are in several months` worth of arrears on your debt repayments, your lender could instruct a debt collector to collect the debt on their behalf.

A debt collector will attempt to reclaim the debt for your lender - and if they are unsuccessful, they may eventually send bailiffs to your home.

However, this process tends to take a fair amount of time, and bailiffs cannot be instructed until a County Court Judgment (CCJ) has been obtained and enforced. During that time there is plenty you can do to improve your situation. This might include entering into a Debt Management Plan - an arrangement with your lenders (or debt collector) that can help you to repay your debts at a more manageable pace.

Who should I deal with once a debt collector contacts me?

This can vary. In some cases, your lender will simply appoint a debt collection agency to collect the debt on their behalf, in which case you will have to make arrangements with the appointed agency for as long as they are employed to collect your debt.

However, some lenders may actually sell your debt to a collection agency, in which case the debt purchaser will become the legal owner of your debt and you`ll be required to make all future arrangements with - and repayments to - them.

You should receive a letter informing you of this, but if you`re unsure, it`s worth contacting your lender to find out who you need to make repayment arrangements with.

How can debt management help?

A debt management plan is an informal arrangement in which you will agree to repay your debt in smaller instalments, based on how much you can afford, over a longer time than originally agreed.

As well as lower monthly outgoings, you may also be able to negotiate a reduction or freeze in interest and other charges, which can prevent your debt from getting any bigger.

It`s possible to arrange a debt management plan on your own, but because of the time and effort involved, you may prefer to let a professional debt management company deal with your lenders on your behalf.

The other advantage of this is that your debt management company can act as a point of contact for the duration of your debt management plan - receiving any payments and passing on any communication to and from your lenders.

Will bailiffs still take my possessions?

This is unlikely if you`re taking action to agree a repayment arrangement. Because a debt management plan is an informal debt solution, there are no laws preventing your lenders from taking steps to reclaim the debt in full. But in practice, most lenders will accept a debt management plan if they can see that it is the most realistic way for you to repay the money they are owed.

Bailiffs are almost always a last resort for lenders - and as long as you can show that you are doing all you can to repay your debts, your lenders will often accept a reasonable repayment arrangement.

Related resources:

• Debt
• Debt management
• Talking to debt collectors
• Who are Bailiffs? What can they do?
• Debt collection: what are my rights?
• Debt Collection: what help is available?
• Can`t afford to live because of debt?
• County Court Judgments (CCJs)

Tags: debt, bailiff, debt collectors, debt collection, stop debt collection, stop bailiffs, County Court Judgment, CCJ, repayment arrangement

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