Christmas places a strain on everyone’s finances, from personal and family finances to SMEs and Sole Traders. The festive season can be a difficult time when it comes to managing money. UK households are taking on more debt than ever before, just to make ends meet. This means individuals are sinking deeper and deeper into a financial black- hole and the situation can spiral out of control.
What Happens If You Get Into Debt?
At North Yorkshire Law, we wouldn’t dream of telling you how to spend your money but what we would like to do is make it clear that there are possible consequences if you overspend and Creditors take legal action.
Creditors are now less tolerant when it comes to mounting debts, so it is essential to try and maintain at least minimum repayments on loans and credit card balances.
Debt Collection Agencies
Many creditors appoint debt collection agencies to enforce outstanding debts. These companies will try many ways to obtain payment from you which could involve:
Calling at your home or work by telephone and email or in person
Threatening Court action to recover monies due including serving a sample summons on you (not one issued by the Court)
Forcefully pointing out how your credit rating will be affected by non-payment in some cases
Threatening bankruptcy and seizure of your home or belongings
There are other means by which creditors can attempt to obtain money from you, but these threats are designed to obtain payment from you and can be very frightening.
County Court Judgements
If you receive a County Court claim form, you have just over two weeks to respond. It may be that you don’t have to pay off your debts in large lump sum payments, but it’s very important to respond in the timeframe given. If you don’t the court could order you to pay the debt back at a rate you can’t afford and this could lead to further enforcement action.
Unless you pay off a County Court Judgement in full within 30 days of receiving the judgment, it will be entered on your credit record at the Register of Judgments, Orders and Fines and remain there for six years. This can seriously affect your ability to get a mortgage, a credit card or even a bank account in the future.