The number of people settling their debts in full has fallen dramatically according to new figures from the debt collector?s trade association, the Credit Service Association, (CSA).
In the 1st quarter of 2008, 33% of people with debts being collected by a debt collection agency settled them in full rather than paying by instalments. By the 4th quarter of 2008 this figure had dropped to 23%, with the value of each instalment arrangement falling over the year by 27%.
Nick Pearson from Paymex commented ?The CSA figures very clearly that the recession is having a major impact of people?s ability to repay their debts. It is important that people in financial difficulty make reduced repayments which are affordable and fair to their unsecured creditors, with the largest debts receiving more of a person?s monthly disposable income. However, we are finding that increasingly debt collectors are pressuring people for payments which are simply unrealistic and unaffordable and can lead to people being unable to meet priority commitments such as their mortgage. A major part of the service we provide is to negotiate with all lenders on behalf of our customers, putting forward fair and sustainable repayment proposals?