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Consumer rights relating to debts

If you are struggling with debts, you would hope that the companies you are dealing with follow an ethical code of practice and stick within the law.

Unfortunately, this is not always the case and some rogue firms try to apply unfair pressure or insinuate they have more powers than they do, as a means of trying to get you to pay more.

It can therefore be very useful to understand what rights you have as a consumer when trying to manage your debts.

You won’t go to prison

Some lenders threaten court action if you fail to pay up. Whilst it is important to take these claims seriously, you should be aware that unless you have deliberately and repeatedly failed to follow orders handed out by the court, or have wilfully refused to pay your council tax, you will not be going to jail.

Debt collection agencies know that individuals may fear the repercussions of having to attend court so often threaten legal action even if they have no intention of pursuing the case that far.

Don’t bend to unfair pressure

If you are unable to pay your debt because you simply don’t have enough money, unscrupulous debt collectors could try all means to try and get you to prioritise their debt.

This could involve calling at your home during unsociable hours or bombarding you with telephone calls. You might even be put under pressure to take out a new loan elsewhere to pay off the debt.

Regardless of the tricks they may try, do not be persuaded into paying money you cannot afford. Your priority debts such as council tax, rent/mortgage, utility bills and food all take precedence over paying off your credit card. If you feel the debt collection agency is intimidating, trying to exert undue pressure or overly aggressive, you can report them to the Financial Conduct Authority (FCA).

Debt collectors cannot break into your house

There is a general misconception about debt collectors. Debt collection agencies do not hold the same rights as bailiffs and need your consent in order to conduct a conversation regarding the sum payable.

You do not have to invite a debt collector into your home and if you ask them to leave, they must do so immediately. They absolutely cannot seize your possessions and nor should they threaten to do so.

Debt collectors are not permitted to divulge the nature of their business to neighbours, even if asked and should never visit your place of work to collect the debt, unless you have either requested it or it is a business debt.

Many lenders ultimately resort to either in-house or external debt collection departments to try and get you to pay what you owe. However, if you do not have the resources, do not be tempted to borrow more money just to get a bit of peace and quiet. One of the primary reasons firms use debt collection agencies is because borrowers go quiet when they cannot afford to pay.

The best thing you can do is let your lender know that you’re struggling to repay what you owe. At Baines and Ernst we help people consolidate debt repayments and clear debts at a rate they can afford with solutions like Debt Management Plans and IVAs.

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Answer a few simple questions and we'll help you find your solution.
  • Total unsecured debt: £500

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Money Advice Service

You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.