Dealing With Debt: Common Mistakes
It seems a pretty regular occurrence on here that bad advice is given out, and this has caused problems for a number of people.
- 1 Statutory Demands.
- 2 CCA Confetti.
- 3 Recovering Monies Paid
- 4 Not Verifying The Debt.
- 5 Not Checking The Amount of The Debt
- 6 Paying Too Much Towards a Debt.
- 7 Talking on The Phone, Without Recording Calls.
- 8 Not Getting Help When You Need It
- 9 Believing Everything a Creditor or DCA Says
- 10 Paying a Statute Barred Debt.
- 11 Allowing Them to Harass You.
- 12 Not Being Aware of The Guidelines.
- 13 Not Making formal Complaints
- 14 Not Keeping Records of Payments on a CCJ
- 15 Related Pages:
It is my view that you should never ignore a statutory demand. The advice that you should pretend that you never received it is in my view, at best, immoral. At worst it could lead you into severe criminal liability.
In order to have a statutory demand set aside, you need to do it within 18 days of receiving it. The process of setting aside a statutory demand REQUIRES you to swear an oath or affirmation to the effect of the date you received the letter.
Alternatively, you could go to the bankruptcy hearing, and lie saying you did not receive it.
In either case, you would be committing a crime if you were to lie about when you first received the statutory demand.
It is, in my view, inadvisable to ever ignore a statutory demand. Instead, you should get professional advice; I would suggest the National Debt Line.
This is particularly the case if you own your own home, or have substantial public investments in the stock market.
There is the general belief that sending consumer credit agreement requests everywhere will magically eradicate all debts.
Certainly, many members of the forum have experienced this. For many forum members the lack of a signed credit agreement has been a great boon.
But this doesn't mean we should advise people to send a CCA without even bothering to find out what the debt is for. The vast majority of debts in the UK are not covered by the consumer credit act.
And in reality for debts made after section 15 of the consumer credit act 2006, and to a lesser extent for debts after the electronic communications regulations came into force this is not true.
Even for consumer credit act regulated debts under the original act, not all debts are covered by the same prescribed format, AND NOT ALL CONSUMER CREDIT REGULATED DEBTS (for example, overdrafts, and non-commercial agreements) REQUIRE THE DEBTORS SIGNATURE.
So people, please remember to find out what the debt is for before you advise others to send a CCA and stop paying after 12 days.
Further, any debt made during or after 2004 is very likely to have a signed consumer credit agreement. Some people have found this out to their surprise after halting payments and getting a claim form in the post.
It also isn't true that just because a document is improperly executed, a judge will not enforce it. There is a very limited remit of what a judge can't enforce if he tries hard enough.
Recovering Monies Paid
Nothing in the consumer credit act 1974 allows you to recover money already paid under a credit agreement simply because no-one has furnished a signed credit agreement.
Not Verifying The Debt.
It is vital to ensure that any debt claimed, is actually owed to the person claiming it. It is important to request proof at the time they claim money from you. For CCA debts, this involves sending a consumer credit request, FOR ALL OTHER DEBTS I suggest asking them in writing using special delivery to send you proof of the debt.
Never pay an unproved debt.
Not Checking The Amount of The Debt
I would suggest people always check that the amount of a debt is the same as any debt collection company claims. The best way to do this through a S.A.R. to both original creditor and DCA.
Paying Too Much Towards a Debt.
It is essential that any repayment schedule should be affordable, at a reasonable standard of living. Never agree to pay more than you can afford. If you have problem, contact any of the debt charities to work out a budget.
Talking on The Phone, Without Recording Calls.
Never talk on the phone to a DCA unless you are recording the call.
Not Getting Help When You Need It
I would suggest getting into contact with the national debt line, CCCS, PayPlan or Citizens Advice Bureau the second any DCA contacts you. And bookworm told me to mention CAG
Believing Everything a Creditor or DCA Says
They are out to get your money, and many companies are willing to lie, cheat or completely destroy your life. Be aware that debt collection is a heavily regulated profession. If they do anything wrong, complain under the consumer credit act 2006 or trading standards.
Paying a Statute Barred Debt.
In general unsecured loans over 6 years old, and secured loans over 12 years are statute barred unless the creditor has been awarded a CCJ.
Allowing Them to Harass You.
It is unlawful to act in a way intended to harass you into paying a debt If they telephone you frequently, send you threats of physical harm, send obscene or abusive letters complain to trading standards, the police and the ombudsman.
Not Being Aware of The Guidelines.
I would suggest everyone read all the relevant collection guidelines, including the OFT Debt Collection Guidelines, and the Banking Code.
Not Making formal Complaints
If they act unfairly or unreasonably, make a formal complaint to their complaints department, and follow that up with a complaint to the FOS.
If they break the OFT Debt Collection Guidelines, complain to trading standards.
If they harass you, complain to everyone.
Not Keeping Records of Payments on a CCJ
Keep records of payments on a CCJ forever or make sure you get a certificate of satisfaction, and keep it forever.