Creditors Demanding Payment From Debtors

You will probably understand creditor harassment if you cant afford to your debts when they are due or you have fallen behind in debt repayments. They will start with sending you reminder and overdue letters. If you cant make the repayments then they will start sending you emails, texts, phone calls and even visits to your home. Sometimes the creditors will contract out the more nasty parts of the hounding to debt collection agencies.

Does harassment from the creditors work? Well It must as consumers in the UK are bombarded with torturous phone calls and letters every day by the creditors or the debt collection agents acting on their behalf. If it didn’t work the creditors would stop doing it and use other means of getting repayment from the debtors, so for that reason the creditors are not going to stop these actions anytime soon.

So what can you do to stop this harassment? Obviously the main way to stop the harassment is by paying off your debts and making sure you pay future bills on time. However for many people this is not an option. You may actually be insolvent and you may never be able to pay off your debts. So does that mean you are destined to be harassed by creditors forever? No you aren’t as there is solutions to this. In fact there are several possible solutions and they all result in harassment reducing and stopping altogether in some of them.

If you are actually insolvent you can enter into an Individual Voluntary Arrangement or you can petition for personal Bankruptcy. These insolvency processes protect you from your creditors as they are legally binding. Even if you are not insolvent, you can enter a Debt Management Plan with your creditors. You can arrange this yourself by reaching an agreement with each of the creditors that you owe the money too.

This is known as a self administered debt management plan. Most debt management plans are administered with the assistance of specialist companies qualified in setting up DMPs between consumers and creditors. While creditor harassment will usually calm down when you enter a DMP, it doesn’t mean it will disappear altogether. This is because creditors are not bound by law to accept the DMP proposals and it is not legally binding like an iva is.

This is not the case in an IVA or bankruptcy. Once the IVA has been approved or the bankruptcy Order granted, creditors must stop chasing the debtor for payment and must deal with the Supervisor of the IVA or the Trustee in Bankruptcy in seeking repayment of the debts owed. Creditor activity in chasing debts will often continue for 6 weeks or more from the date of the iva or bankruptcy approval. This is because large banks, credit houses and other lenders are not terribly efficient at communicating the matter to their various departments. The debt collection department may be department to hear about the iva or bankruptcy so they will still chase you until then.

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