Whatever the source of your financial woes, perhaps a change in personal circumstances meaning that you find yourself in difficulty and unable to meet your payments for the mortgage or rent or telephone bill one month to the next, the worst possible way of dealing with the financial blip is to ignore it. It won’t go away, however much you wish it would.
Speak to your lender/landlord/service provider and explain the circumstances. It may be that you can come to an arrangement to pay by smaller instalments for a short time or limit your contract to avoid you getting into further debt while you can’t afford what you owe already. If you ignore the issue, more costs are likely to be added to the debt either in trying to find you or to collect money from you.
If the problem is not acted upon, solicitors’ costs and interest may become far greater than the initial debt itself and, in the worst case examples that have been seen, can result in you losing your home and/or being made bankrupt.
Don’t make promises you can’t keep. If later on down the line court action is taken to recover the debt from you, if you can show that you have attempted to make some payment and kept on top of those payments the courts are likely to be more sympathetic and less likely to make orders for costs against you.
You may have a dispute in relation to the debt, whether it be in relation to the amount due or whether you are the rightful debtor and owe anything at all. Whatever the circumstances, you won’t be doing yourself any favours if you turn a blind eye.
If you don’t know where to start, speak to someone independent. We cannot offer to solve your problems for free but our dispute resolution team may be able to assist if you dispute the debt or you find yourself in difficulty and have assets that you wish to protect. There are also help lines that can assist or at least point you in the right direction: National Debtline, Citizens Advice and Stepchange are all useful online resources and the Government Money Advice Service may also provide invaluable guidance.
If you do find yourself in financial difficulties, act now!
For additional information on this article, please contact Frances Woods or a member of our Dispute Resolution Team on 01905 721600