Excessive, unmanageable personal debts have resulted in a growing demand for Debt Management Plans. The Times recently stated that 700,000 consumers had already turned to debt repayment plans where a lower repayment is made based on affordability. Struggling borrowers are now complaining that debt collection agencies are failing to co-operate and placing them under undue pressure.
Debt Collection Agencies Rejecting Debt Management Plan Proposals
Individuals struggling with financial difficulties claim that debt collection agencies are proving less than co-operative once missed or late payments have become an issue. This is despite the fact that they purchase full collection rights with respect to defaulted accounts- often for less than 30% of a loans value. Instead of helping borrowers to make realistic monthly repayments, there are complaints that:
- Borrowers are being pressured into making unaffordable monthly repayments.
- County Court Judgements (CCJ's) are being taken out against a borrower so they can pursue a Charging Order at a later date.
County Court Judgements (CCJ's) and Charging Orders
A County Court Judgement (CCJ) may be taken out by a lender when a borrower has defaulted on a credit agreement. A Charging Order can then subsequently be pursued which turns an unsecured personal debt into a loan that is enforceable against the borrower's property. A CCJ needs to be issued by the court before this can ever happen. Always attend court and present the judge with a full budgetary breakdown; it is unlikely that the court will then agree to the Charging Order taking place.
