It’s the season to be jolly, but unfortunately there can be reasons to not be so cheerful at this time of year. Financial problems seem to mount up in the lead up to Christmas, and sometimes it can all start to feel a bit much. However there’s plenty of rumour and speculation when it comes to debt problems, and it can leave people feeling confused and lost in the dark. We’ve compiled a list of some of the biggest debt myths out there so that you can stay informed and ahead of the game.
Bailiffs forcing entry into your home
Plenty of people grow worried at the thought of bailiffs forcing their way into the home to make a collection. However they aren’t allowed to do this and they must be invited in by you first. If you do decide to let them in then they could start reclaiming possessions to offset a debt. After granting a bailiff entry to your home once then they are allowed to re-enter should they return, so think carefully before letting them in. You’re not obliged to open the door and you can even communicate through a chained door or even letterbox. Occasionally bailiffs can apply “reasonable force”, for instance if they have a court order or have been invited in previously, but they can never do things like push you or break in.
Bailiffs taking items from the home
The bailiff will only be able take items that belong to the person who owes them money, not belongings of families or kids. You may need to provide proof that the items don’t belong to you. Items including bedding, clothing, household equipment and anything that’s needed for domestic use cannot be taken.
Bailiffs and enforcement agents
Bailiffs and enforcement agents are essentially the same thing, and they’ve been given a set of rules and regulations that they have to follow. These guidelines include details about what they can and can’t do when making a visit to your home, and the fees that are applied at different stages of the process.
How often debt collectors can contact you
According to the Administration of Justice 1970 and the Office of Fair Trading, debt collectors and creditors are forbidden to make excessive contact with you as it could be regarded as harassment. If you feel uncomfortable with debt collectors pestering you then report them to the Office of Fair Trading.
Where debt goes when you die
When you pass away, as long as you have no other assets to sell or savings, the debt will pass on with you instead of having to be paid by family. However your family may be forced to sell your home or other assets you might have had to release money to pay creditors.
When you can go to prison for debt
Creditors don’t have the power to send you to prison for defaulting on credit card payments or personal loans. If this happens you could be issued with a CCJ so you have to pay a certain amount towards the debt. You can be sent to prison for not paying council tax, however this usually only happens if you don’t make your payments due to neglect or refusal, not just because you’re struggling with the financial aspect.
Who your bad credit rating effects
A credit rating is personal solely to one person, not additional card holders or people that you live with. Additional card holders are not liable for any debt built up on a credit card.
Losing your home after missing mortgage repayments
You could eventually lose your home if you fail to keep up with the mortgage repayments, but mortgage lenders do have a code of conduct they have to abide by. This means they have to treat you fairly and can only repossess the home as a last resort. Contacting the mortgage lender and coming up with an agreement is always the best course of action.
When the bank can help with debt
If the repayments on credit cards are piling up, letting the creditor know as soon as possible could see them freezing the interest, reducing it temporarily or sometimes giving you a break from it altogether. Don’t be afraid of your creditor, get in touch with them and they may be able to provide a helping hand.
How expensive overdrafts are
A lot of the time overdrafts can be expensive, but they don’t have to be. There are some banks with current accounts that offer fairly low fees for overdrafts, and it’s best to shop around to see which one offers you the best deal.
When debt doesn’t have to be bad
Of course, high interest rates on things such as credit cards is obviously bad debt. However debt can also be used to be turned into a positive, as a good credit history and credit score can be built up if you manage it correctly. It can be hard to find credit for things such as mortgages if you have no credit history.
Having to pay for debt advice
If you’re struggling with debt problems and want someone to turn to then free, professional and impartial advice is available for you. Council Tax Advisors can give you information on all manner of debt, easing your worries and helping you figure out how to get rid of your problems. Contact us today for more details.