Category Archives: Debt

When Your Creditors Takes You to Court, What Do You Do?

Your creditors can take you to court (make a claim) if you don’t repay your loan or honour any other terms of your repayment agreement. You shouldn’t ignore such a situation. In fact, you should know how to respond in advance.

Taking action swiftly will stop the situation from escalating. Failing to take the necessary action can result in more debt. You could also lose your home among other possessions like a vehicle.

First and foremost, it’s worth noting that such cases (i.e., defaulting on bank debt, credit card debt, payday loans, building society loans, etc.) usually end up in a county court. When your creditor goes to court, an order known as a CCJ (County Court Judgment) is granted. If you don’t agree with the order, i.e., there is a mistake, and you don’t owe your creditor, you need to fill out some forms from the court. The same applies if you are not in a position to pay back.

Creditor action

Before you are taken to court by a creditor, they are required to send a warning letter informing you that they will take legal action if you don’t pay back within a specified period. If you don’t get a warning letter, there is a basis to stop legal action.

Your creditor is required to try and sort out the issue with you before going to court so it is important to do whatever you can to reach an amicable solution before it’s too late.

Claim form

When court action commences, you will receive a claim form as well as a response pack from the court. Claim forms have information about the debt such as how much you owe. The response pack has several forms such as forms to accept or deny you owe money. If you deny, there is a form you must send back confirming you received the documents.

You should read these documents carefully and act accordingly observing the stated deadline otherwise a court order will be issued. When this happens, you must pay back the amount your creditor claims. This applies even if you deny you owe the creditor anything. In most cases, you will also have to incur additional costs like interest.

A typical claim form highlights how much the creditor is claiming plus interest if they are interested in claiming.

An authentic claim form should have; a claim number and official court stamp. If you are presented with a fake claim form, you have grounds to launch a harassment case against your creditor. Consult a debt advisor for guidance on how to go about harassment by creditors.

You can find more details about the claim in a document known as particulars of claim which is usually sent with the claim form or separately within 14 days after the claim form is sent.

Response pack

Creditors hardly chase you for loans you haven’t taken so if you accept your creditors’ claims, you will need to fill and admission form. If not, fill a defence form. You also need to fill a form known as acknowledgement of service confirming you received the documents. Responses must be forwarded within 14 days or 28 days if you need more time to fill the defence form. You can request for more time in the acknowledgement of service.

If you accept your creditor’s claim, it is advisable to contact them and try to get an out-of-court agreement. This option is cheaper for you. However, you are still required to fill and return the court documents. If you need help responding, the UK has some reputable free debt advice services you can use like https://www.citizensadvice.org.uk.

Remember to fill the admission form, detail your financial situation and send it to your creditor (not the court) if you accept you owe the amount stated. Also, make a copy of your admission form for record keeping.

Making an offer

When making an offer, state how much money you can afford per instalment as well as when you will pay each instalment. If your creditor agrees, you can ask the court to prepare an order involving a judge or without a hearing.

If your creditor declines your offer, a judge or court official will make a fair decision without a court hearing in most cases. You can ask for the case to be re- determined if you are not happy with the final verdict. This must be done within 14 days.

In cases where there is no repayment offer, the creditor decides the amount as well as the time you should pay. They can even demand the entire amount immediately. Most orders are public knowledge so it can be difficult securing loans in the future.

If you owe less than stated

If you own a fraction of the money in the claim, you can accept you owe (some money) but disagree on the amount. In such a case you must fill the admission and defence form detailing your issues with the amount and send the documents to court. The court will decide on the way forward through a hearing.

If you don’t owe any money

If you don’t owe anything, complete the defence form highlighting your reasons. You should take this option if you have evidence. It is advisable to seek debt and legal advice to come up with compelling reasons.

There are free debt advice services in the UK. Although you should take out credit card loans, payday loans, overdraft loans etc., that you can pay back comfortably, defaulting isn’t the end of the world. You just need to understand your options when your creditors take legal action.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

What is an IVA? What You Need to Know

What is an IVA?

An IVA (Individual Voluntary Arrangement) can be defined as a formal legally binding agreement made between an individual and creditors. The agreement highlights how a person is required to pay back their creditors. Since they are formal and legal, they must be approved by a court. IVAs can be flexible enough to suit the needs of the person who is in debt. However, they are generally expensive. An IVA can also attract some risks.

How an IVA works

IVAs are a form of insolvency like bankruptcy although they are different in many ways. For instance, an IVA must be prepared by an insolvency practitioner (a qualified person) who may be an accountant or lawyer.

Insolvency practitioners render their services at a fee which may vary from one practitioner to another. They deal with creditors on behalf of their clients for the entire IVA period.

Individuals who decide to get IVAs work out repayment plans with their insolvency practitioners. The repayment plan is then presented to creditors. If they agree to all the details in the plan, the agreement becomes valid, and all parties must adhere to it.

You must make monthly repayments as agreed. The money should be sent to the insolvency practitioner who then distributes the money to creditors as agreed. A portion of the monthly repayments is usually deducted by the insolvency practitioner as fees. It’s advisable to find out what your insolvency practitioner will

charge you before getting into an IVA. As mentioned above, some practitioners charge more than others.

When can you take an IVA?

IVAs can be taken to repay a variety of common debts ranging from; overdrafts and catalogue debts to personal loans, rent arrears or mortgage shortfalls. You can also consider taking an IVA to help you with your tax debt i.e., council tax arrears, income tax, national insurance contributions, court fines, student loans, etc. You can get a conclusive list of all the debt covered by IVAs in the Citizens Advice official website. [1]

Who can take an individual voluntary agreement?

You need to be in debt to consider taking an IVA given IVAs are necessary for lessening a person’s debt burden. What’s more; you need some spare income every month (at least £100). Most creditors don’t accept IVAs with payments less than £100. If you have more than one debt, you’ll need more money. However, there are exceptions to this if you have something valuable you can sell. Many creditors will overlook the amount of spare income or regular income you have if you own a valuable asset which you can sell and repay your debt periodically or with a lump sum. In a nutshell, anyone with debt burden and some regular income or valuable asset can qualify for an IVA.

Is an IVA a good option for you?

IVAs can be flexible allowing you some much needed time to repay multiple debts. You can reduce your monthly debt repayment by as much as 70% using an IVA. The agreement can also offer you some much-needed protection against creditor actions such as auctioning your property, petitioning for bankruptcy, etc.

However, they are usually expensive in the long-term and tend to come with other cons. For instance, you may not be able to save money or make important contributions like pension payments during the duration of the agreement. You may also be forced to re-mortgage your home/use any equity. An IVA can also affect your ability to get another job since IVAs are public. Anyone including potential employers can get access to your IVA. An IVA also appears on a

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person’s credit report for years (usually six years) which can make it hard to get loans in the future. Last but not least, your IVA may fail if your circumstances keep changing and you struggle making repayments. You must consider all the above before deciding whether or not an IVA is a good option for you.

What next after an IVA?

Most IVAs last for 5 to 6 years although the period can vary and usually ends after all the debt is settled. Once an IVA ends, the insolvency practitioner is supposed to issue a completion certificate. You should ask for one. The practitioner should also ensure your IVA record is removed from the insolvency register.

Important considerations

You should come up with a detailed budget before taking an IVA to ensure you can repay your preferred amount comfortably. It’s also advisable to take time and choose a reputable IVA provider to avoid high fees. A reputable provider will also ensure you get the best possible terms with your creditors.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

New Bill Banning Letting Fees Presented in Parliament

A new bill which could mark the end of letting fees in England has been presented in the House of Commons.

Letting fees are separate from tenancy. The fees are charged by property managers or letting agents who conduct viewing and additional work related to letting property out. Letting fees are not refundable.

Besides bringing an end to the letting fees era, the bill also aims to cap tenant deposits to be equal or less than 6 week’s rent. Tenants stand to be protected from hefty deposits spanning months.

If passed, the bill could see tenants enjoy more than £240 million every year in savings. The Tenant Fees Bill was first mentioned in 2016. The draft was published in November 2017.

Holding deposits will also be capped at a maximum of one week’s rent.

Besides banning letting fees among other fees like referencing and admin costs and restricting the number of deposits tenants are supposed to pay, if passed, the bill will also;

Limit holding deposits to less than a week’s rent, and requirements must specify how the deposits are returned to tenants.

The bill will also cap the amount tenants are charged for a change in tenancy. Cap to £50 unless the landlord proves more costs were incurred.

The bill has also imposed a £5,000 fine for breaching the ban for the first time alongside a criminal offence if the person has been convicted or fined again for the same offence in the past 5 years. A maximum fine of £30,000 can be charged instead of prosecution.

The bill will also prevent landlords from repossessing their property through the Housing Act 1988, Section 21 until all unlawfully charged fees are paid back.

The proposed bill also amends sections of the 2015 Consumer Rights Act. The amendments will require letting agents meet specific transparency requirements in relation to property portals like Zoopla and Rightmove.

The bill will also see Trading Standards enforcing the ban and making provisions for tenants to recover fees charged unlawfully.

Lastly, the bill will also see money collected as penalties kept by local authorities and spent on local housing enforcement in the future.

The new measures will be subject to parliament’s timetables. If passed, the new rules will become law in 2019.

The new bill also specifies that, besides rent and deposits, agents and landlords will only have authority to charge their tenants fees related to; changes in tenancy or early termination requested by a tenant, utilities, communication services, council tax or any payments arising because of a tenant (like the costs associated with repairing damaged keys or replacing lost keys).

While commenting on the new bill, Housing Secretary Hon. James Brokenshire stated that the UK government is committed to building a housing market that is capable of meeting future needs. According to the legislator, tenants in the UK must be protected from unexpected costs which is why the government is delivering its promise to get rid of letting fees as well as put in many other measures for making renting more transparent and fair.

For many years, wages in the UK have failed to match inflation rates. The price of goods/services has been rising faster than wages. The growth in wages has been too slow despite widespread hopes that changes like Brexit would see the UK experience unprecedented growth.

Britain is also facing a debt crisis with recent reports showing that an estimated 300,000 British households are indebted to illegal lenders. There is an increase in illegal loan sharks “preying” on desperate Brits who survive on short term loans to counter the slow growth in wages.

In fact, the UK government has increased IMLT funding to help crackdown rogue high-cost lenders. The new bill is in line with the government’s effort to protect vulnerable citizens who are forced to rely on high-cost credit every month to pay for basic needs like utility bills and rent.

The FCA put a limit on the cost of payday loans in 2015, a move which saw unsustainable payday loan debt decrease by 50%. Consumer groups are pushing for the same cap to be implemented on other high-cost loans like door-to-door loans. As the UK government continues to introduce legislation to protect UK consumers, there is a lot of hope in the future even if wages don’t increase immediately.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Provident Financial Breaks Gloom, Reports Strong Start to 2018

According to a trading update by Provident Financial, all the lender’s businesses are performing well. The update has put an end to the doorstep lender’s recent problems. The Bradford-based lender offers high-cost loans to some of the most vulnerable families in Britain. Reports of a strong start have put an end to recent financial woes.

According to the trading update, all three businesses of the group have started 2018 on a positive note. This announcement comes after Provident Financial tapped £300 million of fresh investment funding. The lender had failed to reorganise its debt collection business and announced two profit warnings in the recent past. Provident Financial had also had a challenging year for shareholders before making the positive announcement.

In August 2017, the then C.E.O. Peter Crook resigned after the lender announced a 2nd profit warning in a span of two months. The second profit warning was triggered by a decision to overhaul home-collection business by hiring 2,500 customer experience managers to replace self-employed debt collectors. In the wake of the news, there was a massive exit of self-employed agents that happened faster than Provident Financial had envisioned resulting in poor debt collection rates.

The lender also faced a massive fine of £2m and compensation amounting to £169 million in February 2018 paid to its Vanquish Bank Unit consumers after the FCA found the lender guilty of malpractice. The regulator discovered that Provident hadn’t informed its customers accordingly about the total cost of add-on product, Repayment Option Plan.

The FCA is also investigating Provident’s car finance business Moneybarn. The regulator is concerned on how the lender has been evaluating potential car buyers before issuing loans. Although Provident Financial’s debt collection business is still making losses, the business is set to become profitable in 2019.

The trading update also covered the level of debt collection after Christmas which happens to be the busiest and most profitable period for high-cost lenders. Provident Financial debt collection arm enjoyed considerable business during this period adding that Vanquis Bank had been delivering profits beyond

expectations and although Moneybarn business was affected by bad debts, the performance was modestly beyond expectations with customer numbers higher by 24% compared to the same period last year.

The improvement was experienced despite the lender tightening the criteria for choosing suitable borrowers. In remarks made to mark an end to the first quarter, Provident Financial C.E.O. Malcolm Le May stated that the financial and operational performance of Provident Financial is promising and the lender is on track to post 2018 results that match internal plans.

About Provident Financial: Brief overview

Provident Financial is a sub-prime lender or “doorstep lender” in the UK. The company specialises in home collected credit, online loans, credit cards and consumer car finance. The company is listed on the LSE.

Provident Financial conducts business under different brands. Vanquis does credit card business. Provident Personal Credit is a home credit operations company while Satsuma offers online instalment loans. Other brands include Moneybarn for car finance business and Glo for guarantor loans. Provident Financial’s home credit brand Provident Personal Credit lends to individuals in their homes via local agents. The company serves over a million home credit customers.

Provident Financial was established in 1880 to offer cheap credit to residents of West Yorkshire. The lender was listed on the LSE in 1962. The company formed Vanquis Bank in 2002 to issue/operate credit cards. Vanquis focuses on pre-paid credit card business. In 2013, Provident Financial started its online short-term loan business Satsuma Loans before acquiring Moneybarn a year later. The Moneybarn acquisition was meant to give the lender exposure to automobile finance business.

Provident Financial has had a fair share of challenges ranging from fines to reprimands for questionable lending practices to breaching regulatory requirements. The lender’s stock has dropped by over 60% in a single day (22nd August 2017) after issuing a 2nd profit warning, events which saw the resignation of the then C.E.O., cancelation of shareholder dividend, a warning alluding to the cancellation of the full-year dividend in 2017 and announcement of an ongoing investigation by the FCA.

The latest trading update signalling the end of the lender’s financial woes is a “breath of fresh air”. If Provident Financial manages to maintain the current momentum, the lender may be able to reclaim long-lost glory.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Quick Guide to Debt Management Plans (DMPs)

What is a Debt Management Plan (DMP)?

A debt management plan or DMP is simply; a plan or program meant to help you repay your debts comfortably. DMPs are recommendable for people with non- priority debts such as store card debt, credit card debt, overdrafts or personal loans. Debt management plans are usually prepared by debt management companies. Your DMP provider will work with you and your creditors to come up with the most affordable debt repayment schedule for you that is agreeable to your creditors. A typical DMP will involve a borrower making one payment monthly to their DMP provider who in turn, pays creditors as per the agreed plan. Typical DMPs run for 3 to 5 years. They are part of debt consolidation plans designed to help individuals in debt regain control of their debt/finances while decreasing unsecured debt.

Types of debt that can be paid off using a debt management plan

Debt management plans are ideal for non-priority debt which includes; personal loans, overdrafts, building society loans, bank loans, money borrowed from family/friends, payday loans, credit card loans, store card debt, home credit, and catalogue or in-store credit debt.

Examples of debt that CAN’T be repaid of using a DMP include; council tax, court fines, utility bills (electricity and gas bills), child support, TV license, high purchase agreements, National insurance, income tax, VAT, rent, mortgage and any other loans secured using your home. Basically, all kinds of priority debt can’t be settled with a DMP.

Getting a debt management plan

Getting a DMP is easy. Many debt advice organisations in the UK offering free advice can help you get a debt management plan. Free debt advisers offer expert debt advice to many people in the UK every year. They are among the best-suited organisations to go to for advice when you find yourself in financial problems.

Before you choose a specific debt management provider in the UK, it is worth noting that all reputable providers have FCA authorisation. You can check for authorisation on the official FCA Financial services register. [1] This is particularly important when dealing with fee-paying providers.

Once you have identified a suitable provider, the next step is agreeing on a suitable monthly budget. This step is important for determining the amount of money you can afford repaying comfortably. After setting a budget, your provider will go ahead and negotiate with your creditors on new repayment terms. A good provider will be able to secure a good DMP that is agreeable to all parties. Most creditors don’t have a problem with people who owe them money as long as you show gestures of goodwill.

Important considerations

A debt management plan will help you take charge of your finances again. However, it doesn’t guarantee you “peace of mind”. Some creditors may still contact you. Also, as mentioned above, DMPs are available for non-priority debt only. It’s also worth noting that DMPs may affect your credit history.

What’s more; creditors are not obligated to accept DMPs. Creditors may also continue adding charges and interest which can increase the total debt repayment amount. A good provider should be able to negotiate great terms that offer safeguards against such practices. Lastly, it’s good to recognise the fact that DMPs may extend the amount of time it takes to repay your debts. Debt repayment methods such as contractual payments are faster.

Main advantages of DMPs

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Although DMPs attract some cons, they have notable advantages. One, you get debt consolidation without taking on additional loans. A DMP will also make you more organised with your finances. You could also improve your credit score and credit report over time. Last but not least, you stand to enjoy some reprieve from creditors or debt collectors because they have an incentive to stop pursuing you.

Why do you need a DMP?

You can choose to repay your debt on your own; however, this isn’t a good idea if you are in debt in the first place. Instead, you should focus on finding professional help externally. People who let debt overwhelm them before they can seek help face serious financial problems. For instance, no one may be willing to lend you by the time you decide to seek help. Your finances may also spiral out of control. Furthermore, taking long to seek help extends the amount of time you need to become debt-free. You can also get free debt advice in the UK!

Reference

[1] https://register.fca.org.uk/

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Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

No. of UK Pensioners Seeking Payday Loans Has Risen by 200% in 2 Years

According to the latest statistics from payday loan company CashLady, 1.4 million Britons have joined the poorest 10% in Britain. The new shocking figures indicate a 95.2% increase (since 2015) in the number of Britons aged 65 years and above relying on loans to boost their monthly pension.

Hard-up pensioners have increased their borrowing by £157 (from; £1,478 to £1,635). The latest statistics show that this age group is now borrowing approximately £400 in payday loans (now dubbed Grey Day Loans) monthly to survive.

For the first time in Britain, charities have warned of the disproportionate number of seniors seeking financial aid for subsistence purposes. A record 1.4 million pensioners have joined the poorest 10% in Britain. Only 1 million pensioners were part of this statistic in 2015.

The statistics indicate a 26% rise in the number of loans requested despite a 10% increase in monthly income for pensioners. This shows that the average pensioner is struggling to cope with the increasing cost of living. In just two years (2015 to 2017), the average loan amount requested has risen from £302 to £382.

According to the MD of CashLady Chris Hackett, the figures show there is an increasing number of seniors struggling to get by solely on their pension. According to Hackett, inflation levels are primarily to blame. Inflation has reached a historic high. Although pensions have increased, there is still a growing shortfall between the cost of living and pension income.

Personal Finance Society statistics

This new data follows a recent report released by the Personal Finance Society showing that the poorest pensioners receive 75% of their pension income from the state pension. The Personal Finance Society report shows that millions of seniors in Britain are about to become entirely reliant on the £7,000 per year basic state pension for survival. Numerous charities have come forward urging the UK government to do more to support the elderly who are struggling.

Charities’ take

According to Caroline Abrahams, Age UK Charity Director, the UK is at risk of assuming all elderly persons are living comfortably when that isn’t the case. The recent pensioner poverty statistics clearly show that elderly pensioners are at risk once again.

According to Abrahams, surviving in Britain on a low income/wages is hard enough for individuals in any age bracket but extremely stressful for older persons, especially those living on their own and struggling buy food and pay utility bills.

Abrahams believes the State Pension is more important now, more than ever as a tool for fighting against pensioner poverty. She is however of the thought that there is more help for those in dire need. For instance, elderly pensioners can claim benefits they are entitled to. This can make a great difference according to Abrahams given the fact that a record £3.8 billion in benefits goes unclaimed by elderly people every year in Britain. Before seeking alternative income such as taking out payday loans to pay for utility bills or buy essential goods and services, elderly pensioners are advised to exhaust their cash benefits.

Age UK is one of UK’s top charities which helps elderly pensioners get unclaimed benefits. Before pensioners become so desperate to the extent of seeking help to pay for essentials and insolvency costs, they should consider contacting charities like Age UK.

Turn2Us is another charity that offers similar help. The national organisation helps the needy/poor access charitable grants and welfare benefits among other types of financial help. A statement from Turn2Us shows that there is an increasing number of female pensioners seeking Turn2Us’ help.

Many pensioners in the UK don’t get the government assistance they are entitled to like Winter Fuel Payment and Pension Credit. This is because many people have been able to live all their lives without needing these benefits before so they only naturally consider credit which is readily available whenever they need help.

In an interview with The Mirror, Pritie Billimoria, Head of Communications at Turn2Us stated that; most people who have been comfortable most of their lives risk being financially week after retirement. According to Billimoria, struggling financially when you are older can be very distressing which is why elderly pensioners need all the support they are entitled to.

Age UK offers FREE financial advice and help to elderly persons with financial problems. Contact 0800 169 6565. Website: www.ageuk.org.uk.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

The FCA Poised to Protect UK Consumers from High-Cost Credit

Since 2017, the FCA has been demonstrating an urgency to come up with new rules aimed at protecting Britons from high-cost credit. According to the latest reports from the regulator, UK borrowers could soon have better laws protecting them from doorstep lenders as well as household appliance rental companies. According to a statement released by the FCA (Financial Conduct Authority) on 31st January 2018, the regulator has concluded a review of the financial market. The review which has been ongoing since July 2017 shows an urgent need for intervention.

The FCA has promised to intervene although it will take actions that don’t compromise access to credit to individuals who can afford repayments. The regulator is planning to publish proposals and conclusions in Spring.

The Regulator’s take

According to Christopher Woolard, Executive Director for Strategy & Competition at the FCA, the regulator must address the variety and availability of credit. The regulator also needs to find ways in which the credit market works better for consumers.

Besides proposing new rules/laws where there is clear evidence of consumer exploitation, the FCA is also looking at solutions revolving around alternatives to high cost loans.

The FCA has identified specific consumer segments that are most vulnerable. One such segment is the rent-to-own consumer segment. The FCA’s analysis finds this particular segment extremely vulnerable given the outstanding debt of this segment doubled in the recent past from November 2014 to November 2016 (£2,000 to £4,300 respectively). Customers most affected are those who pay for household goods such as television sets and fridges over time.

The FCA is also concerned with customers who use overdraft facilities. The regulator is concerned about the high fees associated with unarranged overdrafts especially in comparison to the amount lent. The FCA is seeking more data from lenders who offer doorstep loans (loans offered in people’s homes).

According to the latest statistics, 700,000 Britons took out home-collected credit loans in 2016. The same statistics show that 1.6 million Britons had outstanding home-collected loans by the end of 2016 which translates to a record $1.1 billion pounds.

Doorstep loans aside, the FCA is also concerned about catalogue credit particularly, the complexity of fees/charges structure as well as the variety of repayment options available. Catalogue credit is offered to people buying things from catalogues on credit.

FCA efforts

Back in 2015, the FCA introduces a cap on the amount of interest charged on payday loans. The move has had a positive impact on the payday loan industry. Payday loan borrowers no longer have to pay more than the loan amount total in fees/charges. The cap has been deemed effective in getting rid of unscrupulous lenders who were thriving in a poorly regulated environment. Borrowers can now rest assured they won’t be exploited when taking payday loans which are supposed to assist in times of emergency and not act as a gateway to debt. The payday loan cap was introduced after widespread complaints and criticism from legislators, the clergy and public on the high interest charged on payday loans taken by the most vulnerable customers.

Protecting yourself from high cost loans

Although the FCA has done a lot, more needs to be done. The FCA will review the current payday loan cap in 2020. In the meantime, you need to protect yourself from high cost loan segments that are yet to be regulated adequately. Here are some tips to consider.

  1. Shop around: Although most people who consider taking out short term loans are usually in financial distress, it is advisable to shop around just to make sure you are getting fair terms. Shopping for loans in the UK is easy today. You can use loan comparison websites to find suitable and affordable loans fast and easy.
  1. Start an emergency fund: The main reason why people turn to lending institutions when in distress is because they don’t have their own funds to use in emergency situations. An emergency fund will reduce your overreliance on short term loans which will in turn reduce your exposure to high cost credit risks.
  1. Borrow from reputable lenders only: Lastly, borrowing from licensed and regulated lenders only can shield you from unfair fees and charges. The short-term lender you choose should be regulated by the appropriate body such as the FCA. You should also check online reviews to see what existing customers are saying about a lender before you take out any loan.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Consumer County Court Judgments (CCJs) rise by 24% in 2017

CCJs against consumers in the UK have risen drastically according to the latest statistics by Registry Trust. In the third quarter of 2017, 313,719 consumer county court judgments were registered in England and Wales representing a 24% increase compared to the same period last year.

Background

What are CCJs?County court judgments are court orders in the UK (England, Wales & Northern Ireland) that are registered against individuals who fail to repay money they owe. ValueThe total value of Q3 2017 consumer county court judgments stands at £467,861,240 representing an 11% increase compared to the same period last year. The average value of a consumer CCJ has however dropped by 10% to £1,472. At its peak, in 2009, the value of a consumer CCJ was at £3,680. The value has been dropping ever since. The number of consumer high court judgments issued are however higher.

In Q3 2017 for instance, 45 judgments were issued against 17 during the same period last year. Collectively, the value of county and high court judgments is slightly lower (by 3.7%) compared to the same period last year. The value stands at £471,960,510 compared to £489,987,967 last year. The latest statistics show that the number of CCJs is increasing for the fifth consecutive year.

Interpretation

The new data suggests more people are struggling financially. A closer look at the decreasing value of a CCJ shows that people are having problems settling smaller loans now more than ever. Considering there is an increase in the number of judgments and a decline in their value, this can only mean that people are having a hard time repaying small or short term loans. According to Malcolm Hurlston, Registry Trust Chairman, the trend can also mean borrowers with plenty of commitments are being detected early in the lending cycle. Hurlston believes responsible lending practices are a leading cause of rising CCJ numbers. Impact of a CCJ to a consumerConsumers with a CCJ have a harder time accessing loans such as mortgages from mainstream providers. It gets harder for consumers with more than one CCJ. However, there are still lenders such as ”sub-prime” lenders who are catering to borrowers with CCJs.

How CCJs work

Receiving a CCJ claim: CCJ claims come in the form of a letter. If you happen to receive a claim, it is advisable to consult a debt advice service. CCJ claims come after creditors have sent default notices or warning letters. According to the Consumer Credit Act, a creditor must inform you of pending payments and the consequences of defaulting before they launch a CCJ claim. The Consumer Credit Act gives borrowers 14 days to act before a CCJ claim is launched. Individuals who have CCJs receive a letter or notice alongside a default information sheet.

Responding to a CCJ claim: It is advisable to solicit professional advice immediately preferably from a debt advice service the moment you receive a claim letter or notice. Seeking professional help is essential because it helps you avoid making a costly mistake. For instance, the court can consider your circumstances when deciding your fate (such as how you should pay the debt if you handle the claim correctly from the onset.)Ignoring the notice or letter only compounds your problems. For instance, the court can rule that you repay the debt at once which can be impossible leading to more problems. It’s worth noting that you can get free debt advice services, so you have no reason to mishandle a CCJ claim. You have 14 days to respond/reply to a CCJ claim. Simply fill in the reply form and send. The form requires personal information such as income and expenditures to show the court your current financial standing. When replying, you can admit the claim or agree that you owe money. In such an instance, you need to reply as described above. You can also file a defence if you don’t agree with the information in the claim, i.e., if the amount you owe is wrong. You need professional advice when filling a defence.

Lastly, you can reply to a CCJ claim by asking for more time. This option should be taken if you need more than 14 days to file a defence. This option acts as an acknowledgment that you have received a CCJ claim. Receiving the judgmentAfter responding to a CCJ claim, the court can issue two types of judgments. One, a judgment by installments which simply allows you to repay the debt in installments over a specified period of time. This type of judgment is highly likely if you agree to a claim and make a repayment offer in your reply. If you choose to ignore a CCJ claim, the court is most likely to issue a judgment forthwith requiring you to settle the debt immediately. You are free to request for a redetermination if you are not happy with the judgment. If you fail to adhere to the terms of the final judgment, i.e., you don’t pay up as instructed, the creditor can go back to court and request for a; changing order, attachment of earnings order or bailiff action order. A bailiff action order gives the creditor permission to visit your business or home to collect their debt or seize property/goods that can be sold to settle the debt. An attachment of earnings order gives the creditor the power to have their debt extracted from your wages. A charging order gives the creditor power to secure the debt against your property.

Can CCJs affect a person’s credit record? You must repay in full within a month (30 days) after receiving the judgment or risk having your credit record damaged for six years.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.