No creditor should take legal action where a debtor is genuine, in contact, and playing fair (holidays in the Mediterranean whilst paying your creditors £1 per month is not playing fair and you should expect a call from the debt collector).

The Income & Expenditure Statement is part of the creditor assessment of the debtors financial position, together with the knowledge and experience of the debtors collection staff. It should be noted that what seems like a great reason for you not to pay sounds like another excuse to the collection staff (whether true or not). Collection staff have to sort out the ‘won’t pay, can’t pay’ debtors by pushing all debtors to the limit of reasonable stress. If they could not sort out whom was who they would have to sue everyone as the only real alternative.

If a creditor contacts you by telephone you must bear in mind that the companies that lend money are in the business of revolving cash. As such they will not give the debtor a comfortable experience. Collection staff are trained to find short term answers to your problems i.e. if you called them asking to miss one payment or they rang you because of one missed payment and you asked to miss that payment they would respond in this order:

‘NO’.

‘You have one week’.

‘Pay half now, and half in fourteen days’.

(I will stop at No.3 in case I get in trouble from the finance companies collection departments)

The point is clear, if you can just about manage the payment, pay it. If you cannot pay under any circumstances, you must say so and be very resolute. Making promises you cannot keep looks good on the collection staffs work report, however, it also means that you cannot stick to an arrangement. Breaking an arrangement is giving a finance company a legitimate reason not to make further arrangements and to sue you.

For a finance company to consider a long-term arrangement you will have to have many debts beyond your financial resources. If your finances are ‘a bit tight’ you will be expected to meet all of your debts on time, and in full. That said, if you lost your job, or you are self-employed and sick (and you did not take out the finance company’s Job Loss/Sickness Insurance) and you complete an Income & Expenditure Statement and have been fair with your living expenses, your creditors (in the main) will give you a high degree of understanding (never expect their blessing).

If you feel that you have a legitimate case and the person dealing with your request (be that by telephone or letter) is not being fair with you (as does happen) you should ask to talk to a supervisor, or write to the Collection Manager. Explain that you acted responsibly by contacting them (before they contacting you), that you have completed a fair Income & Expenditure Statement based on acceptable standards and that you have made/will make the first payment of your proposed arrangement, however, you are at an impasse with their colleague.

The biggest problem with debts is to have to face up to them! Most people with debt problems adopt a form of amnesia. The same human ability that stops us from remembering a ‘serious accident, seems to take over when we have ‘serious debts.