Credit cards are a secure and convenient way of shopping and will provide protection for the purchase of items of over £100 under Section 75 of the Consumer Credit act, as well as provide perks such as cashback deals. However, what may begin as a small personal loan could spiral into huge arrears due to late payment charges, borrowing fees and bank administrative costs.
It is easy to ignore credit card statements with the promise to clear the balance or budget a later date. But all the time, the bank is adding more to the loan. Radical steps must be taken to stop the credit from growing out of control. In some cases, it may be possible to have the debts written off.
Steps to Wipe Credit Card Debt
Establishing the size of the debt is an uncomfortable task, but is an essential first step to the possibility of having credit card debts written off legally. This means adding all credit card statements calculating overdrafts, hire purchases and personal loans.
The next step is seeking the support of a good free debt counseling service. The following bodies are dedicated to helping those who find themselves in debt.
- National Debtline (NDL)
- Consumer Credit Counselling Service (CCCS)
- Financial Ombudsman Service (FOS)
- Office of Fair Trading (OFT)
- Citizen’s Advice Bureau
- DirectGov has an online benefits adviser that can calculate the entitlement of certain benefits and tax credits and the amount
- Money Saving Expert, an excellent online financial resource
Payplan, a free debt management company will draft a debt management plan (DMP) to be agreed between and debtor and the creditor on a fair and affordable way to pay the debt. Once the DMP is in force, bank charges and interest are frozen. Any unreasonable behaviour on the lender’s part, such as demanding huge installments upfront or harassment, will not look good if the matter goes to court and could rule against their favour.
With all the facts, the debtor may discuss his or her options with the credit counselor. Important information regarding the debtor’s rights, for example, will help make him or her feel more empowered.
Could Credit Card Debts be Written Off?
If it comes to light that the credit card company has missold a loan agreement, the debt could be deemed null and void. This means the debt could be written off if the credit company has, for example, sold payment protection insurance along with the loan without the borrower’s knowledge. Reading the small print on the agreement will reveal if this is the case.
The loan agreement may not be enforceable if there are any admin errors, such as not quoting the correct APR or if a copy of the original contract has gone missing. However, some amendments have been made to the Credit Consumer Act (CCA) since April 2007, which rule more in the lender’s favour. A more serious error, such as a name mix up or a faulty utility meter could result in the debtor paying the wrong debt.
The credit company must be transparent regarding their calculation of the debt itself. Ambiguity, evasion or unfairness on anything will be pointed out to the judge if it goes to court, which will go against the lender’s favour.
The National DebtLine, PayPlan and the Citizen’s Advice Bureau provide stock letters, requesting that the part or all of the debt be written off by the lender. If the lender refuses, the borrower may invite the lender to take him or her to court. The court costs may prove more costly than the debt itself, which could work in the debtor’s favour, particularly if the lender or has violated any of the guidelines set out by the Office of Fair Trading.
Protection for the Debtor
The distressed will find any communications from creditors difficult to face and may be plagued by telephone calls and letters. It is important that the debtor is aware of their rights in regards to the creditor’s attempts to recover the debt via harassment or any other aggressive means.
MIND recommends that the Office of Fair Trading (OFT) should be made aware of any poor practices of lenders in chasing up debt. If this has been shown to be the case, the credit collection agency could have their licence taken away and this will not look good if the dispute goes to court. Solent Mind provides a service that assists those who are in debt and are suffering mental distress or who have mental health problems due to debt crisis.
Best Free Credit Card Relief
Debt worries can be a lonely problem, but there are many great debt counseling services available to help those in need. By knowing debtor’s rights, there may be a way of finding a more affordable way of paying off the debt and even having the credit card debt written off. However, the debtor must follow guidelines and the advice given by the debt counselor rather than try to deal with the problem alone.
Useful Links
- Directgov
- PayPlan
Rachel Shirley - I have written and illustrated several art instruction books entitled Oil Paintings from your Garden and Oil Paintings from the Landscape ...
