If you are unable to pay your debts as they fall due or have fallen behind in your payments to creditors then you may have already begun to suffer from creditor harassment. It often starts with innocent looking reminder letters and then slightly more aggressive ‘overdue’ letters.
If you are unable to make the repayments demanded creditors may ramp up their chasing to sending you emails or texts and if this doesn’t have the desired effect, they may start to phone you on your home landline, on your mobile and even at your workplace. The final stage of chasing may involve personal visits to your home or even to your workplace or both. Creditors sometimes contract out the more unsavoury parts of the hounding to debt collection agencies.
Does harassment work? It must do since consumers in the UK are bombarded with phone calls and emails every day by creditors or agents acting on their behalf chasing up repayment of debt. If it didn’t work surely creditors would stop flogging the dead horse and use other means of promoting repayment. People do react to the creditors who shout longest, loudest and most frequently. So creditors are not likely to stop these harassment actions anytime soon. People are not going to be spared the worry and stress caused by such actions.
Is there anything consumers can do? Clearly, you can stop the harassment by paying off your debts and maintaining payments as they fall due into the future. What if you can’t do that? For many people it is simply not an option. You may even be insolvent right now and you may never be able to pay off all your debts. Does that mean you are destined to serve a life sentence of creditor harassment? No, you are not. There is a solution – rather there are several possible solutions. Each of these solutions affords some reduction in the level of creditor harassment and some solutions will eliminate harassment permantly.
Provided you are truly insolvent you can enter into an Individual Voluntary Arrangement (IVA) or petition for your own Bankruptcy (BCY). These are two personal insolvency processes that protect you from your creditors and that have the full weight of the law behind them. Even if you are not insolvent, you can enter a Debt Management Plan (DMP) with your creditors. You can do this yourself by reaching agreement with each of your creditors as to how you will repay your debts to them. This is sometimes called a self administered DMP. Most DMPs however are administered with the assistance of companies which specialize in setting up DMPs between consumers and their creditors and then administering these plans over a period of years. While creditor harassment will usually diminish when you enter a DMP, it will not disappear altogether. This is because creditors are not bound by law to accept the DMP proposals.
Not so in an IVA or BCY. Once the IVA has been approved or the BCY Order granted, creditors must desist from chasing the debtor and must deal with the Supervisor of the IVA or the Trustee in BCY in seeking repayment of the debts. Creditor activity in chasing debts may continue for six to eight weeks from the date of approval of the IVA or from the date of the BCY order. This is mainly because large banks, credit houses and other lenders are not terribly efficient at informing their various departments about the IVA or the BCY and the creditor’s debt collection department may be the last to hear of an approved IVA or of a BCY order.