A financial crisis is a situation where action is needed to prevent undesirable consequences. The most common financial crises will arise from a build-up of arrears of rent, mortgage, council tax or utility bills or possibly from non-payment of court judgements. Non-payment of these debts can have the most serious consequences.
- Non-payment of rent can lead to loss of our home
- Non-payment of council tax or court judgements can lead to imprisonment
- Non-payment of utility bills can lead to loss of supply of essential services.
Immediate action is needed in all of these situations to prevent these undesirable consequences.
You should speak to your creditor immediately you are aware of the problem to discuss your options. Mostly, creditors will want to reach agreement with you about resolving the problem without recourse to more drastic measures. However, if you are unable to reach agreement about a solution that is realistic for you or if you are faced with an immediate financial crisis and do not know how to manage the crisis you should seek advice without delay.
In most cases an immediate financial crisis of this kind will arise because of a longer-term household budget problem. Sometimes a budget problem arises through neglect or miscalculation, and sometimes families struggling to make ends meet in difficult circumstances may understandably feel under pressure to agree payment when faced with the tactics used by some debt collectors to encourage payment of outstanding accounts. These tactics can include persistent telephone calls, threatening letters or personal visits to your home by Debt Collectors. The pressure created can lead offers of payment based on the degree of pressure experienced rather than the real priority of respective debts. Creditors are allowed to make legitimate efforts to encourage payment but are not allowed to harass you into payment. Creditors or their agents are not allowed to:
- Take your possessions without an order from the court
- Create a nuisance through repeated phone calls
- Make offensive or threatening phone calls
- Use abusive language or behaviour
- Create embarrassment for you in front of neighbours or colleagues
- Falsely claim criminal action can be taken against you
If you experience any of these tactics you should complain directly to the creditor, or their trade association. If this does not stop the behaviour you should contact your local Trading Standards office. In extreme cases Police involvement should be considered.
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