Problems with payments are a very common scenario for thousands of UK residents; it can lead to many serious debt problems if not addressed correctly.
Problems with payments can arise in many different forms, if you are an owner of a small business; a dip in profits or a poor cash flow can lead missed payments. This can also be the case if you have recently lost your flow of income and your monthly payments are unchanged.
Problems with payments can also occur with the failure of direct debits. If you have been away, or lost an amount of disposable income, your direct debits may fail and payments can mount up if unattended.
One of the most common reasons for problems with payments is the simple fact of people over burdening themselves with loans, cards or mortgages.
This can easily be done at times such as Christmas or summer holidays, perhaps a relative is getting married or you have simply over done it at the shops. Not having the ability to then make regular payments against this credit can happen if you misjudged your disposable income or perhaps even lost some, or all, of your income.
Topics covered in this article:
- What are the implications of missed payments?
- What can be done?
Implications of missed payments
Not meeting payments can lead to a number of things.
Miss payments of loans or credit cards can mean you being put on default; this immediately affects your credit rating.
Late payments or no payments may lead to extra charges; this is increasing payment that you are already struggling to pay.
Not paying your bills can easily lead to the service being stopped. This may be a credit card but it also maybe something that is a necessity such as electricity or gas.
Legal action can be taken against you for payment problems due to a contract breach between yourself and the creditor.
Not paying secured payments such as a mortgage could eventually lead to a seizing of your assets; this is most commonly your house.
What can be done?
The most common debt solutions used by people struggling with payments are:
In more extreme cases a solution may be: