When you miss payments, it is common for creditors to send letters that threaten further action such as court judgments or bailiffs.
Often creditors will describe ‘possible’ action rather than what they are actually going to do. If you read these letters carefully, you will usually find they refer to actions they ‘could’ take or ‘may’ take.
We recommend that you do not ignore these letters. Some will be regular statements or reminders, but others such as default notices or letters from collection agencies are more important. In some cases, creditors take court action and send important legal paperwork to you through the post.
While some letters are designed to put pressure on you to make payments, some are more serious. In all cases, creditors must follow Office of Fair Trading (OFT) guidelines on fair debt collection when writing to you.
Legal action is costly to any creditors and as long as you can show them you cannot afford their payment, they are likely to accept a reduced payment towards the debt. The consequence may be that you cannot use the credit facility any more, or borrow any more money from that creditor. But this is better than legal action.