Mounting debts owed to catalogue companies resulted in 25,000 calls to Debt Help Desks in the past twelve months, according to figures released this morning.
The various help lines received more calls in relation to catalogue debts than calls related to rent, mortgages or even payday loans. There is also evidence that the problem is growing with over 7,000 calls received in the first quarter of this year.
Catalogue debt is the fifth most common problem debt dealt with by debt advisers, behind other issues such as energy debts, credit cards and council tax payments.
Joanna Elson, chief executive of the Money Advice Trust, said catalogue debts go largely unmentioned in public these days, but advisers report hearing from almost 100 people every day struggling to repay such debts.
She added: ‘Many people might be surprised to hear we get more calls on catalogue debts than on things like mortgages, rent and payday loans. When buying from a catalogue, many people don’t realize they are signing a consumer credit agreement, which means the debt is enforceable in the courts’.
‘In addition, most people don’t realize that missing a payment on a catalogue debt will usually invalidate any special low or zero per cent interest deal’
The report was based on figures calculated from data measured in February 2016.
Bankruptcy UK has noticed a marked increase recently in the number of clients returning with post bankruptcy issues, following an apparent ‘tightening up’ of procedures by Official Receivers i.e. the Insolvency Service.
It appears that clients are now routinely receiving Income Payments Agreements (IPAs) despite accurate Income and Expenditure documents clearly showing that there is no surplus income. This is a worrying development and now, more than ever, the Public needs support in this critical area.
An Income Payments Agreement is an arrangement designed to return money to the creditors over a 36 month period. Therefore, even a ‘modest’ IPA of say £75 per month ends up costing £2,700 over the three year period, something that would be a burden if not warranted.
Bankruptcy UK has set up a dedicated team to resolve these issues and has achieved success in challenging and overturning the IPA decisions levied by the Official Receiver’s Office. This is unique in the Insolvency Services sector, as most companies simply produce the paperwork and ‘wave the client goodbye’.
Another area of concern is motor vehicles. The allowable limit has reduced from £2000 to £1000 and even then it is far from certain that the vehicle will be allowed. In a recent case, a married couple had a vehicle worth £800 attached on the grounds that the husband had a company car.
The fact that the husband was away on business four days a week and there were four young children to shuttle around did not impress the Official Receiver. Fortunately, Bankruptcy UK challenged the decision and had it overturned.
It appears that there has been some type of directive to Official Receivers to ‘crack down’ on bankrupts and to obtain a monthly payment at all costs. Of course, no one will admit to this, but this is quite clearly what is happening. Professional assistance with bankruptcy is therefore now more important than ever.