Scott Nelson is a renowned debt expert who supports people in debt with debt management and debt solution resources.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
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For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
We know that having a catalogue debt can be hard – it might keep you up at night, thinking about how to sort it out. This happens to many people. In fact, over 170,000 people visit our website each month to get guidance on debt solutions.
Citizens Advice says that catalogue shoppers who miss payment deadlines get charged very high fees, sometimes more than twice what they borrowed. 1
But you’re not alone in this. There are many ways to tackle your debt, and we’re here to help you find the best one.
Could you legally write off some debt?There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.
Answer below to get started.
This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.
So, you’ve got a catalogue debt that you can’t pay – what now?
Firstly, don’t panic. You’re not the first person to realise they can’t pay their catalogue debt, and you won’t be the last. There are a number of options you can consider. The crucial thing is that you do something, even if that’s just to let your catalogue know that you can’t meet the repayments in full at the moment.
You might need to make an order of priority for your debts if you have more than one.
If you are in a similar position to this forum user, you might benefit from speaking to a debt charity. Their advisors will be able to walk you through your options in detail and find the best course of action for you.
In many cases, it’s possible to get an informal agreement in place with your catalogue which reduces the monthly cost. They may be willing to freeze the interest charges and suspend late payment fees to help you clear what you owe.
Your account will be suspended if you’re on a repayment plan so you won’t be able to carry on ordering from the catalogue. But you will be clearing the debt that you owe, and that’s the most important thing.
One word of caution: don’t be pushed into agreeing to make repayments that you can’t really afford. If the catalogue won’t accept what you’re able to offer, there are alternatives you can consider.
Having lots of small debts can be harder to keep track of than one single payment. It can also work out to be more expensive with multiple charges and fees.
If your credit rating is reasonable, you may be able to consolidate all your unsecured debts, including your catalogue. This means that you clear everything you owe leaving one repayment every month which should be lower than all of the individual payments together.
Debt consolidation loans can work well providing you don’t run up the same debts again. The risk is that you consolidate your debts, and then order more from the catalogue leaving you with both the loan payment and the new catalogue debt to repay.
If you go down this route, you’ll either need to be disciplined enough to not order any more, or close your account.
It’s not as easy to find 0% balance transfer credit cards as before, but there are still some offers out there. If you qualify, a balance transfer can be an easy way to reduce your monthly commitment. With no interest to pay, it’s much quicker to clear the balance and avoid the problem of persistent debt.
For this solution to work, you’ll need to be able to repay the debt during the 0% interest period. Before taking the plunge, add up your income and outgoings so you’re sure you can afford to clear the debt in time.
Similar to a debt consolidation loan, you’ll also need to be disciplined enough to avoid racking up the catalogue debt again.
Your catalogue company will be keen to resolve the debt. If it’s been a while, they may be willing to consider a reduced lump sum settlement. Your account will still be suspended but the payment will make the debt go away for good.
If you’re unable to come to an agreement with your catalogue in an informal way, you might want to consider whether an IVA or bankruptcy would be a potential solution. These are formal debt solutions and won’t suit everyone’s circumstances.
You can read more about IVAs and bankruptcy here.
We can’t emphasise enough that there’s not a single solution which will fit everyone’s situation perfectly. Getting advice from a debt charity such as Step Change might help you to decide which option would be best for you.
If you miss any of your payments, the catalogue will initially just ask you to clear the arrears and catch up.
If you’re not able to do this, your account will be closed which means you won’t be able to buy anything else. The catalogue will mark your account as in default, and this will be reflected in your credit record.
What happens next depends on the amount you owe and the internal procedures of the specific catalogue. Typically the debt will be passed to a debt collection agency but if the amount is significant, court action may ultimately be taken against you.
Some debt solutions can:
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
It is possible for a catalogue debt to result in a CCJ but there are lots of stages before it reaches that point. If you are proactive in managing your debt, there’s a very good chance that you’ll be able to avoid a CCJ.
Catalogues prefer to avoid legal action wherever possible. It involves extra work, extra expense and it doesn’t guarantee they’ll get their money back without further enforcement action. Therefore, if you talk to your catalogue about what you can afford to pay, there’s a very good chance they’ll be willing to set aside debt collection and formal action.
However, if you don’t get an agreement in place for your catalogue debt, they may apply for a CCJ.
A County Court Judgement (CCJ) is an order from a judge that states you have to pay the debt. This means that the court agrees with your creditor, and you owe the money.
Your judgement will include the following:
Unless you pay within one month of the CCJ being issued, it will be recorded in the Register of Judgements, Orders and Fines for 6 years. If you pay off your debt within these 6 years, you can request that your judgement is marked as ‘satisfied’ on the register.
To do this, write to the court with proof that you have paid off the debt in full.
If you manage to pay within one month of the CCJ being issued, the judgement will not be recorded in the register. You will need to write to the court explaining that you have paid and provide proof.
CCJs are also visible on your credit file for 6 years. This will make it almost impossible for you to get credit during this time.
This is because companies use your credit file to see if you are a ‘high-risk’ customer – someone who might have difficulty paying their bills on time. If you have a CCJ, you have had such trouble paying back your debt that someone had to go to court about it.
Understandably, companies are going to be reluctant to give you credit!
After 6 years, it is no longer visible on your credit report and you should find it easier to get credit again.
Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.
I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.
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If you’re struggling with catalogue debts, your first concern may be whether a bailiff is going to be knocking on your door. While catalogue debt needs to be dealt with, it’s not classed as a priority debt. This means the catalogue can’t arrange for bailiffs to pay you a visit.
However, this doesn’t mean that catalogue debt can’t eventually end with enforcement action, and this could include a bailiff. If you don’t arrange a repayment plan with the catalogue, and stick to the agreement, they may apply for a CCJ. Failure to repay a CCJ can lead to bailiffs visiting.
You don’t need to worry about bailiffs right away but it is important to deal with the debt to prevent a potential visit further down the line.
No, don’t worry. It’s not nice having unpaid debts hanging over you, but you won’t end up in prison due to an unpaid catalogue bill.
This type of debt is known as non-priority which means it’s not a criminal offence to default. Agreeing a repayment plan can help you to clear your catalogue debt, but you should only do this if you’re able to meet your priority debts first.
Examples of priority debts that should be paid first include:
You should make sure you’re able to pay all of the above before beginning to think about how much you can pay towards your catalogue debt.
Could you legally write off some debt?Answer below to get started.
This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.
