You can consider reducing your debt payments if you can no longer afford to pay your regular payments to your creditors.
Usually, for consumer debts such as credit card debts, your creditors cannot compel you to pay what you can’t bear. Of course, you must be honest in reducing payments for the reasons that your income cannot suffice debt payments and living costs.
While this can be possible, you’ll be in trouble facing the consequences of your actions. Your creditor might start an action to reclaim the debt and urge you to settle your debts on time. Besides, the same as delayed payments, reducing your payments can potentially affect your credit file and could result in additional interest and extra charges.
Also, if your account will be on default if you decide to reduce your debt payments rather than following the initial agreement.
So, before you consider making reduced payments, you must be aware of the risks and ask for debt advice to know the right debt solution for you.
When Can My Creditor Forced Me To Pay Debts?
There are some cases where reduced payment is not an alternative for you. This entails that you have to endure paying off your debt according to what your creditor wants regardless of whether you are legible to reduced payments on your other obligations.
Two of the reasons why you have to classify debt as a priority and pay the rate imposed are as follows:
Your creditor has the authority to collect the money at a rate they decide
Some of these creditors have special legal powers, allowing them to take money from you. Some of these creditors have special legal powers, allowing them to take money from you. An example would be government debts. These are child maintenance, council tax or fine, which can be deducted from your wage or state benefits at a fixed amount.
Another instance is failing to pay a CCJ or decree. The creditor can request for an earning arrestment from the court that allows money t to be taken directly from you. Thus, regardless of whether you want to reduce your payment, it would still not be possible to do so.
The effects of reducing payments are seriously damaging, making the situation worst.
Some creditors have a way to impose legal actions if you failed to pay your debts. Some of which are mortgage, utility bills, HPA or hire purchase agreement, logbook loans. Failure to settle these types of debts and other debts, there’s a big chance of losing your assets or essential goods. Besides, your creditors can take matters to court or can petition to make you bankrupt.
Though your creditor may not be able to take money directly from your wage or income, ignoring these debts will lead to making you pay for what your creditor wants as an arrangement.
Free Debt Advice
Making debt payments each month deprived you of spending the money on travel, vacation, or things that are not essential. Most of the time you have to do some penny-pinching remedies just to save money for your needs. Others may have tried being frugality while living within their means. Being in bondage with your debt, we can help you with our free debt advice now.