No-one likes the prospect of a visit from the bailiffs, but could having a Debt Management Plan in place stop them in their tracks? Find out more in our quick guide
What are bailiffs and what powers do they have?
Bailiffs, also known as enforcement agents, are professionals authorised to collect debts on behalf of creditors (those you owe money).
They can work independently or be employed by a private company, your local council, or the County Court.
Your home or business might receive a visit from the bailiffs if you have unpaid debts such as parking fines, Council Tax bills, or court judgements. They might also visit to serve you with court documents or a summons.
Once a bailiff has been appointed, they should send you a letter of their intention to visit at least seven days in advance. This gives you the opportunity to get in touch with them and arrange a new payment plan, if possible. If an agreement isn’t reached, they’ll usually visit your property and attempt to make a list of goods that could be recovered to repay the debt.
Even so, bailiffs can’t enter your home unless certain conditions are met and they must not force entry, come in through an open window, or use a ladder to access your property. You’re not obligated to open the door to them and can ask them to communicate with you through the door or letterbox.
What is a Debt Management Plan?
A Debt Management Plan (DMP) is an informal agreement that can be made between you and your creditors if you’re struggling to pay your non-priority debts. You can set up a DMP yourself or work with a debt management company who will manage the payments and liaise with your creditors on your behalf.
Your DMP will propose a new payment plan – usually with reduced monthly payments – that allows you to repay your creditors over a longer period. If you work with a company to manage the DMP, you’ll make one payment to them each month and they’ll then split it between each creditor.
While having a DMP can reassure creditors that you’re taking your debt seriously and trying to make payments, they’re not legally binding. Your creditors aren’t legally obliged to accept reduced payments, freeze your interest, or suspend any additional charges. They can even choose to pursue further action, such as taking you to court, if they wish.
However, many lenders will choose to act with leniency and may even suspend interest if they can see that you’re experiencing financial difficulty but still willing to try and make payments.
Can creditors contact you during a Debt Management Plan?
Certain types of debt management solutions, such as Individual Voluntary Arrangements (IVAs), prevent creditors from contacting you, but these rules don’t apply to a DMP.
In fact, there are several reasons why you might be contacted by your creditors while you’re in a DMP:
Annual Statements
Under the terms of the Consumer Credit Act 1974, your creditors should still send your annual statements, arrears, and default notices during your DMP.
Chasing notices
If you’ve only just started your DMP and not yet made a payment, you might still receive chasing notices from your creditors. You may also continue to receive notices from providers of your priority debts such as late mortgage payments or unpaid court fines.
DMP rejection
If one of your creditors chooses to reject the terms of your DMP, they can still take further debt recovery action against you and continue to contact you.
Mistakes
Creditors aren’t perfect; sometimes their records can be out-of-date, an email can be sent incorrectly, or a communication breakdown can mean that you’re contacted by mistake during your DMP.
However, during the DMP, creditors should not:
- Make payment demands that are intended to alarm, distress, or humiliate you
- Contact you too frequently, late at night, or over social media
- Pressure you to pay more each month than agreed in the DMP
- Ask you to sell property or take out more credit to repay your debts
- Use more than one debt collection (bailiff) company at one time
- Produce and send false or misleading documentation
Can a Debt Management Plan stop bailiffs?
Although a Debt Management Plan doesn’t guarantee you won’t receive a visit from the bailiffs, it can lead creditors to act more compassionately towards you.
Choosing to enter a DMP, treating your creditors fairly, and keeping up with your agreed reduced repayments, can reassure lenders that you are taking steps to pay your debts and that bailiff action isn’t required.
In fact, being proactive and working to set up a DMP as soon as you start to struggle with your debt repayments could stop bailiffs being appointed at all, especially if both parties have agreed a repayment plan before court action is taken and a County Court Judgement (CCJ) is issued.
Working with a debt management company could also help you avoid the bailiffs. Having an experienced debt professional act on your behalf, representing you in negotiations, could open the lines of communication and reduce the need for further debt recovery action.
What happens if the bailiff visits and I don’t have a Debt Management Plan?
If you’re not yet in a Debt Management Plan and you receive a letter from the bailiff, consider negotiating with them directly to set up a new payment plan. Getting in contact quickly can help you prevent any additional fees and enforcement action. In fact, having a bailiff visit comes with charges, so getting an agreement in place before they turn up on your doorstep could save you money. Use the contact details outlined on the letter to get in touch with them.
How can I prevent bailiffs coming to my home?
The most effective way to stop bailiffs visiting your home is to deal with your debts before further action is taken. There are many reasons why you might be struggling with your debts, whether you’ve unexpectedly been made redundant, have been hit by increases in the cost or living, or have to cover an emergency cost that’s beyond your budget, but taking proactive steps to get help could stop the bailiffs.
This doesn’t have to mean entering a Debt Management Plan. There are several informal and formal debt management solutions available. Consider working with an expert debt advisor that can take an impartial view of your situation, talk you through all the options, and find the way forward that’s best for you and your circ*mstances.
Looking to find impartial debt advice? Our team of experts is here to help. Give us a call on 0161 8260 585 or send a message here
