Try to guess the blanks in the following paragraphs which summarise the debt collection process. Click on a blank to find out what it is. This will test your understanding of what you have learned:

If I do not meet my contractual monthly payments to my creditors they may decide to issue me with a default notice. This is a legal requirement which formally notifies me that I am in arrears with my credit agreement. I can still negotiate an agreement with the creditors directly and if I continue to make regular monthly payments it is unlikely they will take further action.

However if I do not maintain payments the Creditor may decide to put my account with a debt collection agency.  They may send agents to my door or contact me by phone.  It is important to remain firm in my dealings with these people and not allow myself to be pressured into paying more than I can afford.  If payments are not made regularly or are still not accepted by the creditors they may put my account into the hands of Solicitors who could start court action.  The County Court will send out documents which I need to complete and return promptly.

If a hearing is set it is important that I attend to present my case.  The Judge may issue a County Court Judgement which sets out the terms on which I must make payments.  If I still do not keep up my payments this could result in my being issued with

• Warrant of execution which means bailiffs could be sent to my home to remove goods to the value of my debt.
• An Attachment of Earnings Order which means that the court can order my employer to make deductions from my salary to clear my debt.
• A Charging Order which secures the debt against my property meaning I would not be able to sell my home without clearing the debt.

All these actions will be recorded on my credit file held by the credit reference agencies. The information will remain on the files for 6 years and could mean I will find it difficult to obtain credit in the future.