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If you fail to keep up monthly repayments on credit then you will be in Arrears. If you are in Arrears for over 3 months then you will be classed as having defaulted on your credit agreement. It is virtually impossible that we will get through life never having had credit whether it be a mortgage, loan, credit card, store card or any other finance.
The biggest amount we will ever borrow is a mortgage to buy a property, but it doesn't matter how much you borrow you can get in arrears or default with any credit repayments.
If you don't make the agreed regular monthly payment by the stated date then you will be in arrears. If you make the payments on time you will have no problem with your creditors. Should you miss a payment sometimes you might get a polite letter informing you that you missed a payment and requesting you make the payment within the next seven days.
If after several missed payments you still haven't made any payment at all then you will become further in arrears. By this time you may be threatened with court action and only by repaying some or all of the monthly repayments will you be able to stop this.
If you fail to make any repayments after 3 months then you are classed as defaulting on the credit agreement and court action may be taken.
This could lead to a CCJ (County Court Judgement) or if its a mortgage or secured loan then your home could be reposessed and sold in order to recoup the debt.
Before it gets to this stage you have a number of options such as seeking independent advice, consolidating your debts to reduce the amount you have to make in repayments or tried to come to some kind of agreement with your creditors. |
