Featured in...
Dashboard
Debt Info
Debt Collectors

Debit Finance – Should You Pay? 

Scott Nelson Profile Picture Janine Marsh Profile Picture
By
Scott
Scott Nelson Profile Picture

Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
&
Janine
Janine Marsh Profile Picture

Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Feb 7th, 2024
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

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.

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.

Featured in...
debit finance

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.

Have you received an unexpected letter from Debit Finance? Don’t worry; you’re not alone. Every month, over 170,000 people visit our site for help on debt matters. 

In this article, we’ll help you understand:

  •  If the debt belongs to you and if you should pay it.
  •  What happens if you don’t pay Debit Finance.
  •  How to deal with Debit Finance and set up a payment schedule.
  •  If you can write off some of your Debit Finance debt.
  •  How to handle Debit Finance appearing on your bank statement.

We know the worry and confusion that can come with a surprise debt letter. Our team has dealt with situations like this. 

Let’s take this journey together to find the best solution for you.

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.

How much debt do you have?

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.

How Do I Deal with Debit Finance?

Had a letter or call from Debit Finance and don’t know what to do? Follow these quick tips and effective strategies to deal with debt collectors to stay in control of the situation.

1. First, check that you actually have a debt

Debit Finance must be able to prove that you owe the debt. If they can’t prove that you are liable, you are under no obligation to pay.

You can use my free ‘prove it’ letter template to write to them.

2. You need to work out a payment schedule

If Debit Fincnace can prove that you are liable for the debt, you will need to start paying! DFC have to offer you a few different payment schedules for you to follow.

If you still can’t afford to pay with one of these schedules, you may need to consider a debt solution. I go through these below.

3. Check for statute-barred debts

If the debt that Debit Finance are chasing is quite old, you may want to check its statute-barred status before paying.

If it has been 6 years – or 5 years in Scotland – since you last paid towards your unsecured debts and you have not written to your creditor about your debt during this time, it is statute-barred.

This means that the debt is not enforceable. It still technically exists, and you still technically owe the money, but there is no legal way for you to be forced to pay or for the debt to be enforced.

Keep in mind that not all debts become statute-barred!

Any HMRC debts, for example, will stay enforceable for decades. Any debt that had a County Court Judgement (CCJ) attached to it during the 5 or 6-year window it will be enforceable for the duration of the CCJ. 

If your debt is statute-barred, you can use my free letter template to write to Debit Finance and explain the situation.

If you are unsure about the status of your debt, you can contact a debt charity for some advice. Their advisors will be able to look at the debt in question, determine its status, and advise you on your next steps.

I don’t recommend writing about your debt if you are unsure of its statute-barred status because this could restart the timer and make it enforceable for another 5 or 6 years.

» TAKE ACTION NOW: Fill out the short debt form

What Happens if You Don’t Pay DFC?

This section doesn’t only relate to Debit Finance, but to all debt collectors.

If you don’t get in touch with DFC and arrange to settle your debt, there are a number of actions that the firm might take. These will tend to escalate in severity – the consequences of ignoring debt collectors in the UK can be severe. Some examples are listed below.

  • You may be sent letters to any address you are known to have lived at recently.
  • Debit Finance will try to call you on any phone number that they think they might be able to contact you on.
  • You could find that you receive a home visit from an agent working for Debit Finance.
  • Additional penalties and charges could be added to your debt, based on the small print of the original credit agreement.
  • In some cases, Debit Finance could be able to lay claim (under the right to offset) to money in your bank.
  • You may find that a default is entered on your credit history. This will impact your credit score.
  • Debit Finance may begin legal action against you, which may ultimately result in a County Court Judgment (CCJ). This will have an even worse impact on your credit score than a default. It will stay on your credit file for 6 years.
  • For a debt of £5000 and over, Debit Finance could seek to have you issued with a statutory demand. You would need to engage a lawyer to help you with this, as this is often the precursor to a debt collection agency seeking to have you declared bankrupt.

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get Started

Will a Debt Collector Come to My House and Threaten Me?

There is no simple yes or no answer here. Much will depend on how much the debt is and whether Debit Finance believes that the expense of a personal visit will result in the debt being settled.

In general, for smaller debts, you will find that letters and phone calls are the norm. But for larger debts, you could end up with a debt collector knocking on your door demanding payment.

Fortunately, debt collection home visits in the UK are quite rare. If you are visited at home, and you find this behaviour inappropriate or unsettling, you may be able to make a complaint.

Can I Get a Debt Solution?

If you have Debit Finance debts or other unsecured debts that you are struggling to pay, you may benefit from a debt solution.

There are different available debt solutions in the UK available in the UK, so I recommend speaking to a debt charity for some advice before you begin. They will be able to take a detailed look at your finances and help you work out which debt solution will work best for you.

They will also be able to walk you through the processes for each debt solution, as well as their consequences and the impact that they may have on the rest of your life.

I have linked some charities at the bottom of this page that offer these types of services for free.

Debt Management Plan (DMP)

A DMP is an informal debt solution that lets you pay off your debts via a single monthly payment.

Because it is informal, it is not legally binding so you are not tied into a DMP for a minimum number of payments.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors. You agree to pay a monthly sum that is distributed amongst your debts, and your creditors agree not to contact you during your IVA.

IVAs typically last for 5 or 6 years, and any outstanding debt is wiped off when it ends.

Keep in mind that IVAs are not suitable for everyone. You need to owe several thousand pounds to more than one creditor to be eligible. You also need to demonstrate that you have some disposable income every month.

Trust Deed

IVAs are not available in Scotland. Instead, you will need to opt for a Trust Deed.

Trust Deeds work in the same way as an IVA – you pay an agreed sum each month that is shared amongst your creditors, they can’t contact you, and any leftover debt at the end of your Trust Deed term is written off.

Debt Relief Order (DRO)

A DRO is a good option for those facing financial hardship with no assets and little income.

For 12 months, you make no payments, but your creditors freeze your interest and don’t contact you.

If your finances haven’t improved during this year, you may be able to write off your unsecured debts.

Bankruptcy

If you have debts but no realistic possibility of ever paying them off, you may need to declare bankruptcy.

Bankruptcy has an unfair stigma attached to it as it may be your only way of getting a financial fresh start. That said, it is a serious financial situation that should not be taken lightly.

Sequestration

Sequestration is the Scottish version of bankruptcy.If you have little income and no valuable assets, you may be able to apply for a minimal asset process bankruptcy (MAP). A MAP is a quicker, cheaper, and more straightforward version of sequestration, so worth considering.

Thousands have already tackled their debt

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.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

Reviews shown are for The Debt Advice Service.

Can I Complain About Debit Finance?

If you think that Debit Finance has been unreasonable or behaved inappropriately, you can make a complaint. You can also make a complaint if you feel that they have broken any of the Financial Conduct Authority’s (FCA) guidelines.

Make your first complaint to Debit Finance so that they have the chance to sort out the issue themselves. If you feel that they have not taken your complaint seriously enough or have not addressed your issue properly, you can escalate matters.

You can make any secondary complaint to the Financial Ombudsman Service (FOS). They will investigate and, if your complaint is upheld, Debit Finance may be fined. You could even be owed compensation.

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

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.

The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.
×
Beat Debit Finance Debt Collectors
Beat Debit Finance Debt Collectors
  • Affordable repayments
  • Reduce pressure from people you owe
  • Lower monthly repayments
Close