Debt collectors will contact you after missing more than 2 payments and you did not make any arrangement with creditor to repay arrears. Some debt collectors will be very aggressive to collect arrears or car. It is important to remain calm and know your rights.
Speak to the debt collector and ask him how you can help him. If he demands your car, you must ask if he has a judgement handed down by Magistrate Court. If he says he does, you must ask him if he is registered with the council of debt collectors. When he collects the car he must produce the judgement and certificate of registration at Council of Debt Collectors.
Debt collectors normally get 10% of the debt collected from customers. So if the collector does not return with funds from customers, he does not get paid. So you can understand why debt collectors will be very convincing why you should hand over your car. Many customers don’t know their rights and think they must hand over their car to debt collector.
The only way to stop repossession is to pay the arrears on your car or apply for debt counselling before you get a court judgement against you. Paying the arrears will stop repossession process immediately. If you decide to apply for debt counselling to protect yourself against your creditor, it will take 2-5 working days depending how fast you can complete your application with supporting documents, which, if you are used to filling out applications on anything from http://www.aviva.co.uk to the form for a job application, should come naturally and quickly.
What is Debt Counselling?
Debt counselling came into effect in June 2007 with the introduction of the National Credit Act or NCA. Debt counselling is there to protect the over indebted customer from his creditors. A customer applying for debt counselling is protected from repossession of his assets.
The debt counsellor will negotiate on your behalf with all your creditors a lower monthly instalment on debt. The debt counsellor will look at the customer’s level of debt and negotiate with creditor accordingly.
One of the biggest advantages of debt counselling is that it is voluntary. The customer decides when to apply and when to leave debt counselling. So the customer can leave debt counselling as soon as his situation improves, like income increases or level of debt improves.
By applying for debt counselling the customer is protected from car repossession, but also has the opportunity to improve over indebtedness. The customer can sell his car while in debt counselling to improve his level of debt. This is much better than voluntary repossession, because the customer will be able to sell his car at a much higher price than auction of creditor.
Applying for debt counselling is a better financial move than voluntary surrender of car to creditor. But it is very important to act before the issue of a summons by creditor’s attorneys
Click here for more information on debt counselling.
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