Debtors in the UK should be aware that lenders may try to recover money by repossessing property and belongings, Credit Action has warned.
In other countries, those unable to clear debt from loans or credit cards may face prison, but in the UK people are more likely to face the streets, the charity’s director Chris Tapp has said.
“If you’re talking about mortgages and any sort of secured debt, the lender can force you to sell the property or they might repossess the property, so people could actually end up homeless,” he said.
Bailiffs and county court judgements may be used against people unable to pay off unsecured loans, Mr Tapp said, while utility companies will switch off supply if bills are unpaid.
Those with problems may wish to consult a professional about potential solutions such as IVAs and debt consolidation.
The charity’s statistics show the UK’s total personal debt stood at £1,443 billion in May. Per household, this equates to £57,941 including a mortgage.
By Morwenna Kearns