How long does catalogue debt last?
In this article, we'll look at:
- How long do you have to pay off catalogue debt?
- What happens if you stop paying?
- When can catalogue debt be passed to debt collectors?
- How long can you be chased for catalogue debt?
- How long does catalogue debt stay on your credit report?
- Can a debt management plan help me pay off catalogue debt?
- Explore your options with DFH Financial Solutions
‘Buy now, pay later’ catalogues, like Littlewoods, Argos and Very, can make online shopping a breeze. Rather than having to pay upfront, you can spread the cost of your purchases over time. But while it offers unparalleled convenience, this form of consumer credit also poses the risk of debt accumulation. If you don’t repay what you owe quickly, it’s all too easy for interest to build up and balances to spiral out of control.
If you’ve fallen behind on repayments or can’t make headway on reducing your balance, you may be wondering – how long does catalogue debt last? Will I be chased for payment for the rest of my life, or will it eventually go away? Read on to find out.
How long do you have to pay off catalogue debt?
When you open a catalogue account, you will agree to a set credit limit and minimum monthly repayment amount. As long as you make at least the minimum payment each month, you can continue using your account indefinitely.
There is no fixed end date for paying off your full catalogue debt. The repayment term is open-ended as long as you meet the minimum payments.
Of course, only making minimum repayments means it will take much longer to clear your balance, and interest will continue accumulating. You may find that you’re paying more towards interest and charges than towards the principal. This is called being in ‘persistent debt’.
To pay off your catalogue debt in the shortest time, you should aim to pay more than the minimum amount each month. Alternatively, you could make lump sum payments whenever you have spare cash available to bring down your balance faster.
What happens if you stop paying?
If you miss catalogue payments, or you’re paying less than the minimum each month, your account will go into arrears. The implications may include:
Your missed payments being reported to credit reference agencies, negatively impacting your credit score.
Late fees and charges being applied.
Your catalogue account being closed, so you can no longer shop with that company.
Interest continuing to accumulate, so that the debt grows larger over time.
Your debt being passed to collection agencies who will pursue you for repayment.
Potential legal action like CCJs and charging orders.
Catalogue debt is not secured against the items purchased, so you won’t have to return what you bought. However, usually between 3 to 6 months of missed payments, your creditors can issue a default notice and start more aggressive debt collection proceedings.
Avoid missed payments where possible, as defaults also damage your credit score. This can make it harder for you to access things like loans and mortgages in future.
When can catalogue debt be passed to debt collectors?
Once your account is in arrears, the catalogue company may assign your debt to an external collection agency. They can do this at any time, even if you’ve only missed one payment. However, most creditors will try to contact you to discuss repayment.
The aim of a debt collector is to recover the outstanding money through letters, calls and visits. Debt collectors are allowed to come to your home, but they must follow Financial Conduct Authority rules. For example, they cannot:
Visit you without giving you notice.
Enter your home without your permission.
Trespass on your property – if you ask them to leave, they must do so.
Harass, threaten, abuse, mislead or trick you.
Speak to other people about your debt without your consent.
If your catalogue debt has been passed to a debt collector, it’s best to contact them and explain your situation to avoid a visit. They should be willing to work with you to come up with an affordable repayment plan.
How long can you be chased for catalogue debt?
In England, Wales and Northern Ireland, most unsecured debts (including catalogue debts) have a limitation period of 6 years. This means that the creditor has a time limit of 6 years in which to start legal proceedings to recover the debt.
The 6-year period begins from the earliest date they could take legal action, the date of your last payment, or the date you last acknowledged the debt in writing – whichever happened most recently.
Once the limitation period ends, your catalogue debt becomes ‘statute barred’, meaning your creditors can no longer take you to court to recover the money.
However, statute barred debt does not disappear completely. The original creditor can still contact you to request payment – they just lose the option of legal enforcement.
How long does catalogue debt stay on your credit report?
Details of any missed payments, late payments or defaults on catalogue accounts will typically show on your credit file for 6 years from the date you first missed payments. This can negatively impact your ability to access credit.
If you repay your catalogue debts in full and remain up to date with payments, the account itself will show up to 6 years of financial history until it is settled and closed.
Can a debt management plan help me pay off catalogue debt?
If you’re struggling with multiple debts, including catalogue balances, credit cards and loans, a debt management plan (DMP) could help you avoid defaulting and minimise the risk of legal action.
A DMP provider can work with you and your creditors to create an affordable repayment plan that works for all parties and may be able to negotiate reduced interest rates. You’ll make one monthly payment to the DMP provider, allowing you to repay your debts in full over an extended period.
DMPs are not legally binding, and you could end up paying more in total interest. Seeking professional debt help is advisable to assess if a DMP could benefit you.
Explore your options with DFH Financial Solutions
If you need guidance managing catalogue debts and other unsecured borrowing, the team at DFH Financial Solutions can help.
Our experts have years of experience in providing tailored debt advice to people across the UK who are struggling to juggle multiple repayments. We can advise you on the best debt solution for your unique situation and match you with personalised debt management plans suited to your needs.
To find out if a DMP could help you on your journey to financial freedom, apply online with DFH today.Get Debt Help