Is catalogue debt enforceable?
In this article, we'll look at:
If you’ve ever ordered household items or clothing on credit from “buy now, pay later” catalogues, you may be familiar with catalogue debt. While catalogue credit offers convenience, it can quickly become overwhelming if repayments aren’t managed properly.
But is catalogue debt enforceable? Usually, yes – like other forms of consumer credit, you can legally be held liable if you don’t make repayments. Read on to learn what shopping catalogue debt is, when it is and isn’t enforceable, and what action creditors can legally take if you default. We’ll also provide tips on getting catalogue debt under control, including how a Debt Management Plan (DMP) could help.
What is catalogue debt?
Catalogue debt refers to money owed to companies that allow you to order items from their catalogues and pay for them in instalments. This type of credit agreement is a way to spread the cost of purchases over a period, often 12 months.
Some examples of popular shopping catalogue retailers include:
Catalogue credit is a type of unsecured debt. This means the creditor does not take any assets as collateral when approving you for credit, making it a non-priority debt. Priority debts, on the other hand, are debts that could have severe or immediate consequences for defaulting (such as losing your home or going to prison).
When is catalogue debt enforceable?
Like credit card debt, catalogue debt is legally enforceable if you’re liable for it. This means you entered into the credit agreement and are responsible for making the repayments.
However, there are certain situations where catalogue debt becomes unenforceable:
- If the debt is statute-barred - In England and Wales, creditors can't take legal action to recover it. For most debts the time creditors have to take legal action is 6 years from the point at which they could enforce the debt in Court. In Scotland, the debt becomes prescribed, which means it no longer exists after 5 years. Once catalogue debt passes the statute-barred date, it becomes unenforceable.
- If the debt is not yours - If you never entered into the credit agreement or did not authorise it, you are not liable for the debt. This makes it unenforceable.
- If the creditor cannot prove the debt - The creditor must provide written proof that you owe the specific amount claimed. If they cannot substantiate the debt, it becomes unenforceable.
Unless your catalogue debt is unenforceable for one of the above reasons, creditors can pursue you legally for repayment.
What happens if you don't repay catalogue debt?
For enforceable catalogue debt, failure to keep up with repayments can lead to serious consequences that may damage your financial situation.
If you fall behind on payments, your account will go into arrears, meaning you owe more than your scheduled repayments. Any reported missed or late payments will negatively impact your credit file. You may also incur additional fees and higher interest rates charged to your account for late payments, which can rapidly increase the total debt owed.
If your account goes into default, your creditors may sell your catalogue debt to third party collection agencies, who may contact you to repay it. For substantial amounts of debt, creditors or collection agencies may choose to take legal action against you.
What legal action can creditors take for catalogue debt?
Your creditors have several legal options to recover catalogue debt:
- Letters before action - The creditor will send an escalating series of letters requesting payment before they take legal action.
- Court claim - The creditor can issue a claim through the County Court Money Claims Centre. This begins legal proceedings.
- CCJ - If you don't respond to the claim, the court can order a CCJ against you by default. This means the creditor can enforce repayment.
- Attachment of earnings - Creditors can have repayments deducted directly from your wages.
- Charging orders - If you own property, creditors can obtain a charging order to recover debts from the sale proceeds when the property is sold.
- Bailiffs - For unpaid CCJs, creditors can instruct bailiffs to seize and sell your possessions.
- Bankruptcy - Failure to repay substantial catalogue debts could potentially result in you being made bankrupt.
It is critical to take steps to avoid falling behind on catalogue debt and communicate openly with creditors if you are struggling to make payments.
Tips for managing catalogue debt
If you’re struggling with repayments, here are some tips to take control of your catalogue debt:
- Review your finances and make a budget to see where cutbacks can be made to free up cash for repayments.
- Prioritise paying priority debts like mortgage, rent and council tax first.
- Contact your creditors to explain the situation and request to pause or lower payments until you get back on track.
- Avoid taking out new credit agreements until debts are repaid.
- If applicable, consider transferring your catalogue debt to a 0% balance transfer credit card to prevent interest accumulating while you make repayments. Just be aware that interest may rise sharply again after the introductory period ends.
If you’re struggling to juggle multiple catalogue debts, credit card balances and other debts, it may be worth looking into debt consolidation or a debt management plan (DMP). These come with their own pros and cons, so seek professional debt advice if you’re unsure of the best path forward.
How can debt management plans help?
If you have multiple catalogue and other non-priority debts, a debt management plan (DMP) could help. This is an informal agreement between you, your creditors and a plan provider that aims to secure lower monthly payments and freeze or reduce interest and fees.
On a DMP, you’ll send one consolidated payment each month to your DMP provider, who splits it between your creditors. DMPs can provide a structured approach to help individuals take control of their debts without resorting to formal insolvency solutions or consolidation loans.
However, there are some potential downsides. For instance, they can only be used for non-priority debts, and as it is not legally binding your creditors may not agree to the plan. It’s vital to weigh the pros and cons and assess whether a DMP is right for your unique situation.
Contact DFH Financial Solutions Today
Catalogue debt can creep up on you, but you don’t need to handle it alone. If juggling multiple catalogue debts, credit card debts, and loans is proving impossible, DFH Financial Solutions may be able to help.
Our experts have extensive experience in helping people take control of their finances. We can offer personalised debt advice to help determine the right debt solution for you and match you with a tailored debt management plan that is suited to your circumstances.
Apply online today to find out how we may be able to help you on your financial journey.Apply Now