Catalogue Debt
Table of Contents
What Is Catalogue Debt?
Catalogues remain an extremely popular way of purchasing goods for many people, especially around those times of year when money can be short e.g. Christmas and Birthdays.
A catalogue company typically allows its customers to open a credit account and buy items such as clothing ‘on account’.
They often provide a credit agreement which gives you an option to:
‘buy now, pay later’
and/or
- to spread the cost of your purchases over a period of weeks.
These features can seem attractive, but with high interest rates and/or simply higher prices than competitors, it can be an expensive way to purchase goods or to borrow and can leave people with debts they don’t have the money to pay.
Some of the more typical catalogue companies include:
- Studio
- Freemans
- Very
- La Redoute
- Littlewoods
- JD Williams
- Fashion World
Can I Just Make Minimum Payments on my Catalogue Debt?
Some catalogue companies will sometimes only ask for a ‘minimum payment’ from you on a weekly or monthly basis. Paying this amount can seem tempting but they can often not completely cover the interest and repayments, so your debts will increase giving you more to pay in the long run.
For some catalogue companies, a minimum payment will pay off all of the interest for that month and a small portion of the arrears, however only paying this amount can lead to excessive repayment periods and huge amounts of overall interest.
If you take this option and only pay the minimum amount for a prolonged period of time then your account may be considered to be in ‘Persistent Debt’.
What Is Persistent Catalogue Debt?
Persistent Debt occurs when you have been paying minimum payments for a prolonged period of time and you have only been repaying interest and charges as opposed to the actual original balance of the account.
If or when this occurs, your creditor should contact you to help and encourage you to clear your debts so that that it is gone within 18 months.
What Happens If I Have Persistent Catalogue Debt?
If you have been identified as having Persistent Debt’, then you will often be contacted as follows:
If you have only made minimum repayments for 27 Months
You will be contacted again by your creditor, encouraging you to deal with the arrears.
If you have only made minimum repayments after 36 Months
If your persistent debt remains, then your creditor should offer you a method of paying the arrears within three to four years. This could be a payment plan agreement that is affordable or a loan or credit card which you would then pay off. If these options aren’t suitable to your circumstances, then your creditor may help you by considering ceasing any interest or charges on your account.
At this stage, your credit history will almost certainly have been negatively affected. It is essential that you reply to these attempts to contact you, so that you can remain in control of your finances.
What Happens If I Fall Behind with My Catalogue Debt Payments?
Failing to pay your debts can affect your credit rating in the same way as missing a loan repayment or credit card payment.
If you fall behind with your catalogue payments, in the first instance, your creditor will simply ask you to catch up with your arrears. If you are able to do this, then you will be allowed to continue making payments in the agreed way. If you are unable to pay, then the credit account will default. This will mean that your account is closed and you will be no longer able to make any purchases. This does not close the debts however.
Catalogue companies will often sell the debts to a Debt Collection Agency or they will take legal action to reclaim their lost money.
Catalogue debts are not like a Hire Purchase agreement. Your creditor will not attempt to repossess your purchased goods and you are not able to simply cancel the agreement and give the items back.
Can I Cancel My Catalogue Debt?
Under the Sales of Goods Act section ‘Online and Distance Selling’, all purchases made online or through a catalogue are subject to a 14-day cooling off period.
This means that should you decide you cannot afford the purchases and the forthcoming debts, then within this timeframe you could get your money back by simply sending them back ‘no questions asked’.
However, once this 14-day cooling off period has expired, the debts will most likely need to be paid.
Where Can I Get Catalogue Debt Advice?
If you are finding it difficult to pay catalogue debts or if you have other unsecured debts that are beginning to get out of control, then the following solutions may be right for you:
If you live in England, Wales Or Northern Ireland:
If you live in Scotland then the following may suit your needs:
Contact IVA4Me for help and advice. Working alongside an experienced Insolvency Practitioner, we can help you pay all or a portion of your debts to begin to get your life back on track.
Can I Have Catalogue Debts Written Off?
Since catalogue debts are unsecured, you could potentially apply for an IVA to write off your debt, so ‘yes’, you could have your catalogue debts written off.
To find out more visit our IVA information page. With an IVA, You could be eligible for help with your debt. You may be able to have up to 81% of your debt written off, leaving you with a much more manageable amount to pay.
Catalogue Debt FAQs
What happens if you don’t pay catalogue debts?
Failing to pay your debts can affect your credit rating in the same way as missing a loan repayment or credit card payment.
Can You Go To Court for Catalogue Debt?
If you fall behind on your catalogue repayments, or if you fail to make your minimum repayments, then your catalogue company may ask you to catch up. If you are unable to do this or if you fail to reply, then they have a few options that they could take.
Can Bailiffs Come For Catalogue Debt?
If you have catalogue debt and you have not been able to pay, then Bailiffs could come and collect the debt. However you will have plenty of warning before things get to this stage.