Debtors Get Breathing Space To Seek Advice

Mon, 06 Apr 2009

Borrowers struggling with repayments are to be given 30 days breathing space from debt collectors under a new deal between the Government and the Credit Service Association (CSA).

The ruling means collectors will have to wait 30 days before chasing people once an approved debt adviser has taken over their case.

The new code of conduct is designed to allow debtors time to seek debt advice from charities such as the Citizens Advice or the Consumer Credit Counselling Service (CCCS).

A spokesman for the CSA, which represents debt agencies, said the rule is being written into the association’s code of practice and can also be extended for an extra 30 days.

Commenting on the move, Consumer Minister Gareth Thomas said: "This new 30-day rule will give people a breathing space to help them take control of their finances as well as encourage them to seek help from debt advisers ."

"I welcome the CSA's recognition that this is an important and sensible commitment to have made to borrowers."

Kurt Obermaier, executive director of the CSA, added: "We have an agreement to allow a 30-day breathing space in the hope and expectation that this will ease the pressure on the debtor and more likely result in a positive outcome for all."

Debt collection agencies work on behalf of a range of creditors, including banks, utilities companies and the government, and chase debts ranging from credit card balances to council tax .
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