New 30-day Rule to Help Households Take Control of Their Finances

A new 30-day rule will give people breathing space to help them take control of their finances as well as encourage them to seek help from debt advisors.

Debt collectors have agreed with the Government to give 30 days’ breathing space to borrowers struggling to repay debts. This breathing space will allow borrowers in difficulty a break of 30 days – with a possible extension of another 30. It’s part of a new set of ‘fair principles’ agreed following a credit card summit hosted by the Department for Business in November 2008.

Extra breathing space

The 30-day rule agreed with the Credit Service Association Limited (CSA), which represents debt collection agencies, will start once an accredited debt advisor has been appointed. The CSA was established in 1902 and is the only National Association concerning unpaid credit accounts, debt recovery agencies, tracing and allied professional services for companies in the UK.

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 advisors.

“I welcome the CSA’s recognition that this is an important and sensible commitment to have made to borrowers.”

It means debt collection agencies will not contact debtors to pursue debts for 30 days once they have been informed that an accredited debt advisor has taken on the case. This limit will allow an accredited debt advisor to negotiate with creditors and the collection agency so a plan for repaying the debt can be agreed.

Extra advice

Additionally, CSA members will be required to inform borrowers of the availability of accredited advisory services. These advisors can recommend a course of action based on the debtors’ circumstances. This action could be a monthly payment to creditors or liquidation if necessary.

In summary

The new 30-day rule will allow debtors almost a month’s breathing space to seek advice to overcome their debts. Once creditors and debt collection agencies are informed the debtor is seeking advice, they won’t be able to pursue that creditor for 30 days. There is even a possibility to extend this period for another 30 days. Members of the CSA will also inform indebted borrowers of accredited advisors to contact.

If you’re struggling with debt and are looking for a way out, contact us today. We offer free impartial advice with no obligation and can provide you with a solution best-suited to your circumstances.