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.
Debt collectors have agreed with Government to give 30 days’ breathing space to borrowers struggling to repay debts.
The new 30-day rule, agreed with the Credit Service Association (CSA), which represents debt collection agencies, will start once an accredited debt advisor has been appointed. The Credit Services Association (CSA) Limited was established in 1902 and is the only National Association in the UK for companies active in relation to unpaid credit accounts; debt recovery agencies, tracing and allied professional services.
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 will allow an accredited debt advisor to negotiate with creditors and the collection agency so that a plan for repaying the debt can be agreed.
In addition CSA members will be required to inform borrowers of the availability of accredited advisory services.
A break of 30 days – with a possible extension of another 30 days – to borrowers in difficulty was part of a new set of ‘fair principles’ agreed following a credit card summit hosted by the Department for Business in November.