New debtor rules come into effect

07/04/2009

Two separate measures aimed at helping debtors were introduced this week.

People struggling with debts stand to benefit from a new "breathing space" rule that is the result of a deal between the government and debt collection industry body the Credit Service Association (CSA).

Under the new regulations, the collectors are required to not contact the debtor for 30 days after he or she appoints a debt adviser, which can be from a group such as Citizens Advice, to help them with their finances.

Debt collectors are also obliged to inform debtors of the existence of such advice groups.

Consumer minister Gareth Thomas commented: "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."

Also introduced this week are new debt relief orders - aimed at helping people with small debts who are on low incomes.

Under the new orders, this group - who generally cannot afford bankruptcy proceedings - are now empowered to write off their own debts.

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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