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  • 06 Consumers, Money, and Debts
  • Debt
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This chapter explains what a debt is, how a person can enter debt and what can be done once debt has been entered. The chapter also outlining the process of what happens when a person defaults (doesn’t pay the money or other item back at the agreed time), what happens if it proceeds to court and how much a person may be liable to pay as well as the role of debt collectors.

What is Debt? How do you get it? What can be done?

A debt is created when one person owes money to another. The person who owes money is called a debtor; the person to whom money is owed is called a creditor. There are many ways of getting into debt. For example: Borrowing money to buy goods or services; Buying goods and services on cr...

The Letter of Demand

Debtors who have fallen behind in payments will generally receive one or more letters or notices from the creditor and/or from a debt collection agency demanding payment. These letters of demand will usually state that unless the debtor pays by a certain date, court action will be taken. Do...

Imprisonment over Debts

If a creditor gets judgment against a debtor, the amount which the court ordered the debtor to pay, the ‘judgment debt’, is payable to the creditor immediately. Where the debtor cannot or does not pay the amount to the creditor straight away the creditor can use the court processes described i...

Page last updated 18/08/2020

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