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Contract debt. What happens if you don't pay your bill

When you sign up for services like a gym, mobile phone or TV package, you’ll usually enter into a contract for minimum period. If you fall behind with payments, or cancel the service early, you’ll usually have to pay the remainder of the contract.

If you stop paying your contract, your account will go into arrears and you’ll lose access to the service. If you don’t take steps to deal with the arrears your account will default and the debt will be dealt with following the normal collections process for unsecured debts.

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What can I do if I can’t afford my contract?

If you’re struggling to pay your contract or if you have arrears you should contact the service provider as soon as possible and talk through your options. You may be able to arrange a payment plan to pay off what you owe. Your provider might also be able to reduce the payment or spread any arrears over the remainder of you contract.

In some cases you may be able to cancel your contract without paying a fee, but this depends on the terms of the contract. If you cancel it, there may be a notice period, or they may charge a cancellation fee.

If you can’t cancel your contract, you’re worried that you won’t be able to afford it or you have arrears you’re struggling to repay, you should get expert advice on dealing with your situation.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2019