Common debt myths we hear from clients every day

"If I miss payments on my debts, I’ll be ‘blacklisted’"

The ‘blacklist’ is a myth that’s been around for a long time. It suggests that once you miss payments on your debts, you’ll be banned from taking out credit in the future.

Whenever you apply for credit, lenders will check your credit file to decide whether or not they should approve your application.

If you default on your payments this’ll be recorded on your credit file. However, any payments you do make towards your debt will also be recorded. There’ll also be a note added whenever you pay off a debt completely.

"I could be sent to prison for my debts"

Many people worry that they could be sent for prison for not paying their debts. While this was a real risk in past, there’s absolutely no need to worry about prison for almost all debts nowadays.

A prison sentence could technically be enforced for non-payment of the following debts, but this is extremely rare:

• Criminal fines
• Council tax (only in England)
• Business rates
• Child maintenance arrears owed to the CSA or CMS

Even with these types of debt, prison is a last resort that’s normally only considered if you’ve ignored the debt or refused to pay.

There are no other debts you could be sent to prison for not paying. However, it’s important that you get help with any debts you’re struggling with as soon as possible.

"If I get married, I’ll take on my partner’s debt"

If you get married, you won’t be responsible for any debts or financial obligations that your partner had beforehand. You’re also not liable for any debts or credit products they take out in their own name after you’re married.

If you take out a joint loan or a mortgage or open up a bank account together, you’ll both be liable for these debts. This is called 'joint and several liability’. If you live in England or Wales, you’re also jointly liable for any council tax debt that’s owed on the property, regardless of which person pays the bill.

Another exception is water rates. Any other adult in the property can be held liable for the water usage during the period they lived there, even if they're not named on the bill.

"When I die, my family will have to pay off any debts I owe"

If a person dies and leaves behind unsecured debts that are in their name only, the unpaid balance will be settled with any money available in their estate. This is made up of items such as a house, savings and investments.

A deceased person's personal representative might be held liable for their debts is they don't administer the estate properly.

Most unsecured creditors will normally only pursue a deceased person’s debt if they left behind a large estate, such as a house owned outright with lots of equity.

If the person had no assets at the time of death, any debts they owed in their name only will be written off.

If they leave behind a joint debt that needs to be paid, the surviving person will be liable for the full balance.

"If the person who previously lived at my address was in debt, it’ll affect me too"

This used to be a concern for many people. However, credit files are now based on the individual, not the address.

When a creditor asks for your address, they do this to verify who you are and how long you’ve been living at your current property.

The only way you can be linked to another person financially is if you take out joint debt with them. For peace of mind, you can always check your credit file with the three credit reference agencies. If you do see anything on there that doesn’t seem right, you can query it with the agency.

"If I leave the UK, my debts will eventually go away"

Avoiding debt by moving to another country would make it harder for a UK-based creditor to find you, but it wouldn’t guarantee they’d stop chasing you. What’s more, there are a growing number of organisations that will chase consumer debt internationally.

Depending on where you move to, creditors may have a branch of their company in that country. They would be able to pursue the debt on the UK branch’s behalf.

Creditors can also take court action against you in your absence. This means that the debt will still need to be dealt with should you ever return to the UK.

There are steps you can take to deal with your debts from abroad.

"Creditors can send bailiffs to my house to collect payments"

Only the courts have authority to instruct bailiffs (also known as enforcement agents and sheriff officers if you’re based in Scotland) to visit your property.

Creditors may send collection agents, but they have no powers to force entry into your home and seize goods. Bailiffs can only enter your property if you’ve allowed them in on a previous visit and you’ve signed a ‘controlled goods agreement’.

If you’re dealing with any kind of court debt, please get free and confidential debt advice as soon as possible.

"Bailiffs can take anything they want from my house"

There are strict rules which dictate what bailiffs can and can’t take from your home. They prefer goods that will sell for a good price at public auction, so their main targets will be:

• Vehicles
• Electronic goods, such as TVs and computers
• Jewellery
• Furniture

They must leave you with basic items, such as

• A washing machine, fridge and cooking appliance
• A landline or mobile phone
• Enough bedding for everyone in the house
• A dining table and enough chairs for everyone in the house
• Heating appliances
• Lighting appliances
• Medical or care equipment

Some goods are protected from being collected by bailiffs. These are:

• Goods that belong solely to someone else, although they can take goods that you jointly own with that person, and the other person might need to produce a receipt to prove ownership
• Pets and assistance dogs
• Tools and equipment that you need for your job or study, up to a value of £1,350
• Fixtures in your property, such as fitted wardrobes or fitted kitchen units

Can you help me with my debts?

If you're worried about debts, please get in touch with us. We can give you the free and confidential debt advice you may need. Our online advice tool can help you put together a personal action plan, at any time of day you prefer. Alternatively, you can speak to one of our advisors over the telephone.