As recession continues to grip Great Britain, more people are turning to finance companies to pay for items that they could not otherwise afford. The personal debt of Britons now tops £1.4 trillion, and as living costs rise and wages stay stagnant, many people are unable to make the payments needed for their items bought on credit. However, not everyone is willing to either pay for the item or return it to the creditor; this is when the bailiffs are sent in.
When individuals default on their payments, creditors can begin proceedings against the debtor to recover what is owed. This can begin with chasing for payment and sending final notice reminders to the debtor, which can then progress to bailiff action. When bailiffs are issued, they will visit the debtor at home to repossess the item that hasn’t been paid for, or seize items which will cover the amount of debt owed.
Photo courtesy of Oran Viriyincy on Flickr
With more people relying on finance companies to fund their lifestyle but fail to make the necessary repayments, repossessions can be common. Channel 4 have recognised this and are currently airing a documentary series named “The Repo Man” which follows repo man Sean James and his business Donegal Investigations during their assignments, to give an insider’s perspective on what it is really like when dealing with bailiffs.
The Repo Men
The programme explores the daily responsibilities of the repo man, and having worked in the industry for 15 years, Sean James knows the business better than anyone else. Cars are commonly used in credit agreements – it is estimated that 1 million cars were bought via a finance arrangement in 2012, and that 30,000 logbook loans are taken out each year, where a car is used as collateral for a cash loan. For those that do not make the necessary repayments on their vehicles, Donegal Investigations step in to repossess it at the request of the finance company; these repo men claim to have collected over 60,000 cars since they started the business.
With the potential to earn up to £200 per job, repossession is a lucrative business for Sean. In order to make as many repossessions and therefore as much money as possible during one day, Sean plans each assignment with careful precision; he was at one point seen to leave his home at 1am in order to catch a debtor unexpectedly in the early hours.
Time can often be wasted by debtors either blocking access for the repo men or by physically putting up a fight. Sean is often seen getting into physical altercations, and even his son understands that this is all part of the job, as when asked what he believes his Dad’s job entails, he replies “violence”.
However this may be all about to change for Sean and Donegal Investigations, as a new bill introduced by the Ministry of Justice has outlined changes to the bailiff industry that will take effect from 2014.
Changes to the repo industry
New safeguards have been proposed to regulate certain practices that bailiffs enforce, to ensure that vulnerable individuals who may not know how to deal with bailiffs are protected. These are changes will be made via amendments to the Tribunals, Courts and Enforcement Act 2007, which should be implemented from next year.
This new legislation will mean that repo men will no longer be able to enter a debtor’s property or perform repossessions within the hours of 9pm-6am, and will be banned from using physical force. Bailiffs must also undergo mandatory training to gain necessary certification; those who don’t will be barred from the industry.
This will mean a huge change for Sean James, as Donegal Investigations employ boxers and ex-marines for henchmen, and are often seen at the properties of debtors in the early hours and late at night. Sean admits in the programme that business is becoming increasingly difficult due to escalating competition, and these new rules could potentially throw another spanner in the works for the repo men who have so far reaped success from the recession.
Dealing with bailiffs
People may be unaware of how to correctly deal with bailiffs, and The Repo Man highlights how some people do, or do not, handle a repossession. However, there are already rules in place at the moment before the new legislation is actioned that provide debtors with a certain level of protection.
For example, debtors are not legally obligated to answer the door to a bailiff, and do not have to allow them inside their home. However, if bailiffs are ignored, they will return and may charge additional fees for each visit.
Paying the owed amount can also stop bailiff action there and then – the creditor should be able to explain directly to the debtor how to make a payment, and therefore halting a repossession.
However, the best way to avoid dealing with repo men such as Sean James is of course to stay out of debt and carefully manage repayments. For those facing debt issues, it is important to seek professional financial advice to seek a solution to their problems. There could be a range of different routes available that don’t include bringing in the bailiffs.
Amy Fry is a former financial adviser who writes about different topics including personal finances, debt management and IVAs.