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At a glance: Find out how you can deal with persistent debt.
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This summary is not relevant in England and Wales
For a version of this summary that covers England and Wales, please click here.

What is persistent debt?

Persistent debt applies to credit cards, store cards and catalogues. It means that in the last 18 months you have paid more in interest, fees and charges than payments toward your debt. So even though you have been able to keep your payments up to date, you’ll see that what you owe doesn’t get smaller and might even be getting bigger. 

Being in persistent debt doesn’t mean that you have done anything wrong.  

Why have I got into persistent debt?

If you are paying small amounts back, most of the money may go towards interest and charges, rather than repaying the debt. If this happens, it can take a long time to repay the debt. In some cases, you could end up paying back a lot more than you originally borrowed. 

Why has my lender sent me a letter about persistent debt?

The Financial Conduct Authority (FCA) says lenders must contact customers who are in persistent debt.  
You should receive at least three letters, after 18, 27 and 36 months of being in persistent debt. The letters will tell you what you can do to clear the debt and what might happen if you don’t clear it.  

After 36 months, if you do not respond your account will be suspended. You won’t be able to borrow any more money. If you have a credit or store card, it will no longer work. 

Your credit rating may be affected, which may make it harder to borrow more money or open new accounts.  

Dealing with persistent debt

If you are in persistent debt, work out what you can afford. Try to pay as much as you can on top of your normal payments. You could also think about other ways of paying the debt back more cheaply. For example, you might be able to move the balance to a lower-rate or interest-free credit card.  

If you cannot afford your payments, you may be able to agree smaller payments with your lender.  

If you have been in persistent debt for at least 36 months, your lender should offer you ways of repaying the debt more quickly. For example, they may offer you a low-interest loan.  

Learn more about this topic

If you want to learn more about this topic, you can read our in-depth guide.

Read in-depth-guide

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