Arrears happen when you miss a payment and owe money to a company. While it might sound worrying, arrears aren’t a big problem as long as you fix or address the issue quickly. You can either pay what you owe or contact the company to agree on a solution.
Arrears and defaults are similar but not the same. Arrears are unpaid amounts from a recent missed payment, while a default happens when arrears are not fixed. A default can harm your credit score, but arrears won’t; just act fast to resolve them.
If you have finance with LM Operations and find yourself in arrears, contact us on 01695 0698, and we’ll help you. You can also get free debt advice from the Money Advice and Budgeting Service (MABS). They offer free financial tools, advice, and support to help you manage your money better.
What Should You Do If You’re In Arrears?
What Are Arrears?
We all make payments regularly, like utility bills or car finance. These are often due monthly. Sometimes, life happens, and you might miss one of these payments. If this happens, your account will go into arrears, meaning you owe money for that missed payment.
Arrears are not a major issue if you correct the missed payment quickly.
Arrears vs. Defaults
Arrears and defaults are both caused by missed payments, but they are different:
- Arrears: This is a missed or late payment from the past few days. Your credit score won’t be affected if you resolve it quickly.
- Defaults: If arrears are not fixed, your account may default. This means the missed payment has been left unpaid for too long, and between you and your creditor, you have not found a mutual solution to the issue. A default can harm your credit score, and you might also face extra fees or interest.
What Should You Do If You’re In Arrears?
If your account is in arrears, here’s what to do:
- Check Your Account: See why the payment was missed. Maybe there wasn’t enough money in the account, or a direct debit failed.
- Move Funds: If it is related to money not being available and if it is possible, transfer the money to the right account and make the payment.
- Contact Us: Reach out to LM Operations at 01695 0698. We’ll help you find a solution and agree on a new way forward.
When you contact us, we’ll explore your overall options. This will include ways you can pay the money back – whether it is now, or a plan is set up, deferring payments, a new payment schedule or a payment holiday.
This call allows you to ask as many questions you like. However, if we don’t hear from you, we’ll try to reach out. If we still can’t get in touch, your account might default, which can lead to extra charges and damage your credit score.
What Free Support Is Available?
If you’re struggling, there are free services to help you manage your money:
- Money Advice and Budgeting Service (MABS): They provide free, confidential advice and tools to help with debt and budgeting.
- Free financial health checks
- Budgeting tools
- Support for managing your finances
Visit the MABS website to learn more.
- Citizens Information: Another helpful resource for advice and links to financial support services.
In Conclusion
Arrears can happen easily if you miss a payment, but the most important thing is how you respond. Try to fix the issue yourself by moving funds into the right account. If that’s not possible, contact the company you owe money to for help.
If your car finance is with LM Operations, contact us for assistance. You can find the best way to reach us on our website. With quick action and support, you can fix arrears and avoid further problems.