With the so called ‘death of the high street’ and Coronavirus, there has never been a more troubling and challenging time for retail. What were once well established high street staples like Debenhams, BHS and Monsoon have found business so tough they have even had to close down. This can often mean that we find ourselves in a situation where we think we owe money to a business that has shut. What happens to our debt? Do I need to keep paying it off or will it simply be written off?
First things first, before we get excited and assume we are debt free, it is important to find out what has actually happened to the firm. Have they ceased trading or have they actually ceased to exist completely? Just because their shops are closed doesn’t mean they have disappeared completely; perhaps they are winding up their business.
Sometimes when a business ceases to trade, they actually sell their assets and debts, meaning that you will still owe the money; you will just owe it to someone else.
Will my debt be written off?
Sadly, it is highly unlikely that your debt will disappear. Many companies issue their store cards via another third party credit firm and it is actually them that you owe money to. That means that even if the company you bought goods from wraps up, you will still owe money to the third party firm.