As news came in about BrightHouse going into administration this has raised a number of questions such as what this means for BrightHouse customers, do they get to keep their goods, what if they cannot manage their repayments, does the debt still exist etc.
We took the time to do some research and hope the information below will help shed some light on a few of these queries.
What is BrightHouse
BrightHouse is a rent-to-buy company, which offered household appliances and furniture on Hire Purchase and/or loans to people who could not afford to buy items outright.
What happens now that BrightHouse has gone into administration
Although Bright House has entered administration, it does not mean a customer should stop paying. The company has simply passed onto administrators (Grant Thornton) who are dealing with the day-to-day running of the company and its assets, which means the customers agreement still exists.
Customers must continue to maintain payments to prevent damaging their credit history and breaching the terms of their contract, which could result in further interest and charges being applied.
Selling loans to other lenders or agencies
BrightHouse’s appointed administrators may choose to sell the loans off in order to raise money; if they do sell the loans off it will mean owing money to another lender instead of BrightHouse, so the loan will still exist.
What about the warranties and insurances a customer paid for
The administrators have confirmed that for the time-being those customers who have warranties and insurance claims will continue to have these honoured but any servicing of items, warranties and insurance claims will be subject to government guidelines based on the current Covid-19 situation.
However, if BrightHouse goes into liquidation and a customer paid for additional services such as a warranty, in case the appliance became faulty and needed replacing or repairing, it would depend on who was offering this service. In order to identify who was offering this service a customer will need to look at their agreement.
If BrightHouse was offering the service than unfortunately a customer will no longer be able to benefit from this service; however, if a third party was supplying the service (such as Caversham Insurance Ltd, whose services BrightHouse would offer its customers) than a customer could still be covered under the terms of the agreement.
Struggling to maintain agreed payments
If a customer is struggling to maintain the agreed payments (due to current circumstances) they can request a payment holiday (this should not affect a customer’s credit history) or, if a customer believes they can offer something, s/he could request that payments be reduced to something more affordable (a customer may need to show a budget sheet supporting their request).
This can be done using the following web-link - http://www.brighthouse.co.uk/contact-us
If a customer has been struggling to maintain payments for a long time because their income has been too low and their repayments too high, leaving them with very little money to meet other household bills and relying on further credit to make ends meet, they may be able to put in an affordability complaint (a customer should do this at the earliest on https://www.brighthouse.co.uk/existing-customers/complaints-procedure).
As the company is in administration a decision, in regards to the complaint, may take a very long time to be reached; and when a decision has been made (and if a customer is successful) s/he will go on a long list of people who are owed money by the company.
This list will go in order of priority and big lenders such as banks and suppliers will be paid first and whatever remains after this will be distributed amongst everyone else.
Consequently, this could mean a customer ends up with very little to no money, dependent on how much remains after big lenders are paid.
Still owe money to BrightHouse and have put in an affordability complaint
Once a complaint has been looked at and a decision reached (and if the complaint is successful) the customer will not receive the money directly; instead the money will be ‘offset’ against the debt owed i.e. if a customer still owes £500 and s/he is awarded £200 for a successful complaint, this money will be deducted from the total the customer owes, reducing it down to £300. The customer would then need to come to an agreement to pay the remaining outstanding balance of £300 (by instalments or in full, based on a customer’s financial circumstances).
What happens to the goods if BrightHouse goes into liquidation
It is not currently clear what will happen if BrightHouse goes into liquidation, it is speculated that if BrightHouse disappears the liquidators are unlikely to take back the goods from customers because they will then have to sell these second-hand items on in order to raise money; but this has not been confirmed.
For more information – to keep updated on BrightHouse follow Debt Camel’s Sara Williams on https://debtcamel.co.uk/brighthouse-administration/
Need debt advice – If you need debt advice please contact our dedicated FREE helpline number on 0808 164 2480 (Monday to Friday, 10am to 5pm) or via our dedicated website https://www.debtfree.london/.