Getting Help With Debt Collectors

If you’ve got debts for which you are unable to keep up with repayments, you may be contacted about debt collection. The process can take many different forms, including reminder letters and in-person contact by collectors.

Because an external collection agency often carries out recovery, you can incur extra charges which add to the total amount you owe. To avoid these costs from mounting, it’s crucial to understand the process.

Luckily, IVA Helpline is on hand to advise you. We’ve compiled a complete guide to debt collection, explaining everything from court orders to dispossession procedures. Read on for all the must-know information about debt repayment, including some handy FAQs.

Remember: it’s always the right time to seek expert advice about your debt.

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What Is “Debt Collection”?

Debt collection – also known as debt recovery – is a process that occurs when a debtor’s repayments are repeatedly missed.

The majority of people have some kind of debt- whether that’s a credit card, an arranged overdraft, or even a store card. As long as this debt is being repaid according to its terms, debt collection won’t occur.

When a one-off payment is missed, you may have to pay a lateness charge. Provided you contact the company – before the payment is missed, if you can – you can usually come to an agreement that minimizes the strain for you. If this only happens once, you shouldn’t face significant issues.

But if you fail to inform your creditor that you’re struggling to meet payments, and if you continue to miss them, it’s a possibility that you’ll be passed to an internal debt collection team that will attempt to recover what you owe.

If this team are unable to agree on a plan with you, they will most likely get an external debt recovery company involved. This step usually occurs after you miss five or six deadlines, though some firms will act more quickly than others.

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Our trained advisors are here to help, so if you think an IVA proposal is one of the best debt solutions for you, don’t hesitate to call us on 0800 464 7235 to speak to one of our trained debt advisors or click below to see if you qualify…

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What Does A Debt Collection Agency Actually Do?

It’s important to understand what debt collection agencies are and what they do.

A collection agency is a separate company that performs services on behalf of the company you owe. After your creditor has contacted you and attempted to retrieve their money, they can pass your case on to a collection agency if they are unsuccessful.

This agency will perform a wide range of debt collection services, which can include getting a county court judgement (CCJ) or an attachment of earnings order (AEO).

Most collection agencies buy your debt from the original company and profit from charging you fees and recovering the money owed.

The Stages Of Debt Collection

There are four stages in the debt recovery process. If you’re struggling with debt and facing collection measures, it’s a good idea to understand these steps so that you know what to expect.

1. Late payment letter/demand

When a collection firm takes on your account, they will usually inform you via letter. They may also outline the action they intend to take, which is usually to set up a plan with you for the repayment of your debt.

In this initial stage, they will outline what they require from you, whether that’s a part of what you owe or additional charges that you’ve incurred.

2. Court action

Bailiffs of the courts don’t back debt collectors- and this means that they have no right to seize your property and must leave when you ask them to.

That being said, ignoring debt collection agencies for months on end can cause you additional issues. If letters, phone calls and even in-person visits are ignored, a collection firm can seek legal action (and take you to court).

For this reason, it’s a good idea to speak to collectors and attempt to reach an affordable repayment agreement rather than ignoring their communication.

3. Issuing of a judgement

If you fail to stick to your payment plan or do not reply to collectors correspondence, they can pursue a county court judgement (CCJ).

If a judgement is issued, you’ll receive a claim form in the post. You have two weeks to respond to this; you should respond as quickly as possible, because otherwise you may be court-ordered to pay at an unaffordable rate.

4. Enforcement

If you aren’t able to uphold your end of the CCJ, you may be contacted by bailiffs- ‘enforcement agents’- who will attempt to collect the money you owe from you.

If you ignore a notice of enforcement sent by bailiffs, they can visit your home after a week. They may charge you fees on top of collecting payment, further adding to what you owe.

If you respond quickly, it’s possible to take action to prevent their visit. It’s possible to get more time before bailiffs can come to your home if you fit any of the following criteria:

  • You’re disabled
  • You suffer from mental health problems
  • You are pregnant or a parent
  • You are a minor or aged over 65
  • You’ve recently suffered bereavement or unemployment
  • You don’t speak or write English

It’s important to understand the rules that bailiffs have to follow. They’re not allowed to take property from inside your home, but they can take your vehicle and hand you documents.

Remember, many debt charities, like Stepchange and National Debtline, can further advise you on your rights.

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What Does A County Court Judgement (CCJ) Mean?

If a collection agency takes legal action against you and you fail to respond, you might receive a high court to county court judgement (CCJ). This means that the court has ruled that you do indeed owe the amount stated.

The judgement will arrive via letter in the post. It will detail how much you owe, instructions for paying (in full or instalments), the repayment deadline, and the recipient’s details.

When you get a CCJ, you’ll need to arrange to pay back what you owe. If you can’t afford the terms of the judgement, you can ‘vary’ them- this means to lodge a change. If you receive a judgement, you mustn’t ignore it. This will result in you being taken to court and forced to pay on terms you can’t afford.

Call us on 0800 464 7235

Our trained advisors are here to help, so if you think an IVA proposal is one of the best debt solutions for you, don’t hesitate to call us on 0800 464 7235 to speak to one of our trained debt advisors or click below to see if you qualify…

Check if you qualify

How Does A Debt Collection Agency Enforce CCJs?

Debt collection agencies use different tactics to enforce CCJ rulings in their favour. In addition to sending letters, calling you and visiting your home address, here are the ways that CCJs are usually enforced:

  • Bailiffs: If your debt exceeds £600, your creditor can apply to the High Court for a Writ of Control. This authorizes bailiffs (High Court Enforcement Officers) to seize and sell assets totalling the value of the CCJ. Debts of less than £600 can be handed to county court bailiffs for collection.
  • An attachment of earnings order: Without using bailiffs, an attachment of earnings order arranges for repayments to be taken from your salary before you receive it.
  • Freezing your bank account: If a collection agency can obtain a Third Party Debt Order (TPDO), your bank account could be frozen, allowing for the repayment of funds without bailiff involvement.
  • Insolvency or bankruptcy: If you are insolvent, a collection agency may bring about insolvency or bankruptcy to pay off your debts.

 

Will A Debt Collector Come To Your Home?

Unlike representatives who the court appoints, debt collectors do not have to follow a formal process. They can come to your home without notice and may do so if their written correspondence is ignored.

Although they may come to your home, you have a right to refuse entry. Unlike bailiffs, they cannot seize your possessions or clamp your car. They are required to follow regulations – it’s a good idea to be aware of them.

What Rights Does A Debt Collection Agency Have If They Visit?

Just because debt collectors are allowed to visit you at home, it doesn’t mean that they can behave however they please. When visiting you, there are certain rules they have to follow.

Debt collectors can:

  • Pay a visit to your home
  • Talk to you about your debt, and attempt to set up a repayment plan
  • Ask you to make a payment

They cannot:

  • Visit your place of work
  • Threaten or intimidate you
  • Force entry into your home, or refuse to leave when you ask them to
  • Dispossess any of your belongings or seize your car
  • Talk to your neighbours, flatmates or family members regarding your debt

You can read more about what debt collection agencies can and cannot do on StepChange’s website here.

Should You Ignore A Debt Recovery Agency?

Although it may feel like the easier option to ignore letters from a debt agency, you’ll cause yourself more issues in the long run if you do this.

If you ignore debt collectors, their phone calls and letters will progress into in-person home visits. If you don’t want collectors to knock on your door, make sure you’re opening letters when they arrive.

If you can’t afford the repayment plan you’re on, you should call the agency as quickly as possible to set up an alternative plan. This will avoid missed or late payments and help you to stay on top of your debt recovery.

If you ignore a debt agency, you may also miss important notices and updates, including court actions or even statutory demands. This will lead to the escalation of the recovery process, which is something you’ll want to avoid if possible.

What Can You Do If Debt Collectors Visit Your Home?

There are a few things to remember if a debt collector visits you at your home:

  • You should always ask to see identification, as they should always carry proof of ID. Remember to take note of the collector’s name.
  • If you feel uncomfortable, you don’t have to answer the door. You have the right to ask them to leave if you’d prefer to handle your debt over the phone after they have left. Once you request they leave, they are legally obligated to do so.
  • If you don’t mind speaking to the agent, you can discuss your debt recovery options with them. If you have one, it’s a good idea to give them a copy of your monthly budget to indicate what you can afford to pay. You can either make a financial contribution on the spot or agree to a manageable plan.

Debt Collection Agencies In The UK

Here are just some of the most commonly used debt collection agencies in the UK:

  • Wescot
  • Access Credit Management
  • DLC
  • Direct Collection Bailiffs Limited
  • P&J Consumer Debt Services
  • Hilton-Baird
  • Rossendales

If you receive correspondence from any of these agencies, you can be fairly sure that their claims are legitimate. Still, it’s a good idea to double-check before handing any cash over or giving away sensitive details.

Before making any payments to an agency representative, you must always confirm the firm’s legitimacy. A genuine debt collector is legally obliged to give you full disclosure and won’t pressure you to give sensitive information or pay strictly via riskier methods like prepaid card payments.

Here are a few things you should be aware of when dealing with collection agencies in the UK:

  • Some companies trade under multiple names, which can be confusing for you during correspondence. Be sure to always check the address listed on letters to determine if the two firms are sub-divisions of the same agency. To make it less confusing for you, you can request the agency to only contact you using one trading name, and they should oblige.
  • You can expect full transparency. The agency must be able to provide information about the original creditor and the amount you owe.
  • Before proceeding further, it’s a good idea to contact your original creditor. They can confirm that your debt has been passed on to a collection agency to reassure you.
  • It’s also good practice to always search the company online to check that it is a legitimate, UK-based business.

Get In Touch With IVA Helpline Today For Tailored Debt Advice

We know better than anyone that money issues can be immensely stressful. It’s easy to fall behind on payments, whether due to unemployment or unforeseen circumstances. Once you’ve missed a deadline or two, it may seem like the easier option to leave your bills unopened.

However, ignoring your debt will only allow it to further stack up. You may find yourself faced with higher repayments than you can afford; the collection proceedings will still escalate, just without your involvement in the discussion.

Whatever stage you’re at with debt repayment, we’re here to help. After a confidential chat, our financial advisers will be able to help you with your next steps, giving advice tailored to your unique situation. We ensure that you’re not alone in what can be a very confusing process.

It’s never too late to reach out for debt advice. Call us today on 0800 123 4567.

Frequently asked questions

  • Can debt collection agencies take my car if I don’t let them in?

    There is a key distinction between debt collectors and bailiffs. A debt collector belongs to an agency that has purchased your debt from the original creditor, while bailiffs are enforcement agents who are either self-employed or work for a public or private company.

    While collectors can visit your home to request the settlement of your debt, they cannot seize your property. This means they cannot take your car and have to leave when you tell them to. Bailiffs, on the other hand, are hired to remove and sell off your goods to pay off your debt. They can take your car from the road.

  • What happens if I let a debt collector into my home?

    If you let a debt collector into your home, they are not legally allowed to seize any of your possessions to repay your debt.

    Provided they stick to the rules they’re obliged to follow, they will ask you to set up a payment plan. This may involve discussing your monthly budget and determining how much you can afford to pay. The collector may also ask you for an upfront contribution, which you are entitled to decline.

  • How long does the debt collection process take?

    Because different creditors collect unpaid debts in different ways, there’s no simple answer to this question. Some companies will act faster than others and take different approaches to the collection process.

    By the time you’ve missed five or more repayments on a debt, your debts which are regulated by the Financial Conduct Authority (like store cards and overdrafts), will have defaulted. By this stage, your creditors may also be pursuing a County Court Judgement.

    Before bailiffs become involved, it’s a good idea to reach out for debt advice. No matter how many letters you may have received, it’s never too late to get your finances in order.

  • Which debts can be collected by an agency?

    All debts that the Consumer Credit Act regulates can be sold to debt collection agencies if you fail to meet your terms. Most debts that consumers have- including overdrafts, store cards, credit cards and catalogue debt- fall into this category.

    This means that if you miss multiple repayments, the original crediting company can pass your account onto an external debt collection agency. These companies- which make their money by collecting debts- will attempt to settle what you owe while often charging additional fees and interest.

    It’s possible to set up a payment plan if small but regular payments suit you better.

    Even if the bailiffs refuse your offer, you should still make attempts to pay them. This will make it easier to negotiate with them as you’ll be seen to be willing to pay the debt.

    If the bailiffs gain entry to your home, don’t worry as it’s not too late to pay them. This will prevent them from taking your possessions and charging you extra fees.

    Ultimately, if you’re able to pay some or all of the debt, it’s better to do so. The worst thing you can do is simply refuse to pay if you’re able to, and you’ll be at risk of losing all of your valuable possessions.

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