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Debt Collection Help & Advice

What is a debt collection agency?

If you have been sent default notices from creditors or have been in arrears with your debts for some time, you most likely will start to hear from debt collectors.

Debt collection agency companies specialise in collecting debts. There are a variety of debt collection agencies in the UK specialising in certain industries and types of debt. They work in one of two ways:

  1. The creditor is still the owner of the debt but will ask the agency to collect the debt on their behalf, and the agency will be paid a percentage of the money they collect.
  2. The creditor will sell your debt to a collection agency for a reduced price and receive a lump sum from them. This means the debt collection agency becomes the legal owner of the debt.

Once a debt collector takes over your debts, your original creditor will no longer contact you for payment – all communication will be carried out by the debt collector.

What is the debt collection process?

The debt collection process will differ from lender to lender as to how quickly they act, how sympathetic they are and what further action they may take.

Each lender will dictate their own methods of collecting what they are owed but each will often dictate penalties for failing to make payments and additional methods they can undertake to claim what they are owed.

If you miss payments or fail to repay the loan this will severely affect your credit score reducing your ability to attain credit in future.

Is there a difference between a bailiff and a debt collector?

Bailiffs and debt collectors are involved with debt at different stages of the debt collection process and are very different.

A bailiff is appointed by a court to collect your debts. There are also 4 types, magistrate’s court, country court, Sherriff court or private. They have the power to repossess and sell your possessions or home to repay your debts.

You can read more about what bailiffs can do here.

What can a debt collector do?

Debt collectors don’t have any legal powers and can only carry out the same procedures as your original creditors. This means they will contact you via letters and phone calls and may also threaten court action or that they are sending someone to your house. However, they are not allowed to make an excessive amounts of phone calls or lie about their legal powers.

A debt collection agency can take legal action against you in the form of a CCJ if you refuse to pay. However this is less likely if you are actively getting help with your debts and are prepared to pay what you can.

Debt collector’s rights

Debt collectors may send you a notice stating they are sending an agent out to visit your home, however, they do not have the right to forcefully enter into your home, demand you pay there and then or seize your possessions. You should also never pay them in cash as this could be a scam, call the debt collection agency if you wish to set up a payment plan.

It can be unsettling having a debt collector visit your home, but it is important to remember that you do not have to let them in to your home or even open the door to them. They must provide you with ID if you do choose to let them in – if they don’t have ID you are well within your rights to refuse to speak to them.

If you believe you are being harassed by a debt collector you should file a complaint

What to do when your debts are passed to a debt collector

Debt collectors will usually only become involved if you have been in arrears with your debt for some time. This is a normal process, however as stated above, each lender will have differing attitudes towards when they decide to involve debt collection agencies.

What to do if you are contacted by a debt collector

The worst thing you can do is ignoring the calls and letters from debt collectors, they are more likely to take further action if you don’t respond.

Once a debt collection agency gets in contact, you should seek debt advice as soon as possible and put together a budget to work out how much you can realistically afford to pay a month.

What to do if a debt collector visits your home

A collection agency may send out a field agent to you home, however it isn’t common, debt collectors are more likely to send you letters or contact you by the phone. However if an agent does visit your house it’s important to remember that:

  • You don’t have to open the door or let them in your home
  • They must provide you with ID
  • They can’t take any possessions from your home – they are not a bailiff
  • If you ask them to leave then they must

You should always ask to see a debt collectors ID to ensure they are real. Most agencies in the UK are regulated by the FCA, or a member of the Credit Services Association. You can contact them to check if the agency holds a valid license.

Will debt collectors add more interest and charges to your debt?

When your debt is sold to a collection agency, any interest and charges usually stops. Most likely this would have stopped when your account defaulted with the original creditor.  In some instances the debt collector may continue to add interest and charges to your debt, however they can only add amounts which are stated in your contract with the original creditor.

If the debt is still owned by the original creditor then they may continue to add interest and charges at the amounts you agreed to in your original contact.

What happens if you miss a payment

If you miss a payment it is important to rectify the matter as soon as possible. Your debtor will more than likely make contact to let you know you have missed your allocated payment date, the penalties it may incur, and they might also ask if there are ways they can help you to make payments easier if you have encountered a specific problem causing a temporary financial hardship.

What happens if you are missing regular payments

Continuing to fail to make payments will result in a less understanding creditor. They will put additional pressure on you to make organised and structured payments. They may threaten further action. A fair creditor may offer advice as to where you can get help and advice in organising your financial affairs and making the repayments. Your account could be defaulted at this point and handed over to a debt collection agency, bailiffs or sheriff officers This will have a big impact on your credit rating.

At this point your debt could be handed over to a debt collection agency or you could be in danger of being taken to court with your debtors applying for a County Court Judgement. A CCJ can be collected by bailiffs who work for the Court and hold more power than standard debt collectors.

Any missed payments will be recorded on your credit file, which will make it harder to obtain credit. However, if your money troubles are only short term and you are able to pay your arrears at an early stage, you may be able to continue paying your debts off as normal.

What is a creditor entitled to do?

Chase the debt

They can write or telephone to explain the situation and also to try to arrange a suitable outcome.

Send debt collectors

Debt collectors do not hold the power of a bailiff but creditors can choose to use them if they think they will have success in collecting payment.

Increase your interest and charges

By failing to meet the existing terms you can be penalised by incurring further penalties and higher rates of interest.

Default the agreement

If you have missed up to six payments the creditor can default the loan that will stay on your credit report for six years.

Pass the debt to a collection agency

An agency will be much more persistent in collecting payments, often in person visiting your home and workplace.

Apply for a County Court Judgement

If the courts become involved in your debt you must complete all paperwork as dictated and make any payments they request. If you fail to comply further action will be taken resulting in more serious consequences.

Issue a statutory demand

This is your creditor’s first step to making you bankrupt. This is not a common step and can only be issued on debts of over £5,000.

Being aware of your rights is vital to ensure you are equipped to make the best decisions should you come into contact with debt collectors, sheriff officers, or bailiffs. Find out more about what you can do in these circumstances below.


Sheriff Officers 

What to do if more than one creditor is contacting you

There should only ever be one debt collection agency contacting you in regards to your debts. If you are being contacted by more than one agency you should contact your original creditor to confirm which debt collection agency is acting on their behalf.

Sometimes debt collection agencies may use more than one trading name, you can check if they are actually the same company by the addresses on the letters – if they are the same or close then it is most likely the same company.




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