How to Deal with Debt Collectors
Debt collection in the UK has to be carried out by registered Debt Collection Agencies (DCAs). DCAs usually collect debts as a third party for the initial debt owner. Legally, they must follow the Fair Trading Act when recovering debt so the most important thing is that you know your rights.
In this guide:
- What should I do if a debt collector contacts me?
- What if I do get a home visit from a debt collector?
- What are debt collectors not allowed to do?
- What do I do if I can pay the money I owe?
- What do I do if I cannot afford to pay the money back?
What should I do if a debt collector contacts me?
It is important to know that you shouldn’t ignore debt collectors when they try to contact you via telephone or post. It may lead to further contact or a home visit.
You need to find out how much they think you owe, and who the debt is being collected by. If you haven’t received a letter explaining these details then contact the DCA and request a copy of your original credit agreement. This way you have proof of what you owe and you cannot be misled by the debt collectors.
If you do not wish to be visited at home you can contact the DCA and tell them that you only want to be contacted by post. Calls and home visits mean that it is difficult to keep track of what they have told you so letters mean you can stay in control.
What if I do get a home visit from a debt collector?
This is usually uncommon but remember that they’re not allowed inside your home unless you give them permission to do so. You don’t even have to answer the door if you don’t feel comfortable doing so and they are legally required to leave if you ask them to.
Bailiffs and debt collectors are very different. Debt collectors have no legal power and they are not allowed to take things from your home - they are only allowed to talk about the repayment of your debts with you.
Do not pay any money to a debt collector unless you have received a copy of your original credit agreement and you know the company and the debt you owe is legitimate.
If they are rude or abusive to you in any way or you are not happy with the way you are being treated, you can make a complaint to your creditor.
What are debt collectors not allowed to do?
- Contact you at your workplace or via social media
- Give you incorrect or misleading information
- Contact you outside the hours of 8am-9pm on working days or at all on weekends and holidays
- Tell other people such as family about your debt situation
- Harass you with deadlines or threaten to take illegal action against you
What do I do if I can pay the money I owe?
You should request that the bill for the money you owe is sent to you in writing. Avoid paying in cash as it is safer to pay by debit/credit card or by cheque as there is proof of the transaction.
Once you are satisfied that the debt is legitimate, pay as soon as possible if you are able to. The longer you wait to pay the money back, the more likely you are to receive home visits and be threatened with court action or bailiffs. Even if you can only pay some of the money back for now, this is still the best action to avoid continuous bother from the DCA.
Once the money is paid back, ensure you tell the creditor to change your credit file to show that you have paid back the debt. This means you are less likely to be refused credit on important payments in the future.
If you are being contacted by multiple DCAs and you are unsure of who to trust, contact the original creditor who you owe the money to and they can advise you as to which DCA they are working with.
What do I do if I cannot afford to pay the money back?
Talk to the DCA. You may be able to arrange a debt management plan and repay it in monthly instalments.
Beware that the original creditor can continue to add interest onto your debt if this is allowed in the contract that you initially signed with them. Usually, the interest is stopped when the debt is sold to a DCA but there is a possibility that if you leave the debt for a long time it may grow.
We can help you resolve your debt in a number of ways. If you need any more help with the following options then call us on 0161 503 0083.
Debt management plans
A debt management plan is a customised monthly payment plan to suit your needs and financial means and allow you to pay back your debt in a stress-free way. Simply fill in your details on our website, wait for the call from us and start clearing your debt. This way you avoid taking out any extra loans and you can combine multiple debts into one payment so that the repayment process is much simpler.
Individual Voluntary Arrangements (IVAs)
An IVA is a contract between you and your creditor to arrange the legal protection for both of you whilst the debt is being resolved. It ensures no further interest is added to your debt, letters and calls from your creditor are ceased and after 60 months, if you have complied with the contract, then the rest of your debt included in the IVA will be written off.
Debt Consolidation Loan
The idea of a debt consolidation loan is that you take out a loan of the same value as your debt, and then pay this back in monthly instalments instead of your debt payments. We give your monthly payments to your creditors so that you don’t have the pressure of paying back multiple debt payments yourself. It can even boost your credit score if you manage to pay off the loan without getting into any more debt.