Understanding the Debt Collection Process

Various lenders have several ways to obtain delinquent debts. They differ in terms of the pace they operate, their approach when reaching out to you, as well as the steps they might consider. This means no one can tell what can happen if you fall behind payments.However, we can give you general tips that are usually practiced by all. These idea will give you a clear understanding on what you can expect during a debt collection process.

Your creditors can likewise lead you in getting debt advice. The earlier you can get advice the more beneficial and easier to take your situation in control. Any missed payments are registered into your credit record. However, if your financial struggle isn’t permanent, you can to keep your paying your accounts like you normally do.

Missing One or Two Debt Payments

When you missed one to two payments, your creditors will contact you either by writing of phone to request payments that you’ve missed. Your creditor will ask to keep your account on top of payments, unless there’ an agreement for a temporary payment break. At this point your creditor might be more sympathetic and may inquire regarding you situation if any significant changes hinders you to secure debt payments.

Missing Three or Four Debt Payments

The moment you missed one to two payments, you creditor may just remind you to update your account. However, when you missed thee to four debt payments, your creditor might put pressure on you to pay off your arrears. They might be more stringent in collecting the money that you owe either via phone or letter. They may also tell you that they will take necessary steps to recover the debt.

If your account in associated with Consumer Credit Act, you may be getting a default notice , after your account will default. This can affect your credit record, making t difficult for you to obtain further credit.

Perhaps, your account might be closed and actions are already in place to collect what you owe. Your creditor must have forwarded your debt to a collection agency. When this happens the collection agency will contact you to ask for payments.

Missing Five or Six Debt Payments

If you’ve missed five or six payments, surely you’ll get several notices and phone calls from creditors or collection agency. You should have reach out or consider debt advice straight away while its early.

Regulated debts may have been defaulted if you reach this stage; these debts are credit cards, store cards, overdrafts, catalogue debt, personal loans, HPA or hire purchase agreement. Furthermore, creditors are likely to consider or start further steps to recover the money. Usually, creditors are likely to forward your debt to a specialist debt collection agency right after your account was defaulted..

A more grave steps can happen if you kept on ignoring your situation. If you’re a resident of England and Wales, some creditors will consider taking your case to court and applying for a CCJ or County Court Judgment. While Decisions and Decrees can be considered for creditors in Scotland.

Since you missed payments, creditors are putting your account on default and taking further actions against you. If this happens, your credit file will be severely affected. If you can’t simple handle the situation, you should get a debt advice immediately. Contact us so we can help you put the situation under control.