What Should I Do if My Debt is Passed to Debt Collectors?

This debt advice applies to individuals in the UK with personal debts.

You’ll certainly be contacted by debt collectors when you’ve been constantly falling behind payments, or when your account is in default. This may be suffocating yet this is how a collection process works for most types of debts.

One thing you should keep in mind though that debt collectors or debt collection agencies are not the same with bailiffs or Sheriff Officers.

What Is A Debt Collection Agency?

Debt collection agencies are companies who’s expertise pertains to debt collection. These are companies that creditors rely on if they can’t secure the arrears that need to be paid.

There are several debt collection agencies in the UK. Some of which are small companies that are concentrating on certain types of debt. Others are big agencies that operate across countries.

How Debt Collectors Works?

Normally debt collectors function in two ways. This can either be:

  • The debt has been assign or sold to a collection agency since you’re not paying the required debt payments set by the creditor under your agreement. The agreement you acknowledged with the original creditor enables when you’ve defaulted in your account. Your creditor sold your debt at a lesser value or reduced cost to obtain a lump sum payment. The collection agency legally owns the debt and gets its gain by collecting the full amount that you owe.
  • Your creditor employs a collection agency to collect payments from you. The debt collection agency will usually be rewarded a portion of the collected debt payments.

You may check the letter you got from a collection agency to determine if they ask you to secure payments or they ask you to pay your creditor. If the latter is stated, it would mean that your debts haven’t been sold.

How Can Debt Collectors Recover the Debt?

Debt collectors do not possess any legal power which is different from your original creditors. Most debt collection agencies will contact you through a letter, phone calls, SMSs, or through an email. They may talk about taking court matters or sending someone to your premises. However, they can’t mislead you from implying what legal powers they hold against you nor make an excessive number of calls.

Taking legal matters if you failed to pay is unlikely to happen when the debt collection agency is informed that you’re currently seeking debt advice from certain agencies or organizations like us.

What to Do If Debt Collectors Contact You?

The bottom line is never to ignore debt collectors as they may take further action if they don’t hear from you. Some may request you to pay off the full amount or make large installments. In this case, you must negotiate and offer to pay what you can afford.

If you’ve been contacted by a debt collection agency, you can give us a call right away. We can help you get the situation under control.

Should A Debt Collection Know that I am A Vulnerable?

Vulnerability is determined under certain circumstances. Once a debt collection agency knows your current situation they may be able to put special measures in place or be more considerate towards you. Read our guide on how to manage debt if a person is vulnerable.

Can Debt Collectors Visit My House?

A debt collection agency can have its debt collectors or also known as doorstep agents or field agents visit you. However, unlike bailiffs, they cannot take goods from your home. Besides, in practice, they are more likely to communicate through emails, phone calls, or letters.

Things to remember when you got a call from debt collectors:

  • debt collectors pretending to be bailiffs or sheriff officer is a criminal offence
  • there’s no need to open the door and let them in
  • they have to introduce and show proof of ID
  • they must leave when you request them to
  • unlike bailiffs, they can’t remove goods from your home

Are there extra charges and more interest added by a collection agency?

If your debt has been sold to a debt collection agency, interest and charges are discontinued. In fact, the creditor might have stop interest and charges when your account defaulted.

However, a debt collection agency can proceed in imposing interest and charges but should only be the amount stipulated in your contract.

On the contrary, if t hasn’t been sold, your interest and charges will continue to add up while you’re being chased by debt collectors.

Common Questions About Collection Agency

Which debt collection agency should I pay if I am contacted by more than one?

If this happens, you have to reach out to your creditor and ask which debt collection agency is dealing with your debt. There should only be one collection agency to contact you for debt payments.

I am contacted for a debt that I do not owe

Though this can be rare, if a collection agency is tracking someone with similar names as yours, you might need to contact them. It’s suggested to get advice and check on the alternatives on how you can respond to this situation. Should you wish to speak via phone, call us on 0800 193 1024.

How to determine a legit debt collection agency?

Most debt collection agencies in the UK are managed by the Financial Conduct Authority and hold a valid consumer credit license. You can communicate with the FCA to examine if a collection agency is accredited.

Where to get help with debt collection agencies?

If your debt is sold to a debt collection agency, or if your creditor uses a debt collector to chase unpaid arrears, it’s a sign that you must get debt help right away. You can use our online debt advice tool or call us on 0800 193 1024.