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How Can I Get Out of Debt?

With a simple legislated debt solution you can consolidate all your debts into one lower, affordable monthly repayment. Make one set payment per month for a set period, and after the period expires any remaining debts left are legally written off. This can be up to 90% depending on your circumstances.

Debt Collectors

What To Do If Your Debt Has Been Passed To a Debt Collection Agency

If your have debt that has been in arrears for a significant period of time, or if you have been sent letters of default on your debt, chances are you have been hearing from debt collectors on a daily basis. While this can be intimidating, it is normal when you are in debt. When you are dealing with debt collectors, it is important to understand that they are not bailiffs and they don’t have the power that they want you to think that they have.

What Is a Debt Collection Agency?

When the original creditor cannot get the bills that are in arrears paid, they hire a debt collection agency. These people specialise in collecting debts when the creditor has been unsuccessful. There are many debt collection agencies in the UK. Some of these agencies specialize in specific types of debt. There are also several large companies who specialize in all types of debt and they operate across several countries.

Debt Collectors Work in One of Two Ways

  • In some cases, the original creditor will sell or assign the debt to a collection agency because the amount of debt owed isn’t enough for them to fight for. After the account has gone into default, the contract that you signed with the original creditor is able to go to a credit agency. The creditor will sell the debt for less money than what you owe so that they can go after you for a lump sum of money. At this point, the collection agency is the legal owner of your debt and they make a profit by collecting the full amount owed from you.
  • In other cases, the original creditor will continue to own your debt, but they will use a collection agency to contact you to get you to repay the debt. When you do, the collection agency will be given a percentage of what you paid.

If you aren’t sure which type of collection agency you are working with, you can usually tell by looking at the letters you are receiving from the collection agency. If the letters are telling you to pay the original creditor, they still hold the debt and the collection agency is just helping the debt get paid. If the letter tells you to pay the collection agency, it means that they bought out your debt.

What Can a Debt Collector Do?

Debt collection agencies don’t have any legal power over you. They cannot do anything more than the original creditor could do to get you to repay. They can use several means to contact you, such as sending letters or making phone calls to contact you. They can also send you text messages or emails. When you receive this correspondence, it can be worrying. The collection agency could threaten court action. They can even threaten to send someone to your home. They are not allowed to lie to you or to make you think that they have more legal power than they actually have. Also, they cannot make an excessive amount of phone calls.

A collection agency could take you to court to force you to pay. If you are working with a company like our organisation who helps you repay your debts, they likely won’t take you to court. As long as you are willing to pay something, legal action is unlikely.

What Should I Do If a Debt Collector Contacts Me?

If you receive letters or calls from a debt collector, don’t ignore them. They are likely to take further action if you don’t reply. They will often ask you to pay the debt in full or in large instalments. You should only agree to pay an amount that you can realistically afford.

If you have been contacted by a collection agency, you should get in touch with us for free and impartial debt help. You should do this quickly before you situation gets out of control. We can help you create a realistic a budget and help you determine how much you can afford to repay. If you are not happy with the number of phone calls that you are receiving from a debt collection company, you should make a complaint.

Will the Debt Collector Come To My House?

The debt collection agency could send someone to your home. These people are called field agents or doorstep collectors. It is not very common for a debt collector to visit you at home. They are more likely to contact you through letters and phone calls.

If a debt collector does come to your home there are a few things that you should know:

  • They are not a bailiff, a sheriff, or an enforcement agent. If they pretend to be any of these things, they are committing a criminal offence.
  • You don’t have to open the door for them.
  • They are required to show you proof of ID.
  • If you ask them to leave, they have to go immediately.
  • They are not allowed to take anything from your home.

If a collection agent comes to you home, you don’t have to give them a cash payment. You are better off waiting and calling the company. This will give you a chance to sit down and look at your budget to determine how much money you actually can afford.

Will a Debt Collection Agency Add More Interest Fees and Charges to the Debt Owed?

If the debt gets sold to a collection agency, the interest charges will normally stop. After the account went into default, the original creditor will likely already stopped the interest charges. In some cases, the collection agency will add finance charges, however, they can only add the amounts that you agreed to in your original contract. If the debt is still owned by the collector, they can continue to add interest fees to your account when the debt collection agency is contacting you.

Common Questions about Debt Collection Agencies

Q: I have more than one debt collection agency calling me for the same debt. Which one do I pay?

A: You should be contacted by just one collection agency. If you are being contacted by more than one, you should contact the original creditor to find out what is going on. They will tell you which company you should pay and they will stop the other agency from trying to collecting your debt.

There are some collection agencies that use more than one name. It is the same company, they are just using two different names. To determine if this is the case, you should check the addresses on the letters that you are receiving. If they are the same or very close, it is the same company. Since this can be confusing, you can ask the collection agency to send correspondence from just one name.

Q: The collection agency is contacting me for a debt that isn’t mine.

A: This is very rare, but it can happen. The collection agency could be trying to find someone with a name similar to yours. To rectify the situation, read our advice on what you should do if you are being chased for a debt that is not in your name.

Q: How do I know if the debt collection agency is real?

A: Most of the UK debt collection agencies are regulated by the Financial Conduct Authority (FCA). They should also hold a valid consumer credit license. To be sure that they are licensed and real, you can contact the FCA.

Also, most collection agencies are members of certain organisations, such as the Credit Services Association and you will see the logo on the correspondence you receive.

Finally, you can contact us. We work with all major debt collection agencies in the UK and we can tell you if the company is legitimate.

Q: Can you help with debt collection agencies?

A: When you get calls or letters regarding your debt, it is a sign that it is getting out of control. This means that you should seek impartial and free debt help now.

We offer online debt advice 24 hours a day. It is confidential and free. It will take less than 30 minutes for a credit consultant to help you create a budget to help you start paying off your debt.

You can contact our Helpline for expert advice. The call is free from all landline and mobile phones. You can contact us Monday through Friday 8 am to 8 pm, and from 8 am to 4 pm on Saturday.