You’re in debt but what can your creditors actually do?

posted by in Bailiffs, Client info, Collection Process, Debt, Debt Law

Last updated: 20th February 2015

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There can be lots of misconceptions about what creditors (your lenders) can and cannot do. We hear from clients that are scared stiff of bailiffs (enforcement agents) or being sent to prison when they’ve only missed one or two payments or just received a default notice or a CCJ (County Court Judgment) through the post.

A lot of action by creditors will be tactics to encourage you to make extra payments, so it’s useful to know what your rights are to help to put your mind at ease.

Knowing what creditors can and cannot do and understanding the debt collection process can help to remove a lot of worry and uncertainty around unsecured debts.

What can creditors do?

  1. They can chase you for the debt by phone or letters; see our article about what to do if creditors keep phoning you.
  2. They can send doorstep collectors; it’s really important to realise that these are not bailiffs and have no more power than someone ringing you. It’s unusual for a high street lender to use doorstep collectors as it’s cheaper and more effective for them to call you.
  3. They can continue to add interest and charges to your account in line with the original agreement.
  4. They can take money from connected accounts. For example if you have a credit card and a current account with the same bank they can dip into the current account and take what is owed on the credit card; they don’t need permission from you. This is called the right of offset.
  5. They can issue a default notice, usually sent after 3-6 missed payments. This is something your creditors are legally required to send once you’ve defaulted on the original agreement.
  6. They can pass the debt on to an internal or external debt collection agency. These don’t have any more legal powers than the creditor.
  7. They can apply for a County Court Judgment (CCJ). If you receive one of these you must fill in the paperwork and make an offer of repayment for the court to consider. The court will set a repayment and it’s important that you stick to this.
  8. Some collection agencies issue a statutory demand, a way of enforcing bankruptcy. However in most cases these are used as scare tactics and it’s very unusual for creditors to actually enforce these.

What can’t creditors do?

  1. They cannot harass you; you have a duty to keep your creditors informed of your situation but that doesn’t mean they can ring you every hour, day after day. Request that they only contact you in writing and make sure you open your mail. You can read more about debt collection guidelines on the Financial Conduct Authority website.
  2. They cannot break data protection laws, so they cannot speak to your family, friends, neighbours or an employer.
  3. They cannot stalk you on social media – see our blogpost 10 ways to stop debt collectors finding you on social media.
  4. They may threaten bailiffs but unless you have defaulted on a CCJ then what they actually mean is a doorstep collection agent. This is often used as a scare tactic and anyone who calls at your property has no more power than someone calling you on the phone. You don’t need to talk to them if you’d prefer to talk over the phone or by letter (unless they are from the courts or the debt is for Council Tax).
  5. If you do get County Court paperwork through the post and you make an offer to the courts that the judge accepts, the creditors have to abide by it as well.

What experiences do you have with creditors? Post a comment and let us know. And if you’re going through the mill with your creditors at the moment, get free debt advice from StepChange Debt Charity.

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Pavan Gata-Aura is a qualified debt advisor with 6 years of experience. She enjoys spending time with her two children, fundraising for charities, has spent time volunteering in Africa and takes part in organised races.

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Tags Bailiffs Client info Collection Process Debt Debt Law
  • Samantha

    I am now resident in the UK and having a credit check carried out. Can they access my ongoing debt in the Republic of Ireland.

    • moneyaware

      Hi Samantha,

      Thanks for posting.

      In this case it’d probably be worth getting in touch with one of the main credit reference agencies in the UK for example, Experian, Noddle or Equifax.
      They should be able to help you with your query and offer more specific advice about your credit file.

      I hope this helps,

      Jen

  • Ash

    We own a limited company and myself, brother and mum are named directors. My brother has personal debt and an enforcement agent came to the business premises from the courts. Are the allowed to force entry and collect debts from the business premises?

  • Sam

    I have a default on my credit file for £198.00 from Lowell Portfolio. I believe the debt was sold to them by another debt collectors agency who bought it from Orange in March 2012.
    When looking at my credit report the account with Orange and the other debt company is satisfied. However Lowell’s is in default from 12/03/13. Can Lowell put my account with them in default if Orange has settled? I also have not received any letters stating they had taken control of my debt or any letters stating a default would be applied.
    The first contact I had with them was last Monday when I found the default on my credit score. Realizing this must stem back to orange (which I thought had been resolved with Orange…then with the first debt collection agency due to an unfair cancellation charge),
    Stupidly i paid a settlement fee there and then (Stress from exams the next day and the fact I had had a failed application in principle that morning for the mortgage I need to get ASAP) I thought settling the debt meant it was removed from my credit score but later realized this was not the case at all.
    After more research and days that have passed I am completely stressed out over that fact i paid them anything.
    Need to try my best to get this removed from my credit score as i needed a mortgage approval yesterday?!

    Any help would be massive!
    Thank you!!
    Sam

  • Lucy

    A relation has debt from varied places (from payday loans, to store cards, to unpaid fines, parking penalties, etc). He currently lives with his mum, who is widowed. She is scared that bailiffs will come and take her belongings, because they live at the same address and he has no belongings except his clothes and a few bits and bobs.
    From reading the above, I suspect he has had more than one doorstep collection agent arrive, and there are multiple letters unopened in the house, which could be anything including CCJ requests. (This has been happening for a long time and from experience it easily could be, but as his mum is not allowed to open his post she can’t be sure)
    As a result of all of this, she frequently makes payments for him – which she cannot afford. I really want to be able to reassure her that even though they are in the same house, none of this can come back to her, as it isn’t her debt and bailiffs wouldn’t take her things.
    Please could you advise?

    • moneyaware

      Hi Lucy,

      It’s really important that your relation’s mum makes it clear (if there are any visits) that any items in the property don’t belong to her son. Bailiffs (enforcement agents) have a duty to make sure they don’t act unreasonably in these types of situations, and they should be understanding of the situation. However sometimes they may ask for proof of ownership for any items they suspect may belong to the other person, but might not.

      There’s no hard and fast answer in this type of situation as the person is living at the property and therefore might own goods, and in some cases that might mean an enforcement agent can visit.

      Her son, if possible, could look to seek expert debt advice to deal with the situation, and his mum shouldn’t ever feel pressured to pay towards debts that aren’t hers, and she has no liability to repay.

      As long as she’s aware of difference between bailiffs and doorstep collectors and she doesn’t let anyone into her property in this situation, she should be able to deal with situations like this without having to be made to feel vulnerable.

      You can read more about debt collectors and bailiffs here: http://moneyaware.co.uk/2012/06/debt-collectors-are-not-bailiffs/

      I hope this helps,

      Rory

  • Peter Wilcox

    Hi,
    My flatmate is being chased for alleged council tax arrears. This is for a property he owned but that I lived in. The tax was either paid by me or via housing benefit. But it was paid.
    The council obtained a liability order by sending the paperwork to an address they knew he was not at. Therby he was unable to defend himself in court.
    He since wrote to the court and sent a Stat Declaration to the court stating his case. The court did not respond to either.
    Now debt collectors have the matter.
    We now share a flat in sheltered housing. He has no assets beyond a bed, small tv. Other things belong to me.
    He does work.

    • moneyaware

      Hi Peter,

      Thanks for posting.

      This seems like something you should take up with the council directly, as in the majority of cases, whoever is living at the property is liable to pay the council tax bill, whether this is yourself or the landlord of the property. As you’ve mentioned that the council tax was paid, it could be worthwhile speaking to them directly and explaining this.

      These types of situations can sometimes be difficult to deal with, and it’s likely that the debt collection agency is working on behalf of the council and will act on their instructions, so speaking to them directly could help.

      Best of luck with this, I hope you get things sorted.

      Rory

  • dan

    as a stupid young adult i ran up some credit cards etc that is now beyond anything i could afford to pay back however i do have a small amount of savings for a rainy day , is this safe in a bank account in my own name ??
    any advice apreciated

    • moneyaware

      Hi Dan,

      Whether this money is safe would depend on whether you owe any money to that particular bank. It’s possible for a bank to take money from a bank account to repay debts on another account, such as a loan for example.

      If you don’t owe any money to the bank you hold your savings with then companies would only be able to take money from that account with your permission, with something like a Direct Debit or card transaction.

      You mention that you don’t think you’ll be able to repay these debts, if that’s the case then I’d recommend getting some advice. We can help you work out what options you’ve got available to deal with these debts. Our Debt Remedy tool can help: http://www.stepchange.org/DebtRemedy.aspx.

      Kind regards

      James

  • TB

    I have recently incurred some debt due to unpaid parking fines. I am looking to resolve this (the debt collection agency is Phoenix) and have stated that I am unable to pay the £600 in one payment, but they are refusing to accept a payment plan. Are they allowed to do this?

    • moneyaware

      Hi there,

      They don’t have to accept installment plans for these kind of debts, but many debt collectors are willing to if they can see you’re offering a reasonable amount.

      The powers they’ve got to collect this debt will depend on the kind of traffic penalty they’re collecting. There’s more information on our website: http://www.stepchange.org/Debtinformationandadvice/Typesofdebt/Parkingfines.aspx.

      We can give you advice whatever the type of fine you’re dealing with. I’d suggesting giving our Helpline a call and we can give free and impartial advice: http://www.stepchange.org/Contactus.aspx.

      I hope this helps,

      James

  • John

    Someone used my email address, company name and address to register an account with an online company (let’s call it Company X). Now I’m being sent an invoice of £500 by Company X! I’ve never even heard of Company X before this. And Company X is now refusing to accept my explanation and are threatening me that they will send a collection agency to collect this amount.

    Their words in the email are along the lines of: “… unfortunately we have no proof that this is not you using the account.”

    This is madness. What do I do?! Thank you

    • moneyaware

      Hi John,

      Thanks for posting.

      I’m sorry to hear about this situation.

      As we’re a debt advice charity this topic isn’t our expertise and there are better placed organisations to help you deal with this situation.

      You may find it useful to get in touch with Action Fraud to talk about what’s happened, they should be able to offer you more specific advice:

      http://www.actionfraud.police.uk/fraud_protection/identity_fraud

      Generally, if someone is using your details in a fraudulent way you should let the online company know.

      If your card details have been used you should contact the bank to let them know, and you could also
      get in touch with the police.

      I hope this has helped,

      Jen

  • Megan Henderson

    Hi,
    My mum currently owes someone she was in a relationship around £2500 however this is disputable as some of this was a gift however I have been harassed and so have my neighbours and landlord regarding this debt instead of contacting my mum this person has contacted 6 people she knows, and now this person has apparently sold this debt to another person who is known to be dangerous and who is not part of a debt collection company nor does this person own one? Is this legal? And what powers will this person who has bought this debt have?

    • moneyaware

      Hi Megan,

      Thank you for getting in touch. I’m very sorry to hear about what you and your mum have been dealing with. It sounds like it’s been a very difficult situation for you both.

      I’m concerned about the threatening behaviour you described, and strongly suggest you call the police and let them know you and your mum have been threatened over this debt. While I can’t say for certain what the situation is here, from what you’ve told us I do have concerns that your mum is dealing with a loan shark.

      Loan sharks often prey on financially vulnerable people and put them in positions where they’re unable to pay the debt back in a way that’s reasonable. They will sometimes charge high interest and resort to threats and intimidation to get the money back. The behaviour you’ve described is not acceptable. If there was no credit agreement signed when this person lent your mother the money, then it is not legally enforceable and the person certainly has no right to contact other people and tell them about the situation in what seems to be a threatening way.

      In addition to calling the police, I would also recommend that your mum reports this individual for potential illegal lending and harassing behaviour here – https://www.gov.uk/report-loan-shark

      I hope this helps

      Kind regards

      Rachel

  • Karolina Koszczuk

    4 years ago I had housing benefit and now after all this time they tell me that they over pay me of £2400 and I have pay buck and the cuncil send my details to debet agency and I offer how much I can pay and they set that not enough and I tell them my situation and they set that they will take me to the court . What can I do

    • moneyaware

      Hi Karolina,

      I would suggest giving our Helpline a call and we’ll be able to give you detailed advice about how to deal with this debt and any other debts you might have. Here are our contact details: http://www.stepchange.org/Contactus.aspx.

      It can be hard to come to agreements about payments on these kind of debts but we can help you prepare an income and expenditure budget which will show how much you can afford to offer towards this debt. That will usually help with negotiations.

      We can also give you some suggestions about how to approach the debt collectors and tell you about what the next steps might be.

      Kind regards

      James

  • Claire

    Hi,
    I hope I can get some advice. I attended university (private one in the UK) however I never finished my course and dropped out. I was advice that even though I have dropped out I will still have to pay certain amount to the university. This has also been stated in terms and conditions. I have previously received some letters from the university. Now it seems like they have passed it to debt collection agency (Act Credit Management). I have moved address since I left the university and now I received a letter from debt collection agency to my permanent address in other country.

    What are my options here? Will I be ‘followed’ by the debt collection agency? Can they take me to court in the worst scenario?

    P.S. sorry for too many questions and thanks a mill for your answer!

    • moneyaware

      Hi Claire,

      No need to apologise, we love answering debt questions!

      Debts incurred in the UK can still be collected if you move abroad. The companies have a few option about how they could try to get their money back.

      Here’s some useful information from our main website:

      [i]”If you have UK debts your creditors can still collect these from you, even if you’re living abroad.

      If you have a debt with a bank or collection agency that has branches in countries other than the UK then they’ll find it easier to collect the debt from you if you’re living abroad.

      Your creditor could start court action in the UK by applying for a county court judgment.

      If you live in the European Union they can apply for a European Enforcement Order to collect the debt back from you. A European Enforcement Order lets them transfer the debt to a similar type of court in the country you’re living in, and then this court will then collect the money you owe.

      If you live outside the European Union, and the country you’re in has a reciprocal agreement with the UK, the creditor could apply to have the UK court order enforced in that country, using that country’s legal system.”[/i]

      So the short answer is that they *could* take you to court. In practice it’s usually possible to come to agreements with debt collectors without needing to get the legal system involved. We can give you advice on that.

      There’s more information here: http://www.stepchange.org/LivingoutsidetheUK.aspx Including a phone number to call from outside of the UK if you’d like to talk to an advisor.

      Kind regards

      James

  • Cliffyboy

    Hello. I’m not really in debt and although English, I now live in Australia. Last year in the U.K., I hired a car from Europcar at Heathrow for around five weeks. When I picked it up, I was offered an upgrade and, hand on heart, no mention was made of it costing anything extra. Back home in Aussie, around May, I luckily discovered that Europcar had accessed my credit card without my knowledge/authorisation, and not just the once at that. My credit card provider, Citibank, reversed one of those disputed transactions – over 700 pounds sterling, but Europcar have now sent me, through a solicitor, a demand for that amount, with the threat of further costs, such as court and legal fees, plus even interest. Truly, this upgrade was proffered as if it was complimentary and the documentation I signed I thought was simply standard stuff. Can I do anything about this situation? Are they likely to take action against me here in Australia? I really do need some help and advice with this. Cliff

    • moneyaware

      Hi Cliff,

      It is possible they might try to collect this alleged debt from you, even while you’re living in Australia. Whether it’s likely is very hard to know. Some companies use debt collectors in other countries for these sort of situations, others might be less inclined to follow up if there’s logistical issues with collecting a debt. I’d be guessing if I was to give an answer either way.

      If you’ve signed to accept the charges it might be hard to prove they didn’t tell you about them. However, it’s clearly not a good experience for you, so I’d suggest getting in touch with Europcar and seeing if they can put things right.

      If you don’t have any contact details for your issue then you could use these details: http://www.resolver.co.uk/companies/europcar-complaints/contact-details.

      Kind regards

      James

      • Cliffyboy

        Thank you for replying, James. I appreciate it. As a conciliatory gesture, this afternoon I sent an email to Europcar offering to pay around 350 pounds sterling, so that the matter can be closed, as it is getting me down. What with losing my dear wife to cancer in 2014, this is the last hassle I can do with, as I just want to move forward. Being a 72 year old widower, I don’t have time for this kind of treatment. It will still mean they will have received around double what I’d originally paid for in advance, and, as I’ve said, the ‘upgrade’ was both raised by their employee as if it was complimentary, and absolutely no mention was made of it costing me anything extra, with my signing what I simply and innocently thought was just standard stuff. I’m still amazed that when such things occur, legislation does not compel the company to spell out the extra costs.

  • Matthew Alexander Cuschieri

    Hi, I had lent money to a former landlady and this was never paid off. After taking her to court and winning the judgment she has decided to ignore it and not pay. She is on benefits and I’m thinking of freezing her bank account to recieve the payment. Am I wasting my time? The amount owed to me is of £860 and the enforcement will cost a further £150 to be added onto her bill.

    • moneyaware

      Hi Matthew,

      Apologies for the delay in replying.

      This is a little bit outside of our area of expertise, we usually give advise to those in debt, rather than people who are owed money.

      You may need legal advice to know what options are available. If that’s not possible then you could always contact the court. They can’t provide advice or recommendations but will be able to explain how things work and what you can do.

      Kind regards

      James

  • John Vlg

    Hello , I attended a UK university this past winter but seeing that money was a mere issue I dropped out and I also e-mailed all the responsible offices that I was indeed dropping out as stated by the university.Now , the problem is that I sent an email to the accommodation office to which I never got a reply.The problem here lies that they are asking me to pay 2.000 euros for a period of time that I didn’t live there. Notifications were made and keys were dropped prior to my departure. They still do e-mail me about it even though everything seemed to eb settled with the fee office some time ago.They are threatening to pass that debt to an external debt collection agency.I am from Greece and I do live in Greece.What can be done by them? Thanks in advance and sorry for the long read.

    • moneyaware

      Hi John,

      Here’s some information from our main website out what can happen with UK debts when you live abroad:

      “What can my creditors do if I live abroad?
      If you have UK debts your creditors can still collect these from you, even if you’re living abroad.

      If you have a debt with a bank or collection agency that has branches in countries other than the UK then they’ll find it easier to collect the debt from you if you’re living abroad.

      Your creditor could start court action in the UK by applying for a county court judgment.

      If you live in the European Union they can apply for a European Enforcement Order to collect the debt back from you. A European Enforcement Order lets them transfer the debt to a similar type of court in the country you’re living in, and then this court will then collect the money you owe.

      If you live outside the European Union, and the country you’re in has a reciprocal agreement with the UK, the creditor could apply to have the UK court order enforced in that country, using that country’s legal system.”

      I don’t know how much communication you’ve had with the accommodation office for the university, but I would suggest trying to speak to someone there and explain the situation. That should help you to work out whether you have to repay this money or not. If you find that they are being unhelpful you may want to make a complaint, this can often lead to an investigation and could help you to understand what has happened​.

      There’s more information, plus details of how to contact us from outside of the UK on our website here: https://www.stepchange.org/LivingoutsidetheUK.aspx.

      Kind regards

      James

      • John Vlg

        We exchanged quite a few messages but the thing is that they are asking me for that e-mail I sent them claiming my leave.This e-mail was sent by my university account which is no longer active since I dropped out.They said they are going to pass the debt to an external debt agency .I guess they can’t do much unless they taker it to court which takes a lot of time, enough for me to be able to gather the money.Thanks for the reply and help !Cheers

  • Terry

    Hi I have received various parking tickets to a company which i was director of which is no longer trading. I have tried contacting them advising company is disolved and i personally am going through a step change problem, here is there reply…

    We acknowledge receipt of your recent correspondence and have noted the contents therein.

    We write to advise you that if you are disputing your outstanding debt, you must do so directly with the Local Authority. We have been instructed to collect this Liability Order, and therefore we cannot hold action whilst you make your enquiries.

    Furthermore we also note your comments regarding harassment, however it is not considered to be harassment when we (as agents for the Local Authority) carry out our legal duties in accordance with the law.

    In addition to the above we must advise you that our letter is unrelated to the process we are following, therefore we can only note your intention to contract Trading Standards as they are not a governing body to which we have to adhere to as an Enforcement Agency.

    Your correspondence is therefore noted, but is rejected as irrelevant.

    We have also noted your comments regarding the revocation of license under common law. Prior to 6th April 2014 these notices had already been proved invalid by a case at Norwich County Court in January 2013. In his final summary, the Judge made it clear to the claimant that he had been ill-advised in making his claim to try to prevent the bailiff from carrying out what he was perfectly entitled to do. The court claim failed and the case was dismissed.

    Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 was implemented on 6th April 2014. The Enforcement Agent now has clear authority in statute to attend the premises; therefore the posting of any such notice is a pointless exercise. The Agent does not have an “implied” right of access, he has right of entry given by Parliament that cannot be taken away by any Notice. Consequently, we do not have an obligation to make an appointment to attend the premises.

    We must respectfully suggest that you seek professional legal advice, and we confirm we are continuing action on your case.

    • moneyaware

      Hi Terry,

      Apologies for the delay in replying.

      I’d recommend giving us a call to talk this over. Dealing with Enforcement Agents can be complicated at times, so it’s useful to get in-depth advice and know all your options.

      Here are our contact details: https://www.stepchange.org/Contactus.aspx

      Kind regards

      James

  • James

    I took a company to court for selling me a faulty car. The court ordered them to take the car back and refund me for the car and legal expenses. The director of that company (Lincolnshire Commercials Ltd) resign from the directorship on Companies House and have moved all his assets (run away) from the original location. The bailiff sent by court (which I had to pay for) returned and was unable to collect anything. The Court is saying I am better off letting it go (they have their fees in their pockets).

    The Director of the company is emailing me and being rude by saying “find me if you can”, “would you like your money” etc.. Really unprofessional and mentally disturbed person.

    I have contacted the Companies House Registrar and they are saying they will simply “Dissolve” the company. So the director will get away without being bankrupt or having to pay his debts meaning he can start another company again and carry on trading.

    Not sure what I can do to collect my money?

    • moneyaware

      Hi James,

      I’m really sorry to hear about this situation, it must be very frustrating.

      As a debt advice charity, we help people deal with their debts rather than disputes like this.

      In this situation, I think you’d be better placed seeking legal advice or getting in touch with Citizen’s Advice for help:

      https://www.citizensadvice.org.uk/

      I hope this helps.

      Kind regards,

      Jen