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

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

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county court judgment letters

Received a CCJ? Click to find out more

There are a lot of misconceptions about what creditors (your lenders) can and cannot do. We hear from clients that are scared stiff of bailiffs 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 scare 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.

What can creditors do?

  1. They can chase you for the debt by phone or letters; see our blog 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 still 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, provided that you’re not in a legally binding solution (such as an IVA, DRO, administration order or bankruptcy).
  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 have 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 Office of Fair Trading website.
  2. They cannot break data protection laws, so they cannot speak to your family, friends, neighbours or an employer.
  3. They also 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 can just ignore them (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 now.

Pavan Gata-Aura is a qualified debt advisor with 6 years of experience. She enjoys 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
  • Tracey

    My now ex husband and i seperated in 2010 i continued to pay our joint AA loan but in the end payments got too much and i defaulted to paying my half, i couldnt sustain that either. A debt collection agency got in touch and i offered a minumin payment of £1.00 based on my outgoings. Ive had a letter today saying they will no longer be managing this debt, all future payments and correspondence should go direct to their client. What does this mean Court? Baliffs? 37 weeks pregnant and worried now. Thanks

    • moneyaware

      Hi Tracey,

      Thanks for getting in touch with us.

      A debt collection agency has no more legal powers than the original creditor and are not bailiffs. It’s very common for creditors to pass debts on to third-party debt collection agencies and it will be this company that you now deal with.

      If you’re worried about enforcement agents (bailiffs) then we can help you. As a charity we offer free, impartial and confidential debt advice and solutions on how best to deal with your debts. We can also explain what creditors can and can’t do in more detail and offer you some reassurance.

      You can contact us free of charge by visiting http://www.stepchange.org/contactus.aspx

      I hope this helps,

      Rory

  • fay

    Hired out a van that got a puncher and the hire company is charging me for this. I agreed I could make payments over 3 months. £63 a month. I have paid all but the last month of £63 and this is due to my partner losing his job so not got money to pay. They have called me today and emailed me saying the below

    “Good Afternoon
    As per my email below the final payment of 62.33GBP was due 19th July and I cannot trace receiving this. Can you please
    confirm payment has been made by return?

    I cannot trace a reply to the email below and I have also been unable to
    contact you by phone. I must now advise that if I do not
    receive a call back or payment by 5:30pm tomorrow 5th August the file will be passed to debt collectors and this could have adverse effects on your credit rating.”

    If this goes to the debt collector will I be sent a letter first as I have never had a letter from them only emails. Also worried about them adding charges. I have never signed an agreement only emails. Can they do this?

    Please advise

    • moneyaware

      Hi Fay,

      Usually when a debt is transferred to a debt collector you will receive notification from the original company you owed and then also be contacted by the debt collector.

      Usually it’s best to try and avoid having your debts passed around, unless it’s not possible to get a reasonable agreement in place with the original company.

      I’d suggest contact the company and explaining the difficulty you’ve had lately with your partner losing his job. Hopefully they’d be willing to consider a reduced payment plan or maybe give you some time to put together an arrangement.

      If you contact them and aren’t able to get something reasonable arranged then I’d recommend giving our helpline a call on 0800 138 1111 (Mon-Fri 8am-8pm & Sat 8am-4pm).

      Kind regards

      James

  • Marcus

    My partner’s mother racked up a debt in my partner’s name (without prior permission to do so) and has since been getting letters from Lowell’s. This began in June, it is now August. For some reason, despite her Mother fessing up on the phone to the debt collectors about it being her that should be paying the debt and therefore being the one chased up, they won’t change the details of the case so that the debt is then registered in my partner’s mother’s name. I don’t know why they can’t do this, and as we’d really like to avoid involving the cops is there any way we can get the debt collection agency to actually reconsider changing the details of the case that her mother is the one paying the debt, not my partner? We cannot afford this, because we rent privately it puts us right in the shit, and to say I’m less than happy with her mother is an understatement. Thanks for any advice or help you might be able to provide.

    • moneyaware

      Hi Marcus,

      Taking out a debt in someone else’s name is fraud and you would need to report this if you weren’t liable to repay the debt.

      It’s unlikely that Lowell will change the ownership of the debt if you have admitted that you weren’t reporting this as fraudulent activity.

      If your partner’s mother was able to repay the debt then you could arrange this between yourselves. If you’ve been left with the debt to repay and find yourselves struggling then you can call us or use our free, anonymous online Debt Remedy tool available at http://www.stepchange.org/debtremedy.aspx.

      To speak to us, please visit http://www.stepchange.org/contactus.aspx
      I hope this helps,
      Rory

      • Marcus

        Hopefully managed to resolve this issue, minus having to report it to the cops. I got in touch with the company to whom the debt was originally owed to tell them that the account had been set up fraudulently, and the guy I spoke to said he’d speak to my partner’s mother, which did happen. He then said he was going to send out some sort of paperwork for her mother to sign and return making the debt her responsibility.
        I seriously doubt that she will, but I hope she does, because if she doesn’t then I shall have no possible alternative other than to report it as a fraud.

        Hopefully this will get resolved with the tiniest amount of hassle, but I haven’t got my hopes up :/

        Thanks for the reply though Rory!

  • moneyaware

    Hi Fezzy

    Thanks for contacting us.

    Sorry to hear about the situation with the university fees, it sounds like it’s been quite difficult. The situation is quite complicated so I would recommend you give us a ring for all of the advice you need.

    Details of how to contact us are available at http://www.stepchange.org/contactus.aspx

    I hope this helps, we look forward to speaking to you soon.

    Rory

  • Charles

    I went to a Ppi claims company to help with getting my PPi claim. After a week I spoke to a friend who advised me to do it myself so I get 100% of my money. I called to cancel and was told it was fine as I was in my 14 day cancellation. 7 months later I received a letter from the Ppi company telling me I owe £1770 as I got a payout. I explained I cancelled and went through the Ppi myself and now they are saying I owe them. I don’t understand how they could not contact me for 7 months if I didn’t cancel. Also I called my bank who have said that the Ppi company have never called to do a claim on my behalf. Now I have received a letter a year later saying my account has been passed to Westminister securities & trust. When I called the man was saying his company has the power to force and bankrupt me that’s why companies use his company. He told me to look at his website which is http://www.debtuk.info/

    Can you please help and let me knows options.

  • Gary

    Hi How are you?? i’m wondering, i have a lot of debts and some have been handed over to debt companies – loans etc, when i informed them that i had moved house one company (welcome finance) said they had no record of the debt although i know i have the debt and the account numbers are right. i was told by someone that if you ask whoever you owe money to (regardless even if you know you owe it) to provide a copy / proof of the original signed contract and they cant then the debt is now null and void – even if you know and have been paying it they still need to provide proof. (i dont have any of my original contracts for any of my debts)

    • moneyaware

      Hi Gary,

      I’m fine thank you, and thanks for your message.

      Under the Consumer Credit Act, if you ask your creditors to
      send you a copy of the original signed document they should
      send it to you. Your creditor shouldn’t be able to chase the debt until they’ve sent you this information. That does not mean the debt will be written off.

      I’d suggest using this template letter to contact your
      creditors:
      http://moneyawarecouk.c.presscdn.com/wp-content/uploads/StepChange-Debt-Charity-Right-to-information-request.pdf

      You’ll also have to send them a £1 fee.

      But remember, debts should never be avoided deliberately, we always say it’s best to deal with your debts as fairly and as realistically as possible. If you’re struggling to make repayments, I’d suggest getting in touch with us so we can help you put together a personal action plan to help you deal with your debts. You can do this using our online Debt Remedy tool http://www.stepchange.org/Debtremedy.aspx

      or by calling our advisors on 0800 138 1111 (free to phone from landlines and most UK mobiles). We’re open from Monday to Friday from 8am until 8pm, and Saturdays from 8am until 4pm.

      I hope this helps,

      Laura

      • Gary

        thx Laura, basically i cant afford to pay them back -long story to short. job situtaion changed and earn less, divorced father with x and 3 kids to pay for and still single paying own bills. every penny of my money is spent…fixed salary and no ovetime or any extra income..the simple fact is i earn what i earn and i pay them all £1 a month. i have told them to declare me bankrupt – they havent (i cant as i dont have the money to do it as its only rich people with money who can affored it -stupidly enough :) ) and all i get is hassle and threats especialy from first credit who send me constant leters and when i complained they then came from connaught collections which is the same company. i dont and will never be able to afford it but nobody cares and just keep hassling me. i cant even afford a flat / house of my own to rent and have to rent with other people so i just dont know where these people expect me to get the money so even you guys cant help me :) atleast i have a thicker skin with them now and tell them to get lost and take me to court (still pay my pound) might not be right and its still a depressing life but its better than letting them get me down all the thoughts i have in my head are of suicide. i cant give them what i dont have and everything of nothing is still nothing.

      • Gary

        oohh thanks for the letter templete

      • moneyaware

        Hi Gary,

        I’m sorry to hear about your circumstances
        and that you’re feeling depressed. Please remember that there’s always a way to make your financial situation more manageable and we are here to help you.

        Our advisors are friendly, professional and
        non-judgemental. They’ll be able to go through your circumstances in more detail, come up with a personalised budget and work out the best solution for you to deal with your debts. We offer a wide
        range of debt solutions (http://www.stepchange.org/Debtinformationandadvice/Debtsolutions.aspx) and although you’ve considered bankruptcy, this isn’t necessarily your best or only option.

        You can contact our advisors on 0800 138 1111 – this is our free helpline which is open from Monday to Friday 8am to 8pm and Saturdays 8am to 4pm.

        As you’re having suicidal thoughts, you might like to turn to someone in confidence to talk about how you’re feeling. Samaritans have a helpline which is open 24 hours a day, and you can call them on 08457 90 90 90 or email them at jo@samaritans.org

        I hope this helps,

        Laura

  • Ferdinard Lucas

    Hello Every
    One, My Name is FERDINARD LUCAS i live in USA FLORIDA and life is worth
    living comfortably for me and my family now and i really have never seen
    goodness shown to me this much in my life as i am a struggling dad with
    four kids and i have been going through a serious problem as my son
    encountered a terrible accident last weeks, and the doctors states that
    he needs to undergo a delicate surgery for him to be able to walk again
    and i could not afford the bill for his surgery then i went to the bank
    for a loan and they turn me down stating that i have no credit card,
    from there i run to my father and he was not able to help, then when i
    was browsing through yahoo answers and i came across a loan lender MR
    BUHARI DANGOTE who provides loans at an affordable interest rate and i
    have been hearing about so many scams on the internet but at this my
    desperate situation, i had no choice than to give it an attempt and
    surprisingly it was all like a dream, i received a loan of $400,000 USD
    and i payed for my son surgery and thank GOD today he is okay and can
    walk and is working and the burden is no longer so much on me any more
    and we can feed well and my family is happy today and i said to my self
    that i will shout aloud to the world of the wonders of GOD to me through
    this GOD fearing lender MR BUHARI DANGOTE and i will advise anyone in
    genuine and serious need of loan to contact this GOD fearing man via
    email=buhariloanfirm@aol.com OR call him online=+2348157905793 and i
    want you all to pray for this man for me.

    THANKS

    FERDINARD LUCAS

  • donna

    Hi I was stupid enough to act as a guaranteer for my partners sister who defaulted the loan I came up with a payment plan of 50 pounds a month and stuck to this last month however i was in hospital after having a missed miscarriage and with everything going on forgot to pay i got a letter through last week saying if I didn’t pay the full amount ov the loan by the 13th bailiffs would come to my home I rang the creditor up and explained my situation and they said if I paid the missed payment plus this months they would contact there solicitors and call it off so I did pay but I’m still really worried can u help me please

    • moneyaware

      Hi Donna,

      Bailiffs would only be send to collect on a debt if a debt has already gone through court and it doesn’t sound like this debt has.

      Quite often debt collection letters are written in a way to make the situation sound worse than it usually is. They don’t lie but they’ll use expressions like “could lead to bailiffs being sent” which don’t explain that they have to follow a process before they get those powers.

      It’s hard to give detailed advice over a forum, so I’d suggest giving our helpline a call (contact details here: http://www.stepchange.org/Contactus.aspx). Our advisors will be able to ask you a couple of questions and I expect your mind will be set at ease by the end of the phone call. If there are any things that need dealing with we’ll be able to give you free and impartial guidance on how to sort them out.

      Kind regards

      James

  • michelle

    Can a creditor take you wages off you then give you money back to live on

  • Marcus

    I’m curious as to how this panned out – don’t suppose you’d be able to tell me how it went? I’m having a bad time with my uni and that’s because sfe haven’t even processed my claim since last year!

  • Lisa

    Hi I have started a dmp with stepchange and was just wondering can I still upgrade my phone while on the dmp

    • moneyaware

      Hi Lisa,

      Thanks for getting in touch.

      There’s no specific answer in this situation as it can depend on your circumstances and individual situation.

      Before making any decisions, you could talk to us about what your options are by visiting http://www.stepchange.org/contactus.aspx

      Hope this helps,

      Rory

  • moneyaware

    Hi Shorif

    Thanks for contacting us.

    The type of debt will determine what the creditors can and can’t do in this situation.

    As you’ve not given any details about what the debt collectors are visiting for and whether this relates to the car specifically then I think the best thing to do is to contact us.

    Once we’ve had a chat with you we’ll be able to explain how to deal with the debt and offer further advice. You can contact us by visiting http://www.stepchange.org/contactus.aspx

    We look forward to talking to you.

    Rory

  • Gerald Drabble

    hi,can you clarify the position for me please in regard to a company such as Merliglen,purchasing debts. I have 2 entries on my credit file for the same debt, but with 2 different companies, Am i still liable for the original amount or under contract law,am i able to sign a new contract with them for the amount they purchased the debt for.

    • moneyaware

      Hi Gerald,

      Thanks for posting.

      It’s really common for debts to be passed onto a third-party debt collection companies. You’re still only liable for the original balance and the agency can’t add any further interest and charges that aren’t included in the original agreement. Sometimes both debts will show on your credit report, although this is usually temporary. It’s the responsibility of the creditor to remove the duplicates for you if this causes any problems. As the article mentions, the debt collection agency doesn’t have any more legal rights than the original creditor and it just means that you make payments to the new company now.

      Hope this is helpful for you,

      Rory

  • Stacey

    Hi I was 1 day late on paying the remaining balance of a new kitchen. I’ve just received a letter saying it has gone to redwood debt collection agency and I have already posted the cheque to the kitchen company. They have added a further £350 to the bill. Is there anything I can do ?

    • moneyaware

      Hi Stacey,

      Thanks for contacting us.

      It might be a good idea to speak to the original company and explain the situation to them. You could also ask for a breakdown of the charges on the account to find out why the third party debt collection agency has added this charge onto the balance.

      Hope this helps,

      Rory

  • Jen

    I recommend reading this book titled “How To Remove All Negative Items From Your Credit Report For Free” By Riki Roash. Very helpful information in there regarding collection agencies and so forth. Very cheap on amazon.com.

  • moneyaware

    Hi Lizzie,

    It’s no bother at all. We’re glad to help out however we can!

    If you’re unsure of when the last payment was made on these debts but suspect that they are statute barred, all you need to do is send the creditors a statute barred letter requesting proof of the last payment that you made.

    All creditors have a duty to provide proof of payment once requested. If they continue to pursue payment without providing this proof in writing, you can then make a complaint to the Financial Ombudsman.

    A copy of the statute barred letter can be found here: http://moneyawarecouk.c.presscdn.com/wp-content/uploads/Statute-barred-template-letter1.pdf

    Hope this helps

    Best regards

    Rachel

  • amanda

    Hi Laura,

    thanks for the info.. the letter i received yesterday
    was the first i have heard about any CCJ. The debt is 10 years old and i
    have never paid anything and i can assure th the ex had not either.
    surely
    after his long i can not be made to pay it..?? also why do i have to
    pay the whole lot when it was a joint bank account.??
    Amanda

  • DW

    Hi all, I am new to the community but have something very strange going on.

    So first a backstory. I grew up with no financial disipline, from 14 I
    would work an illegal number of hours whilst in education and in turn,
    had lots of money with no responsibilities. So when I hit 18 and my
    addiction for spending went crazy I took out a credit card £500, rang up
    ridiculous charges on a current account £2400ish, charges on another
    account £300, Two contract phones £700…

    Now I was one of those people who really did contribute to why it is so
    difficult to get credit now days, I paid nothing back. I went through a
    long stage on immaturity for a following 4 odd years and took up various
    vices on my finances – over spending, gambling etc… but after I was
    22 I went to university, found some responsibility, spent what I had and
    no more (mostly because I had no borrowing power) but sorted myself
    out.

    I have now finished University (with a first I might add), have learnt a
    small obsession with savings, noting all money I spend and enjoying the
    daily challenging of saving even just 3p on an item – it is addictive
    right?

    So now I have been in employment after uni and my life is different, I
    today felt that it was time to put things right and settle the debts –
    then I could take the 6 year walk to waiting to be able to borrow,
    improve the rating and then get a mortgage. However…..

    I opened up a 30 day free trial of experian, sat on the edge of my seat,
    a box of tissues next to me to dry the tears that were about to brace
    my cheeks but instead of tears, I was faced with confusion.

    On this trial, there was no evidence of any debts at all, now these are
    all debts from 8 years ago, the youngest debt possible 6 and a half
    years old but I still owe the money so where are they? It says my score
    is fair (774) with my only real negative is not being on the electoral
    roll, I will do it, just moved flats so much at universtiy, it slipped
    my mind.

    It does have a small £200.00 default on there from an unpaid overdraft
    (this is the one that is about 6 years ago) but it says that it is
    settled – now I know some people sleep walk, and sleep eat, but there is
    no way I would not know about sleep-paying-off debts.

    Now a part of me wants to believe that there is a debt fairy but is it
    due to the likely occurance that the experian free tiral only paints a
    half picture, and I need to be a paying customer?

    I hope I haven’t bored you all or destroyed the sould of all those
    grammar nazi’s out there with my poor keyboard-mans-ship but any advice
    will be greatly appreciated – I am keeping my fingers crossed for the
    debt fairy though – I will take that as a reward for sorting myself out -
    you know, how bad people get rewarded for not doing bad but good people
    get nothing for their consistent good-doing, that is how our society
    works isn’t it..

    Thank you all

    • moneyaware

      Hi DW,

      Thanks for posting.

      Despite lots of myths around ‘blacklisting’ on your credit report, nothing will show permanently and eventually these items will not show on your credit file any longer.

      Usually 6 years is the longest time an item would show on your credit report however this varies depending on what action has been taken.

      Even if the debt isn’t showing on your credit report then our advice would be to repay the money you owe as it’s only fair. You can contact the creditor for more information on how to do this.

      If you’re worried or struggling with debt then you can call our free helpline by visiting our website at http://www.stepchange.org/contactus.aspx

      Hope that helps,

      Rory