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.

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
  • CJ Fool

    Hi there

    I got into debt with Vodafone quite a bit and I rang them up making an agreement of paying £100 a month I have reference number of the agreement, now a debt collection agency are chasing me for money because apparently I haven’t paid by money to them when I have.

    I got proof such as bank statements and a letter from Vodafone clearly stating tht £100 came of the amount due at that time but the debt collection agency still claiming I haven’t paid anything what can I do?

    • moneyaware

      Hi CJ,

      If the payments were going straight to Vodafone then I’d recommend speaking to them. They’ll be able to confirm if your £100 payments have been applied to your accoutn and give you more information about why the debt has been passed to a debt collector.

      Vodafone are allowed to pass the debt to a debt collection company even if an agreement to deal with the debt was in place. This isn’t usually what happens though, so it may be worth checking with them to work out what’s gone on.

      Kind regards

      James

  • Angela Gofton

    We have a large loan secured on our property, the debt was sold to a debt collection agency, we have been making regular payments. We recently received a letter from them asking us to contact them within 7 days of date of letter , other wise, an agent from an outside field would contact our home, my husband contacted them within the seven days, but we also received a letter within the 7 days from the outside agent saying they had been asked to visit us, and to ring them to make an appointment, we didn’t as, I said my husband contacted the debt agency. Today, the outside field agent turned up on our door step, I refused her entry, do they have this right , if we contacted the debt agency within 7 days as stated? The agent gave us a letter, saying they would come back, where do we stand please?

    • moneyaware

      Hi Angela,

      Thanks for your message and I’m sorry to hear about your situation.

      It isn’t uncommon for debt collection agencies to send letters telling you they’ll send someone round to your property, but actually sending someone to your property is usually something they would do only if they haven’t been able to come to an agreement with you by other means.

      The person who visited your home is likely to be either a doorstep debt collector or a bailiff, but as you haven’t mentioned that your creditor has taken you to court to recover the debt, it’s more likely to be a doorstep debt collector.

      Doorstep debt collectors are sent by debt collection companies, and don’t have any special legal powers to make you pay the debt. They have the same powers as someone would have over the phone or by letter to make you pay. A doorstep lender cannot come into your home unless invited, and cannot remove any goods You can read more about doorstep debt collectors and what they can and can’t do here: http://www.stepchange.org/Debtinformationandadvice/Whatyourcreditorscando/Homevisits.aspx

      On the other hand, bailiffs are usually sent after a creditor takes legal action to recover the money, and only if the creditor still hasn’t received payments towards the debt. You can read a bit more about bailiffs here: http://www.stepchange.org/Debtinformationandadvice/Whatyourcreditorscando/Courtaction/EnglandWalescourtaction/Bailiffs.aspx

      If you’re not sure whether your creditor has taken legal action against you, this is something you can check on your credit file. You can access your credit file for free using Noddle: http://www.noddle.co.uk.

      If you believe the person who came to your house was a doorstep debt collector, I’d suggest you speak to your creditor to make a reasonable offer of payment towards the debt. This is something we can advise you on for free. We have over 20 years’ experience in giving debt advice and helping people put together accurate budgets, and often creditors will be more willing to accept an offer of payment if they can see you have sought professional advice.

      We can have a chat with you in more depth about your financial situation, put together a budget and recommend a reasonable payment that you can offer your creditor. We can also talk you through any debt solutions which might be suitable for your situation, or how else we might be able to help you to deal with the debt.

      You can find out how to contact us here: http://www.stepchange.org/Contactus.aspx

      I hope this helps.

      Kind regards,
      Laura

  • Linda C

    Hi, I received a letter from a debt collection agency for council tax. They asked for £1110 and I offered to pay £95 per month. They told me they wanted a list showing incoming/outgoing of my finances. I refused and told them I didn’t think they had the right to do that and was contacting the CAB, they then sent me an invoice for £660. This was a big drop. This was a few weeks ago and I have had to work longer hours and never got round to going to the CAB. However, today my neighbour told me a man came to their door and was asking questions about me. If I lived next door, did I work and so forth. It turns out it was a debt collector from this company and they have put a letter through the door asking for £780! What is going on here? If I offer a payment can they still demand an income/outgoing list and I didn’t think with Data Protection they could go to neighbours asking questions about me. What are my options here please. I’m really angry at involving neighbours and they obviously added on money they weren’t entitled to originally? Worried sick now!

    • moneyaware

      Hi Linda,

      Thanks for your message and I’m sorry to hear about your
      situation.

      Councils are notoriously firm when it comes to collecting council tax debt. However, it’s not against the law for them to send someone to your property and asking your neighbours general questions about you is unlikely to be a breach of the Data Protection Act.

      If you’d like to make a monthly payment and they have asked to
      see details of your income and outgoings, we would generally suggest you give them this information. You don’t have to provide this information and they can’t make you do so, but in order for them to accept £95 per month towards the debt, they usually like to see that this is genuinely all you can afford to pay
      them back.

      Council tax debt is what we would class as a priority debt, because the consequences of not paying it back can be serious. If it’s not paid back, the council can apply for a Liability Order, which would give them extra legal powers to recover the money. This might be sending bailiffs, applying for an attachment of earnings order so that the money is taken from your wage or
      benefits at source, or even applying for a charging order to secure the debt against any property you own.

      It’s important that this is resolved sooner rather than later,
      so I’d suggest you get in touch with us for free debt advice. We have over 20 years of experience putting together budgets for our clients, and can recommend an affordable and sustainable offer of payment that you can make to your council, along with a budget that will give them a better understanding of your situation.

      You can find out how to contact us here: http://www.stepchange.org/Contactus.aspx

      I hope this helps.

      Kind regards,
      Laura

  • Nic Cuddly Bear Hawkins

    Can a company sell on a debt if it is listed on a DRO

    • moneyaware

      Hi Nic,

      Thanks for your message. It’s not something we’ve heard happens very much, so I’d suggest you get in touch with the original creditor and speak to them about the situation.

      I hope this helps,

      Kind regards,

      Laura

  • disqus_DKS1Z7IJDd

    hi there, my partner had an outstanding debt for an unpaid parking ticket which escalated to £300 pounds. he paid the amount off in full but a week later an enforcement agent turned upa t our door saying he still owed £422 (originally less but the amount had increased due to fees etc) on a different debt. he was completely unaware of this other outstanding fine as he had had no correspondence for it. he rang the debt collection company who told him that he had rang them weeks ago and talked to them about that case. he then explained that because he was not aware of that debt when he had rang previously he thought he was discussing the other debt (the £300 one). they told him that he was still liable for the outstanding amount p;uss fees regardless of whether he knew about it or not.
    surely this cant be legal? if he wasnt aware of a debt and thought he was discussing the one he was aware of then surely they cant charge himt he increased amount?
    worried, please help!
    Many thanks.

    • moneyaware

      Hi there, thank you for getting in touch.

      I’m very sorry to hear about the difficulties you’ve been facing.
      It might be best to put your complaint to the collection company in writing and explain your version of events. Send this as recorded delivery to the company.

      If you don’t feel that the company is dealing with the complaint properly, you may also be able to complain to the bailiff’s trade
      association. Check if the company in question is listed on one of these trade associations’ websites and follow the complaints procedure listed there:

      Civil Enforcement Association – member list: http://www.civea.co.uk/member-list.htm

      High Court Enforcement Officers Association – directory: http://www.hceoa.org.uk/members/authorised-members-directory.html

      In the meantime, please keep all of your doors and windows locked in order to prevent an enforcement agent getting access to your property.

      If it turns out that you’re liable for this debt this company is collecting for, we can help you structure your budget so you can manage the payments you will need to make towards this balance.

      Our Debt Remedy advice tool can help you build a budget and explore available debt solutions in just 20 minutes: http://www.stepchange.org/Debtremedy.aspx

      Alternatively, our Helpline is open 8am to 8pm Mon to Fri and sat
      8am to 4pm and can be reached on 0800 138 111 (free from landlines and
      mobiles).

      Kind regards

      Rachel

    • moneyaware

      Hello,

      This does sound like an odd sitaution. I think it’s reasonable that your partner gets some sort of details about this debt before he comes to any arrangement about it.

      The enforcement agent should be able to give some background about where this debt originated and what it relates to.

      Once your partner knows more about what this debt is he can look into whether it’s something he should pay back or appeal if there were circumstances that mean he shouldn’t pay it back.

      There should have been correspondence about this debt before it was passed to enforcement agents, so it sounds like something might have gone wrong somewhere. Occasionally letters go missing in the post but it’s unlikely several letters sent at different times would go astray.

      Kind regards

      James

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  • ttf

    Hi I am having to leave the country with very short notice and I have around £8k debt between about 3 credit cards I obviously am not in the position to pay them off right away and my intention is to pay what I can but if I default will they be able to track me down? I will be changing my address to a family members address as a forwarding address for my current accounts etc would it mean that they will hassle my family member? The problem being I don’t have a new job in south Africa as yet and I am really concerned I don’t want to tell them I am leaving just in case I end up coming back in a few months please let me know my rights? Can they issue a CCJ even if im not in the UK and they are not aware

    • moneyaware

      Hello,

      If you go abroad then it’s possible that your creditors may track you down in your new country. It’s hard to say whether this would happen in practice but we’d not recommend ignoring debts in this sitaution.

      If your adderss is changed to a family member’s then they won’t be able to hassle the family living there but they will obviously correspond with you at that address and use their debt collection process (see above article for more information).

      From the creditor’s perspective, if you tell them you live at this family member’s house then they’ll work on that basis. This means they could start CCJ proceedings against you at that property as you’ll fall within the court’s jurisdiction.

      You may find it useful to give them your new address in South Africa once you’re settled, as you’ll then know more about what’s going on with the account.

      Kind regards

      James

  • NG

    Good Morning,

    I got divorced a number of years ago whilst living in Dubai and my wife was living in the UK. On our divorce paperwork it stated that my wife would have the UK property and I would have the Dubai property. Since the divorce my wife defaulted on the mortgage and didn’t tell me.

    I have just done a credit check report and it shows that I have a CCJ for £8,700 pound which was from a debt recovery company. The mortgage was in both our names so I can only assume that the mortgage company sold the property and then the remaining balance was split between my wife and I. The CCJ is just over 3 years old.

    Where do I stand regarding this CCJ? Was my wife liable for this debt as she got the UK property in our divorce? Any other advice?

    Regards,

    • moneyaware

      Hi NG,

      Divorce proceedings aren’t something we’re able to
      offer advice on, but generally when a debt is in joint names (such as a mortgage or loan agreement) there is ‘joint and several liability’ for the debt. This means that you both you and your previous partner would be jointly responsible for the debt.

      As far as we’re aware, this is also be the case even after a divorce agreement as it’s unlikely that the mortgage company will remove the other person from the agreement. However I think it would be a good idea to seek legal advice on this to be sure that this is the case in your situation.

      I hope this helps, sorry we weren’t able to offer more detailed advice in this situation.

      Rory

  • Martin Buckley

    Hi,

    I have been registered partially sighted ever since I left school in 1989 and a few years back I opted to claim the disabled element of Working Tax Credit as I was led to believe that i was allowed to claim it.

    I filled all the forms in and sent them off and the DWP called me and told me that I was able to claim the above and ever since about 3 years ago (a short while after the Tory Government got in) I have been denied this WTC because apparently I am/was no longer disabled!

    My eye sight will NEVER get better and it is a documented permanent condition but according to the DWP I now owe them over £4000 in over
    payment.

    About a month ago I started receiving letters and phone calls from Rossendale’s debt recovery agency and I supplied them also with the
    documented medical evidence that I am blind in one eye and it will never
    improve but they still continue to hound me for the back pay.

    I have tried to speak with the DWP and actually got nowhere,

    I am running out of patience, can anyone help me?

    I work full time and I pay my taxes as I am supposed to do but my question is – is this legal? Can they really reclaim money from me that is legally mine? Is it my fault that they got their sums wrong?

    Any help is very much appreciated.

    I am led to believe that unless I have been served with a court rit or been found guilty in a court of law then there is nothing that they can do?

    Thank you for reading and I look forward to any feedback from
    you nice people.

    • moneyaware

      Hi Martin,

      Thank you for your message.

      I’m sorry to hear about this situation, it must be very stressful and frustrating to deal with.

      As a debt advice charity our expertise is in helping people pay back what they owe. As you’re disputing
      that you owe this debt, we’d suggest getting in touch with your local Citizen’s Advice Bureau for further assistance.

      You might find it useful to read this page on their website:

      https://www.citizensadvice.org.uk/benefits/benefits-introduction/problems-with-benefits-and-tax-credits/benefit-overpayments/

      If it turns out you do need to repay the debt and are worried about how it’ll affect you financially, this is where we can help.

      If you give our Helpline a call one of our advisors will help you put together sustainable budget and can recommend any debt solutions that may be available to you. You can find out how to get in touch with us here:

      http://www.stepchange.org/Contactus.aspx

      I hope this helps,

      Jen

  • Adam Andrews

    Hi i currently owe a company £115 in subscription fees and i am unable to pay it. They are now threatening to pass this on to a debt collectors and take legal action. How likely is it that they are just bluffing

    • moneyaware

      Hi Adam,

      It’s impossible to say really. It’s possible that this company could involve debt collectors or legal action if you owe them money. Usually this is something they’d do only after trying to come to an arrangement directly with you.

      So it’s often possible to avoid this sort of thing by coming to an arrangement to reply the debts. If you can’t pay the £115 in one go then you could offer to repay in installments.

      We can help you work out an affordable amount to offer them and give advice about your finances overrall. You can do this using our online advice tool, Debt Remedy (http://www.stepchange.org/DebtRemedy.aspx) or by calling our Helpline (http://www.stepchange.org/Contactus.aspx).

      Kind regards

      James

  • Adnan

    Uninsured vehicle allegations
    Court has deducted £300 from my salary without my permission or notifying me all I got is one letter stating we will take money from your employer. In fact I never drive any car in insured but I am told I was in Posession of car in 2013. Come one you are deducting something from my pay after two years and I have never even been notified or proven guilty. Is my employer suppose to tell me what they are going to pay someone without my consent
    Many thanks
    Adnan

    • moneyaware

      Hi Adnan,

      This does sound very unusual. Usually there would be quite a lot of correspondence about a debt before it got to the stage where payments were deducted from your income.

      You might find it useful to speak with the payroll department at work and ask them for more information. They can also tell you why they didn’t notify you of the deduction sooner.

      The first thing to do when trying to sort out this situation is gather information about what’s gone on, which is what you’re doing now. Once you know more about what’s going on you can look to see what options you’ve got to contest the decisions the courts have made.

      You can call us up for advice on how to deal with your finances now you’re on a much reduced income. Our helpline contact details are here: http://www.stepchange.org/Contactus.aspx. We can give you free and impartial advice about your finances.

      Kind regards

      James

  • Gb Fam

    I received a letter from “Pastdue” a debt recovery agency saying that I owe Talk Talk £373.60. I haven’t been with Talk Talk in over 3 years and I’m not even entirely sure if I even owed them money… Definitely not £373.60 anyway. The first line says “We have been appointed by Jefferson Capital International owned Talk Talk to recover the account balance of £373.60”

    I’m 21, I don’t have £373.60 lying around to pay a debt I never knew existed and certain I don’t owe. What can I do?

    Also it says on the letter “Administration Fee : £1,007,569,858.00” What is this to do with? At first I thought they said I owed them that and was certain it was a scam but checked on google and apparently “Pastdue” are an actual company. Why are they putting a sum of over 1 billion pound on my letter? I really don’t get it. Help would be greatly appreciated.

    • moneyaware

      Hi there,

      Thanks for your message and I’m sorry to hear about your situation. It sounds as though your debt has been passed on to a debt collection agency, which is a standard part of the process a creditor will follow when a debt isn’t paid.

      You mention you had an account with Talk Talk three years ago,
      but don’t think you owed them as much as they claim you do. It’s common for creditors to add clauses to their contracts with customers that allow them to add fees and charges if payments aren’t made, so it could be that you originally owed a smaller amount of money but this has increased over time. With regards to the billion pound admin fee, that’d be extreme by any stretch of the imagination so it’s likely that it’s an error!

      I’d suggest you write to Pastdue to ask them for information
      about the debt, as this will give you a better idea of what the debt is for and whether any fees or charges have been added. We have a template letter which you might find useful to use as a guide: http://moneyawarecouk.c.presscdn.com/wp-content/uploads/StepChange-Debt-Charity-Right-to-information-request.pdf

      If you recognise the debt as being yours, our position as a charity is that you should take reasonable steps to deal with it. Should it
      turn out that you owe the money and will struggle to pay it back, this is something we can help you with. We can have a chat with you in more detail about your financial situation, put together a budget and recommend the best way for you to deal with your debt. We have over 20 years of experience giving free and impartial debt advice to people in similar situations to yours. You
      can read a bit more about the services we offer here: https://www.stepchange.org/Howwecanhelpyou.aspx

      Should you need to get in touch with us, you can find our contact details here: https://www.stepchange.org/Contactus.aspx

      I hope this helps.

      Kind regards,
      Laura

  • Lorett Cannas

    Hi
    ive tried to get a loan and rejected. I have paid to get my credit checked and it appears that there is an unpaid catalogue payment that my daughter took out in my name that has been passed onto a collection agency.
    I have contacted them and they have said I need to contact the police for fraud. obviously I dont want to do that.
    The items purchased came to around £70.00 but with interest and charges the debt stands at £393.00. is there any way I could get the charges reduced or removed?

    • moneyaware

      Hi Lorett,

      Thanks for your message and I’m sorry to hear about your
      situation.

      If your daughter took out the debt in your name without your
      knowledge, then this could be classed as fraudulent. It’s understandable that you may not wish to report it as fraud, but if this is the case then you’d be responsible for ensuring the debt is dealt with.

      Creditors often add fees and charges if payments aren’t made to
      a debt, and they’re allowed to do this in line with the agreement they have with you. You could contact the creditor to explain the situation and ask if they would consider reducing the added fees and charges, but they’re not obliged to do this.

      If it turns out that you have to pay the full debt back and you’re worried about the impact this could have on your finances, I’d suggest you get in touch with us for free debt advice. We’ll be able to have a chat with you in more detail about your financial situation, put together a budget, and recommend the best way for you to deal with the debt. You can read a bit more about how we can help you here: http://www.stepchange.org/Howwecanhelpyou.aspx

      Should you need to contact us, you can find out how to get in
      touch here: http://www.stepchange.org/Contactus.aspx

      I hope this helps.

      Kind regards,

      Laura

  • James cooke

    Hi its just come to my attention by checking my credit score that I apparently owe about £8000 to a car finance company that I was with over 4 years ago before my car got repossessed. I was told at the time that I wouldn’t have to pay anything as the car would be sold at auction and the money retrieved that way. I’ve been in contact with them today to get them to send all paperwork out to me so I can go through it and see what I signed or if they have anything I did sign. I’ve not heard anything from them for over 3 years until I got intouch with them myself today. Is there anything I can do to not pay this. Thanks.

    • moneyaware

      Hi James,

      Asking for details of the debt first is a good step in this sort of situation. Until you see exactly why they think you owe them this money it’s hard to know what’s gone on.

      It may be that they did sell the car but there was still a debt left on the account and for some reason they’ve not been able to contact yu to tell you about it for all these years.

      When you get the information it should be possible to piece together what’s gone on and find out if you do owe money. It’s worth challenging anything that doesn’t look right. You can make a complaint to the company and if they don’t resolve the complaint to your satisfaction you can ask the Financial Ombudsman to investigate.

      If it turns out that you do owe some money from this debt then I’d recommend contacting us for debt advice. There’s details of how to get in touch here: http://www.stepchange.org/Contactus.aspx. But I’d wait until you’re sure you do owe them money before starting to repay.

      Kind regards

      James

  • mary burke

    Hi there I had initially set up a direct debit with nursing accommodation that been staying in on a monthly basis, but they never took the payments from my bank account, that was for two years, initially the first two payments came out and then stopped. They brought this to my intention last year so a reset up my direct debit and they still havent taken out any money. They keep emailling me but dont have my current address what can they don they have mentioned passing this on to the central.legal office. The amount owed is 4000 which I obviously dont have up front.

    • moneyaware

      Hi Mary,

      We’d suggest speaking to the collection company to ask for some more information on this, which should help you get to the bottom of what’s happened.

      If you are liable to repay the amount and you’re not disputing the debt, then we’d be happy to help you look at what’s affordable and offer our advice and support.

      We could help you create a budget that can show how much you can realistically afford to pay which could help you make arrangements. We’ll also be able to explain the debt collection process in more detail and offer specific advice to you.

      To find out how to get in touch, visit http://www.stepchange.org/contactus for more information.

      Rory