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

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

Last updated: 5th September 2016

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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 debts.

Please note: the advice below talks about what creditors can do with unsecured debts. There’s more on our website about priority debts and arrears.

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’s owed on the credit card. They don’t need permission from you, but they do need to warn you in advance. This is called the bank’s right of offset.
  5. They can issue a default notice. These are usually sent after 3-6 missed payments, and serve as a warning that your account is about to default. The default is usually granted if you don’t bring it up to date within two weeks. It’ll appear on your credit file for six years and will make it harder to get credit for that time.
  6. They can pass the debt on to a debt collection agency. These don’t have any more legal powers than the creditor, but they may be more persistent in contacting you.
  7. They can apply for a County Court judgment(CCJ). If you receive any court forms you must fill them in and make an offer of repayment. The court will set a repayment and it’s important that you stick to this, or the creditor can take further action
  8. They could issue a statutory demand. This is the first step they can take towards applying to make you bankrupt. This is only possible with debts over £5,000 and fortunately isn’t very common.

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. If you want, you can request that they only contact you in writing, but make sure you open your mail if you do this. You can read more about debt collection guidelines on the Financial Conduct Authority website (although this information is a bit dry). We also have more about your rights when dealing with creditors on our website.
  2. They cannot break data protection laws, so they cannot speak to your family, friends, neighbours or an employer without your permission.
  3. They cannot pretend to possess legal powers they don’t have, for example by making their letters look like court documents or claiming they can send bailiffs to your property without a court order.
  4. They cannot add excessive amounts of interest or charges. They can’t increase the rate of interest because you’ve missed payments. And they can’t add collection charges which are more than the costs to them, so for example a creditor couldn’t add £100 for sending a letter to you which will have cost them much less than this.
  5. They cannot stalk you on social media – see our blogpost 10 ways to stop debt collectors finding you on social media.
  6. Sometimes creditors may not be nice to speak to, but they can’t be threatening or abusive to you, and they can’t lie to you.

In practice, you’ll find many creditors are more reasonable than you might expect, especially if you explain your situation and let them know you’re getting help to try and sort it out.Save




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.

Written by

Tags Bailiffs Client info Collection Process Debt Debt Law
  • Jessica Gilmour

    I was conned into paying for extra with 1&1 website services. My bank account changed, and whilst I didn’t do this on purpose it now means they can’t charge me. I haven’t used the website and did call previously asking to cancel the extra, though I understood I had to pay for the initial payment. They told me it was a free month trial and could be cancelled within the month if I didn’t like it, I did try and call more than once to cancel it within the month but couldn’t get through. When I did get through they told me they couldn’t cancel it, eventually it seemed they were simply unwilling. Now I have had a letter, email and missed call off a collecting/billing enforcement agency.

    I will pay the initial fees, but no more.

    Any advice?

    • moneyaware

      Hi Jessica,

      Thanks for getting in touch.

      As a debt charity, our expertise is in dealing with debts rather than disputing them.

      If you’re unhappy with the way a company has treated you, you should make a complaint to them using
      their complaints process.

      If it turns out you do need to pay the money and you’re worried about how it’ll impact on your finances, please
      feel free to give our Helpline a call for advice:

      Kind regards,


  • Ben


    I offered a debt collection agency £100 per month to clear a £1500 invoice i had with one of their clients. They refused this and put me on a 6 month plan at £275, i couldn’t pay the first payment and now they have said i must contact them to discuss clearing the debt or legal action will begin. What action is the next step for them, do i still have time to try and get the debt paid off in full?

    Thanks for your help,


    • moneyaware

      Hi Ben,

      If a debt collector talks about legal action they’ll usually be referring to a County Court judgment (CCJ). Here’s some more information about them:

      They might want to get a CCJ for this debt but most of the time debt collectors are willing to come to an arrangement without it needing to involved the courts.

      I’d recommend getting in touch with us for in depth debt advice. You can do that online, using our Debt Remedy tool: It’s free, impartial and will you work out the best way to deal with your debts.

      Kind regards


  • Ayla Louise Clingo

    When I was at a different uni SF overpaid me and then said I owed them nearly £2000. As I am still a student they decided to take the £2000 out of my current SF loan to cover the mistake. This was a year ago and now I am getting letters saying that I never paid it and they are transferring the debt to debt collectors. I don’t know what to do. It is really worrying and can’t afford to sacrifice £2000 of my loan again.
    From Ayla

    • moneyaware

      Hi Ayla,

      Thanks for posting.

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

      I’d suggest getting in touch with the student loan company to tell them what’s happened.
      They should have records of the payment being deducted from you.

      If you have any emails, letters or bank statements to bank this up, it might be worth sending
      copies to them for evidence.

      I hope this helps,


  • James joseph

    I have a friend that has been a university student but has dropped out. They are not from this country but as the university noticed the council of the persons leaving they have received a tax bill of nearly 800 pounds. My friends works enough to support them self but does not have this spare cash. They are now living with another person sharing a room in a uni student house. Can they get away without paying? They are sending letters to their house in the foreign country…. Please help

    • moneyaware

      Hi James,

      We wouldn’t encourage someone to avoid or ignore their debts as this could lead to further action being taken by the creditor.

      We’d also suggest your friend updates their creditors with their most recent address as it’s seen as their responsibility to keep creditors updated with the right contact information.
      This way they won’t miss out on any important information about the debt.

      You can read about dealing with UK debts from abroad, and what creditors can do to collect these debts on our website:

      And you can read about what creditors can do to collect debts here:

      If your friend is worried about the debt and how it’ll impact their finances if they pay it back, I’d suggest they give our Helpline a call for some free debt advice. Our advisors can talk through the situation with your friend and let them know a solution to help them deal with their debt.

      If your friend is worried about talking to us, they can give you permission to talk on their behalf.

      You can find out how to get in touch with us here:

      Kind regards,


  • Dave

    Good morning, Can you help with the following please? This is the edited version!

    March 2008
    We ensured that our accounts had a zero balance and asked Barclays to close our business account, my personal account and cancel our credit cards. We were told that this had been done. Only one account was to remain open so that we could send money to the UK. We set up online banking and were given a pin sentry device so that we could access the account, it was the only account showing online.

    December 2014
    My parents received a letter stating that the account was overdrawn, we spent 45 on our mobile from Australia trying to resolve this and asked for a new pin sentry as ours no longer worked so we could not check our account. It should have been delivered to a house sitting address that we were staying at but it did not arrive.

    September 2015
    We received a call from Barclays demanding payment of over 1000 pounds. We explained that we could not access our account to see the alleged arrears so did not know how much we owe. We asked for copies of our bank statements and were told that we could not have them unless we paid.

    May 2016
    A debt collection company contacted my ex-wife whose name was taken off the account in 2001 when we were divorced, Barclays wrote to her saying that they will now chase her for the debt.

    We have asked the debt collection company (Barclays) to supply bank statements showing the alleged debt and have offered to pay any overdrawn amounts but not the interest as the accounts should have been closed. They refuse to let us have them without payment.

    Can you please suggest how to resolve this matter?

    Many thanks, Dave

    • moneyaware

      Hi Dave,

      Thanks for getting in touch.

      I’m sorry to hear about this situation – it sounds very frustrating.

      Firstly, you can write to your creditors with a ‘right to information request’, asking them for the information about your accounts.
      You can find a template letter for this here:

      Also, by law, your creditors need to supply you with an account statement. So if you haven’t been receiving these it might be worth filing a formal complaint.
      You should be able to do this using the complaints procedure on the creditor’s website. If you’re unhappy with the response you receive, you can escalate it to the
      Financial Ombudsman Service.

      If you think interest and charges have been unfairly added to the debt, you can include this in your complaint. Furthermore, if you’ve got any evidence of closing the accounts with Barclays, it might be worth including copies of it in your complaint.

      We’ve got more information about making a complaint here:

      I hope this helps but if you’ve got any more questions please let us know.

      Kind regards,


  • carter

    Hello, I am in desperate need of help and very confused of this situation.

    I was a director of a construction company to which i have now resigned. We had materials on credit for the sum of around £3000. Apparently within the credit agreement it stated that the directors would agree to take on any deafult sums owed by the company. The company is still running and has current directors (so they could potentially pay it off) but they are chasing me for the Limited company’s debt.

    I have just received a noticed of enforcement. i am currently on benefits and injured (fractured spine). I have been signed off work for at least 3 months so am in no position to pay off any debt currently.

    I have a 4 year old daughter to support and insane bills and rent to pay which benefits already doesn’t cleat the costs of.

    Any advice would be truly appreciated!

    Best regards


    • moneyaware

      Hi Carter,

      Thanks for getting in touch.

      I’m sorry to hear about this situation.

      For business debts I think you’d find it useful to get in touch with Business Debtline for advice. They should be able to give you more specific advice on your topic and what to do in your situation. You can find their website here:

      I hope this helps,


  • Racheal

    Hi, is it possible for some advice please?

    I worked for a nurserty over six months ago, my son was enrolled at said nursery. Throughout my duration there the managers told me to only pay X amount nursery fees. Which I complied and payed said amount every month. Upon my leaving they asked for the outstanding balance, £100 per month more than I was paying all in all about £1500! They then proceeded to hold onto my last wage unlawfully without any warning etc. In order to get my wage I had to sign an agreement that I would pay the outstanding balance in full by a certain date. ( I had to agree as I needed to provide for my 1 year old.) so they then moved on to a CCJ over what I could afford per month but I paid it anyway to keep them quiet. I have recently lost my job and cannot afford the repayments. I have informed them of my situation and made a offer of £20 per month as it is all I can afford until I am back on my feet. All other creditors are happy with it but this one. I received an email today threatening that because of my “aleged” circumstances they are refusing my offer and want a lump sum by the 7th October or they will push the court to enforce agents or bankruptcy. What do I do?

    • moneyaware

      Hi there,

      I’m sorry to hear about this situation.

      If you
      can’t afford the payments to the CCJ you can apply to have the amount you
      pay changed. You can find out more about this here:

      If you think your creditors are treating you unfairly, you could make a formal complaint.

      If you’re struggling with debt you may find it useful to get in touch with us for some free and impartial debt advice. Our advisors will be happy to chat through your situation with you and let you know about the options available to help you deal with your debt. You can find out how to get in touch with us here:

      I hope this helps,


  • edsexby

    Hi. I have creditors and I am really struggling to get my situation sorted. I am sixty years old in April of next year, I have a physically demanding job and work a 40 hour week on night shifts. I would really like to lower my working hours to 35 hours per week but am concerned that my creditors can force me to carry on as I am in order to continue paying them the small amount that I am managing at the moment. Please advise.

    • moneyaware

      Hi there,

      Thanks for posting.

      Your creditors can’t force you to work extra hours to pay back your debts.

      If you have a drop in income due to working less hours, it’d be important to let your creditors know about the situation.
      You can send them an updated version of your budget, showing them how much you can afford to pay towards your
      debts as a result of the change.

      We have a budget form you can use as a guide for this here:

      If you’re worried about the impact paying back your debts will have on your finances, I’d suggest you give our team a call for
      some free debt advice. Our advisors will chat through your situation with you and recommend a solution to help you deal with the debt. You can find out how to get in touch with our Helpline here:

      I hope this helps,


  • Natasha

    Hi, I have recently lost my job and wasn’t paid my final pay at the end of September. I was meant to pay a creditor of mine as we had an agreement on instalments without getting a debt collection agency involved. I have been paying every month excluding August (was signed off sick due to injury for 1 month) and September due to the situation with my pay. The creditor has since then gotten a debt collection agency involved, and I have explained my situation even though at first the creditor wouldn’t agree to my monthly instalments with the agency, they demanded that I pay £150 per month which I cannot afford at all. This week I have emailed again explaining what I cannot afford to pay as per losing my job and not receiving my final pay and asked them to put a hold on the payments until I get a new job or another way of income (other creditors have agreed) but the response I got was that if I don’t pay by end of play today they will have no choice but to seek further action. Which I know could be a CCJ but how can I afford to pay that if I have no income? Please help. Thank you, Natasha

    • moneyaware

      Hi Natasha,

      You’re right, you can’t pay creditors money if you don’t have it. Despite what some debt collectors say, it’s important to only pay what you can afford to debts. It can make a situation worse if you pay creditors money you need for essential costs.

      You mention that a CCJ is a possibility for this debt. It’s worth pointing out that a CCJ can be set as low as £1 a month, if you can show you don’t have any more money available to pay a debt. Creditors won’t usually apply for CCJs if they can see you’re trying your best with a debt.

      I’d recommend getting in touch with us for more in depth advice. Our service is free, confidential and impartial. We’ll help you work out a budget and suggest option to deal with your debts in both the long and short term.

      Here are our contact details:

      Kind regards


  • Barryedwards

    Hi, i have 3 loans that defaulted in march 2008 and have not acknowledged them since then. I have received numerous amounts of letters asking for partial settlements from debt collection agencies but no court action. As it has been over 6 years since it defaulted. Are they still enforceable in court. I like to add i cannot afford any repayments as i am on a low income. Also one of the debt collection agencies done a credit search on my credit report. Can they do this. I am scared to write back as i think this will reset tbe clock and as i would of acknowledged the debt they might be able to take court action.
    Please help.
    Thank you


    • moneyaware

      Hi Barry,

      The default date isn’t the point when the clock starts ticking for the limitation period on a debt. It’s more likely to be the date you last made a payment or the last time you acknowledged the debt in writing.

      It sounds like there’s a possibility that this debt could be “statute barred”. There’s more information and a link to a useful template letter in this page of our main website:

      The above article should help you work out where you stand and give you some ideas about your next steps.

      Kind regards


  • Meryem

    Hi, I’ve been contacted by a debt collection agency on behalf of british gas asking me to pay for bills from 2014 to 2015 for a flat where I’ve stayed there for 2 months only. I was living there as a guest by my friend so I don’t have a contract with the flat owner or british gas. I only used that place to receive mails when I was abroad for 5 months and then moved to another place. What should I do? Thanks 🙂

    • moneyaware


      I think the first step would be to speak with British Gas to check your account. They should only bill you for the time you were responsible for the bill. It may be that they weren’t aware that you’d moved out. If you don’t have meter readings from the time you left the property they may estimate your usage for the time you were in the property.

      If you make a complaint to British Gas and you don’t feel like they deal with it to your satisfaction you could then consider involving the Energy Ombudsman. There’s more information here:

      Kind regards


  • stacey

    ive had a letter from a solicitor acting on behalf of capquest regarding a old debt, they are saying i last paid june 2011. i thought id been paying this off via another company. ive been searching but can not find this last payment on my bank statement. i have offered to make a small payment monthly until i can find out where my orginal payments have been sent. they are requesting a financal statement, which im not happy to give them, but willing to make monthly payments. theyve said if i dont set up and arrangement theyll take me to court.
    how can i set up a small payment without disclosing my personal information


    • moneyaware

      Hi Stacey,

      I wouldn’t recommend making payments to this debt collector until you’re confident that you actually owe the money to them. You could contact them and explain that you’re investigating what’s happened with the account and that you’ll be in touch once you’ve got more information.

      It may take a bit of detective work, but I’d recommend trying to find some records of your payments to see if you’ve already paid this debt. It may be useful to speak to the original company you owed the money to, in case they have records of where they passed the debt.

      If you find out that you do owe the money then it’s reasonable to set up a payment with them. They should be able to provide you with a range of repayment methods, so you can work out which you’re most comfortable with.

      Kind regards


      • LindseyM

        Is this Shoosmith Solicitors acting on behalf of Capquest? We have had a letter off them this morning ans was wondering if they can actually take me to court as they are a solicitor?

    • Jane Billingham

      This is common practice for CapQuest to search out debts that are reaching the Statue Bar Limitation and apply pressure to pay before that time runs out. They buy up these debts for pennies and hope to make a huge profit. If it states that your last payment was June 2011 it means the right to legally pursue you for the debt runs out June 2016.
      I would not attempt to make any payments to Capquest.
      What I would do is get your credit report and if another company has ownership of the debt if should be on there along with your payment history to them. Do not give Capquest any personal information.
      Write to Capquest recored delivery that you dispute the debt, do not under any circumstance sign the letter, just print it and send it

  • Jalal

    So I was in England for two years as a student (study visa), and I joined a gym, under a 12-month contract. However, I left the country three months after joining. I did leave a notice saying I was leaving, but my gym insisted that I had to notify them before the at the start of a month or something. I can’t recall. Anyway, I left the country around the 3 month mark to come back home (my classes ended, so no reason for me to stay). But now the gym is demanding payment and saying they’ll contact a creditor agency and possibly pursue legal action if I don’t pay the amount incurred (£33 monthly). I paid for all the months that I attended, so I didn’t cheat anyone. But does this affect me when I’m not even in England anymore (I’m in Bangladesh) and also would this affect my future visa applications made to other countries?

    • Becca Drury

      Hello Jalal

      Thank you for your query. If you still have a copy of the contract that you originally entered into, or can request a copy – check the terms of the agreement to see if you are definitely liable for the debt and whether you broke the terms of the contract.

      We cannot advise you on Visa queries, contact the body that would issue the Visa for the country you are travelling to for further information on this.

      Thank you


  • Conor

    hello, im a student from ireland, and last year i was studying in luton in bedfordshire. i ended up dropping out of my course which didnt cause any real issues. however, my accomidation refused to cancel the contract and said i must pay the remaining months, keep in mind i started the course in october and left in november, and they wanted me to pay every month till may of the following year. for several months i didnt hear anything from them, then one day in march i got an email saying i owed them £4500 and if it wasnt paid within 5 days theyll take legal action. so i emailed back asking a a breakdown of the bill. several weeks passed with no response and i got another email saying the same as before, so i emailed again, this time explaining some of the issues i had will staying there. then weeks passed again and i heard to response then i started getting letters from a debt collector again stating theyll take legal action, i called and said that i refused to speak with the debt collectors as i had heard no response to the issues i had raised. then i got an email saying that the guy who had been dealing with the issue had left the company and i had no option but to speak with the debt collector. some time passed and i heard nothing so i emailed and said i assumed the debt was resolved as id heard nothinf from them. this all happen between march and august, now 6 months later i get another letter threatening legal action. what i really want to now is, should i be worried, what do they mean by legal action and is they anything i can do to resolve this without obviously having to pay out a massive amount of money. thanks

    • moneyaware

      Hi Conor,

      If you have an issue with the way a creditor has dealt with your situation, the first thing to look into is making a formal complaint. You should do this in writing, explaining what’s happened and also what you’d like them to do to resolve things with you.

      It can be very frustrating to have a debt caused by situations such as this, and although it may seem unfair it can often result in you still being liable for the debt, as you’ll likely have entered into a contract.

      However we wouldn’t know for certain what the exact details of this are, so it’s best to first make a complaint and hopefully this should help.

      If you do end up being liable for the debt and you’re worried about how you’ll be able to pay it, we can help. We offer expert advice and debt solutions and you can visit our website for more information.

      Best of luck, we hope you get it sorted.


  • David

    I graduated University in June 2013, and used my Natwest account as my current account until around June 2014. At this point I was living overseas and have continued to do so until now, where I have been using a local account for wages, bills etc. However I never correctly dealt with my student account, which turned to a graduate account. I have plans to move back to the UK at the beginning of January and I am terrified that this student debt has now completely spiralled out of control with overdraft charges, making it basically impossible to easily receive future wages or anything else. I understand it has probably already destroyed my credit rating as well.

    Is there any advice you can provide me with finding a way to maybe open a new account to allow me to receive wages and also gradually pay of this student account debt which I have neglected? How difficult will it be for me to open another account while this problem is occurring? Would trying to take out a loan to wipe out this debt and then paying this off instead be a possible option? Any help would be massively appreciated.


    • moneyaware

      Hi there David, thanks for getting in touch.

      I can appreciate why this would be a very stressful situation for you. Once you return to the UK, you should be able to open a basic bank account with a bank you don’t currently bank with or have any prior credit agreements with (credit cards, loans, store cards etc).

      Current accounts require credit checks, as they often include an overdraft facility. Basic account’s don’t include overdrafts – they simply allow you to have your money paid into an account, pay by debit card on goods, carry out online banking and most other things you’d typically need from an account. You can find out more about basic bank accounts here:

      While your credit rating may have been affected by the debts you’ve mentioned, payments made on the debts can improve it over time. You can find out more about credit files here:

      In regards to the debts you’re dealing with, please know that we can give you free and confidential debt advice once you return to the UK. We’ll take a look at your budget and look into any debt solutions that may be available. Our online advice tool Debt Remedy can help you put a personal action plan together in around 20 minutes:

      Kind regards


  • Gerry

    Without prejudice (just in case Paypal see this)

    Background is:- I was commissioned by a US company to participate int an engineering design task. they payed by credit card through Paypal, Im UK based.

    They cancelled the project several weeks in, I’m assuming because they discovered the project wasn’t going to succeed, financially, technically, ???.
    I dont know as they never told me, but sent an email saying

    “Hello ***, I am very sorry but I will have to stop the project Please refund **** USD (it’s **%) It will be fair for everybody.”

    I though the refund request was reasonable and was considering it, when a few days later, Paypal informed me there was a dispute raised for the full amount.
    I sent all the email and engineering drawings involved, and they ruled in my favour, restoring my account. Especially as the US company had withdrawn one of
    the disputes (there were 2 stages, hence 2 orders and 2 disputes).

    After that Paypal informed me the US Co had started a charge back thu there credit card company. They say it can take up to 75 days and have debited my account several thousand pounds, putting it in the red. They have already started threatening with a collections agency.

    My question is, Paypal accepted the credit card payment, I have no credit card agreement with anyone, I don’t even own a credit card, as im in a voluntary dept repayment scheme and cant take on any additional debt. Can Paypal sue me for the money, if the credit card company decide in favour of there client, or is it Paypal’s liability as they accepted the credit card payment.

    I have to say I wont be paying, and will go to court if that’s required, but any informed opinion is keenly sought.

    • moneyaware

      Hello Gerry

      Thanks for your question. It sounds like your issue at this stage is more related to consumer rights than a debt advice so I don’t have much advice I can offer here. I’d suggest that you contact Citizen’s Advice as they have a better understanding of your rights as a consumer, and can offer you free advice through their helpline, more information here:

      You’ve probably already seen this, but just in case, Paypal’s page on their chargebacks policy has more information on their procedures which can be found here: It might also be worth contacting their customer services to discuss your position if you’ve not been in touch with them yet.

      Thank you


  • michelle jukes

    my son was at bangor uni and finished in june 2016. He is over drawn in his bank which has ended with his card being held by cash machine. He now has a full time job which pays weekly. but the banks is refusing to reinstad the account until the banalnce is paid, which means he will have no money for around 3 months. So i was just wondering if the banks can do that

    • moneyaware

      Hi Michelle,

      If the account is in an unarranged overdraft then it’s often the banks decision to decide whether they’ll keep the account active or suspend or close it.

      However, it doesn’t sound like there’s anything preventing your son opening an account up with another bank, so that he can get his wages paid into it and then deal with the old bank account and any debts that he owes separately.

      We have some more information on bank accounts on our website at:

      Kind regards