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

If you need help with your debts right now use our anonymous online advice tool Debt Remedy, in around 20 minutes you’ll find the best way to deal with your debts.

county court judgment letters

Received a CCJ? Click to find out more

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.

Written by

Tags Bailiffs Client info Collection Process Debt Debt Law
  • moneyaware

    Hi there,
    Thanks for your message. I’m sorry to hear you’re finding it hard to cope financially, but it’s good that you’ve started to take steps to deal with your debt.

    It’s also good to hear you’re in the process of getting a new bank account to protect your money – this is often something we suggest to people when they get in touch with us and have debts with the same bank as their salary goes into.

    Your bank shouldn’t be able to take money from your salary at source at this stage. Often the only time a creditor would do this is when they have already taken court action against you and are still unable to recover the money.

    You are able to get in touch with your bank and offer them a revised payment per month. As you’d be offering them less than the amount you originally agreed to pay back each month, they don’t have to accept your offer. However they may be more
    likely to accept your offer if they understand more about your circumstances and see that this is realistically what you can afford to repay.

    We have over 20 years of experience in dealing with creditors and putting together budgets for our clients. Many creditors trust that the budgets and payment offers we put together are realistic and sustainable, and may even decide to stop or reduce the fees and charges they add.

    As a charity our advice is free and professional, and we can help you put together a budget and recommend the best way to deal with your debts. There are a couple of ways you can get in touch with us – either by giving our helpline a call to speak to an advisor, or using our online Debt Remedy tool if you’d prefer. You can find
    out more about how to contact us here: http://www.stepchange.org/contactus

    I hope this helps.

    Kind regards,
    Laura

  • KENNYBOY

    As a former Bailiff for Equita how we earnt a wage was to force people into paying by using bullying tactics especially clamping cars or gaining entry into homes and listing goods to be removed, This is how we got trained and made to work as we had to meet a monthly quota of collecting full payments, the office had a daily routine of making false visits on to cases and therefore putting on false charges, a small debt of say £100 would end up approx £350 this was routine. If clients had more than 1 debt as long as 1 was paid in full that was the only time an arrangement to pay the outstanding was made, even then we had our charges on the debt and made them pay approx £100 per month to clear, the only time it got sent back to the council was if a complaint was made other wise the council left us alone to collect in any manner possible.

  • moneyaware

    Hi Louise,

    Debts nornally only show for a maximum of 6 years on your credit report, so debts that you’ve repaid for longer than this sometimes won’t show on your credit report.

    This doesn’t affect your responsibility to repay the debt and the debts aren’t written off if they don’t show on your credit report any longer.

    I hope this helps,

    Rory

  • Lib2015

    Lib2015

    Hi

    Me & my hubby has personal loans & credit cards to pay but will leaving UK permanently to work abroad. But willing to pay monthly. How to? Any suggestions please. Thanks!

    • moneyaware

      Hi Lib2015,

      If you can keep a UK bank account open then you can make payments via Direct Debit like you would based in the UK. If you don’t have a UK bank account it can be trickier but still possible.

      If moving abroad is going to leave you struggling to keep up with payments then I’d suggest getting in touch with us for advice. Call our Helpline and we’ll talk you through the options: http://www.stepchange.org/Contactus.aspx.

      Kind regards

      James

  • moneyaware

    Hi Claire,

    Parking fines can be tricky to negotiate payment plans as (depending on the type of fine) they can have more powers to collect the debt than something like an overdraft or credit card.

    It may help with the negotiations if you show them your workings out for the £60 a month offer. If they see your income and outgoings won’t allow any higher payments then they may be more willing to co-operate.

    If you’d like more in depth advice about dealing with this debt then you could give our Helpline a call: http://www.stepchange.org/Contactus.aspx. We can do a full debt advice session with you and see if there are any angles you’ve not yet explored.

    Kind regards

    James

  • susan

    Hi. I live in Scotland and would like to understand my debt.
    1- I created a debt at a previous address and moved never heard anything then a year later moved again I was in the property for 1 month so wasn’t registered on the voters roll and I got a letter for this debt – how did they find me ?
    2- the debt was originally £400 now £750 what’s the likely hood of this been took to court ?

    • moneyaware

      Hi Susan,

      Thank you for posting.

      It may be that your new address appears on your credit report and this is how your creditor has managed to find your new details. This could happen if you’ve updated your address with a different creditor or have taken out new credit at your most recent address.

      We’d always recommend you keep your creditors updated about an address change, as it is your responsibility to let them know of any changes to your contact details.

      There are several different actions your creditor can take to try to get you to repay your debts – court action is expensive and tends to be a last resort,
      but it’s likely to be a course of action your creditors can consider taking. However if you get in touch with your creditor to set up payment arrangements for the debt, they may be less likely to resort to court action to retrieve it.

      You can find out more about what actions your creditors can take to retrieve a debt
      here:

      http://www.stepchange.org/Debtinformationandadvice/Whatyourcreditorscando.aspx

      If you’ll struggle to repay the debts, I’d suggest you get in touch with us for free and impartial advice. We’d be happy to take a look at your situation and discuss any possible debt solutions with you to help you repay
      your debt.

      So that we can give you the best possible advice we need to be fully aware of your current financial situation. To do this we’d to put together a budget using your income, household bills, living costs and a list of your debts. Once we have this information we can offer specific advice and debt solutions that are tailored to your situation.

      There are two ways you can get in touch with us:

      You can use our free, online Debt Remedy tool on our website at http://www.stepchange.org/debt-remedy. This is an anonymous tool that is available 24 hours a day; it will guide you through the process of completing the budget and then offer you the best advice for your situation. If you get stuck or have any questions, you can call us or web chat with us.

      If you’d prefer to speak to someone you can call our Helpline department which is free from landlines and most UK mobiles. Please call us on 0800 138 1111 and we’re here Monday to Friday 8am to 8pm and Saturday 8am to 4pm. It would be helpful to have some information about your budget when you speak to us as this will save you some time.

      If you have any further questions please don’t hesitate to get in touch.

      Jen

  • Caroline Crothers

    Hi, I live in Northern Ireland and I’ve got myself into some debt. I have a personal loan of £6.5k and an overdraft of £1.5k with the bank my current account is with and credit card debt with two companies for £6k. I am up to date with payments but can no longer afford to pay. I’m not sure what the best thing to do is as I don’t want to get into further debt or debt collectors calling.

  • anthony

    My wife and I are oaps and are debt free, however a debt collection agency has been calling about our son who apparently owes past community charge he only resides with us on occasion when he breaks up with his partner etc , he is thirty five years old . He gives our adress out for his mail. The collection agency have been told this but they have infomed me that they will attend my property to remove goods , when I infomed them that all the goods at my property were my wife and mine they said that l would require receipts to that effect can they do this ?

    • moneyaware

      Hi Anthony,

      No, the collection agency shouldn’t be trying to recover a debt from an address they know is incorrect.

      It’s probably best to ask your son to update the addresses on his accounts to his current address so he can deal with these issues.

      It’s quite rare that any debt is collected by goods being removed, there’s lots of opportunity to get arrangements set up before it comes to that. If your son is struggling financially he could contact us and we can give him advice: http://www.stepchange.org/Contactus.aspx.

      It’s also worth pointing out that normal debt collection agencies don’t have the power to take goods themselves. It’s only enforcement agents (sometimes referred to as bailiffs) that can remove goods and that would involve some sort of court action first.

      Kind regards

      James

  • lipson

    Hi,i have a ccj but the amount I owe has an added £22 the creditors say this is for having a ccj on my account, can they add onto the ccj?

    • moneyaware

      Hi there,

      Sometimes there will be added fees for court costs from creditors as well as interest and charges. As long as the amount is fair and the creditor can justify the extra charges then this is common practice.

      If you believe the amount to be unfair or the creditor isn’t able to provide details on what the amount was for then you could make a formal complaint in writing and this should hopefully resolve any issues you have.

      I hope this helps,

      Rory

      • lipson

        The ccj, was more than which I owed, as the original bill payment period was not up, i would have paid the bill off but then I received a ccj which I did try to refute the amount but was stamped by the court and subsequently returned as out of ‘permitted time’ limit, I have no qualms about paying my bill remainder and the court costs, but think it unfair for the creditors to add £22 for having a ccj on my account , that is unfair in so many ways especially if they are justify it by way of having a ccj on my account

      • moneyaware

        Hi Lipson,

        A short letter of complaint to the creditor explaining which charges you’re unhappy will mean they’ll have to investigate and get back to you about this.

        It may be that they agree and refund their charges or they might stand by them.

        Kind regards

        James

      • lipson

        thank you

  • Diane

    I have had a letter put through my door by a bailiff saying that they want immediate payment of £400 for a parking fine from 2013. I hadn’t opened the letters before this as I suffer from depression and find it hard to face these things. I am also paying off 2 credit cards and an over payment of tax credits each month. I live on my own and don’t have anyone who can help me.
    To top it all off I am being made redundant on 17th May and, as yet I haven’t got another job to go to. The bailiff said they would take my car, but if they do I’ll never get a job. I live in my overdraft every month which is currently at £950. I just don’t know where to turn but the black cloud that haunts me everyday seems to be getting bigger and I don’t want to end up in hospital again.

    • moneyaware

      Hi Diane,

      I’m sorry to hear about the situation you’re facing, dealing with debts can be difficult even at the best of times.

      I’d recommend you get in touch with us, so we can talk to you about your situation and offer our free, impartial and confidential advice.

      You can call our free Helpline on 0800 138 1111 between 8am and 8pm Monday to Friday and Saturday 8am to 4pm. One of our expert advisors will look at your situation and offer all of the advice we can.

      We look forward to speaking to you soon.

      Rory

  • moneyaware

    Hi James,

    Parking tickets from private land are dealt with a bit differently than a parking ticket issued by the council.

    They can’t send a bailiff (sometimes called enforcement agent) unless they’ve applied for a County Court judgment and you’ve not paid what the courts have told you to.

    So if this hasn’t happened then the doorstep agent they mention is more likely to just be trying to get payments and won’t have the same powers as a bailiff.

    If you can’t afford to pay the fine in full it’s usually possible to arrange installments. I’d recommend getting in touch with us for advice first, we’ll be able to talk you through the best way to approach them. Here’s the contact details: http://www.stepchange.org/Contactus.aspx.

    Kind regards

    James

    • David Bryant

      Hi James

      I too have had problems with private parking companies and what i do(and this works every time) is just ignore them.
      Trust me on that,i researched these companies and they have no legal power to make you pay like the councils do.They will write PCN on the tickets to try and make them look official but in actual fact what they are is an invoice,not a fine.They will also try saying things like they are pursuing legal action but this is just a scare tactic and as you will see, the letters will trail off from a few every month to 1 or 2 and they will stop once they realize its getting them nowhere.One last thing is that there has never been a incidence of a private parking company successfully bringing a case to court(i checked as part pf my research)let alone getting a judgment and they certainly will not send an agent to your door(scare tactics again)

      i hope this puts yours and your wife’s mind at rest

      regards

      David

  • Svetoslav

    Hi,I’ve got huge trouble with my credit card debts,I owe about 15 000 ,on 4 diffrent credit cards ,1 of these credit cards is also from the same bank where I’ve got my bank accout. I have to pay about 500 total for all credit cards every month,and about 150 of those 500 is interest from cash advance(my biggest mistake that I used credit cards for cash ). Now I also have 1000 overdraft from my bank account ,and I can’t take that anymore.Every month when I pay all my bills and debts my accout is on minus . In fact that means I owe about 15 000 for credit cards ,and 1000 for overdraft and I haven’t got a single penny. I have no idea what to do.Should I just start pay only my overdraft and my credit card from the same bank where is my bank account and try to clear my overdraft and just stop pay all other credit cards.Plese give me an advice.

  • Aqquar

    Hi, I’ve had trouble with a student residence company. I owe them around 400 dollars for a month rent. I am not american, and I’m right now out of US. Can they begin a juridical action, if yes do I risk anything? And will they be able to ask me for the repayment of this debt forever?
    Moreover, they made me pay 3 months rent at the beginning of my lease, I found out it’s not legal in kansas. Would that be a valid reson to legally break my lease?
    Thanks

    • moneyaware

      Hi there,

      Thanks for your message.

      I’m sorry to hear about this situation.

      Laws surrounding UK and USA debt vary, as your debt is with a USA based company it’d be hard to offer specific advice on your situation.

      As our expertise is in UK debt advice, it might be worth looking for free debt advice services that are available in the USA.

      Kind regards,

      Jen

  • Alarmedstudent

    Hi I’m a full time student so i owe No council tax and my rent for now is paid. I have been threatened that bailiffs will come to my door but as I’m in uni from 9am till 7pm and not at home between 7am and 10.30/11pm (hell some times I’m there so late i stay at the student dormitories or friends house.) i wont be around to open the door or meet them (not that i want to as they sound scary and upsettingly violent.) I owed £175 to a loan company that i paid for three years until i feel into hard times and now the bill is at £527 adding the cost of Ccj’s and the bailiff costs to and its climbing!! BUT the question i have to ask is Now over the last couple of months Ive noticed that I’m being followed/stalked and even my friends have started to noticed it also. when I’m at uni there waiting outside the building, when I’m at my dance class(a Activity arranged by my uni to allow for us to relax due to long study hours) getting some food or going to my parents house there there watching. every time Ive gone to ask why they are following me they walk off not even looking back and then more letters come through the post the letters don’t even have the correct name on them as it has my uni nick name (what they call me at uni) and its alarming as i have no debts in that name or anything other than that being my name the uni and my friends call me. Are they trying to see if i live some where else or something because i stay at friends homes and I’m not in most weeks/days? By law can they stalk me?i can’t even use my phone cause when i do a helicopter comes and stays over the house for 20mins. This may sound crazy but others have noticed this and Ive even started recording it and taking pictures when it does happen. Can they do this? i feel like a criminal!!! and my friends are starting to feel threatened and scared by it all also.

    • moneyaware

      Hi there,

      Thanks for posting.

      If you’ve got a debt of £527 that has gone through the courts and has had bailiffs (sometimes called enforcement agents) instructed to collect the debt then I’d suggest getting in touch with us for advice.

      Our contact details can be found here: http://www.stepchange.org/Contactus.aspx.

      We can talk you through how to get an affordable payment arranged for this debt.

      I think you may have a completely seperate problem with some of the things you’ve described in your comment. Bailiffs collecting a loan debt wouldn’t stalk you, monitor your phone use or use helicopters to check up on you.

      I’d suggest speaking to the police about these issues. There’s a number for non-emergencies here: http://www.police.uk/contact/101/. It’s definitely not right that you should be stalked by anyone, bailiff or not, so I’d suggest getting help from the police.

      Kind regards

      James

  • Concerned

    Hi knowing that I was going to be in difficulty due to drop in income making my monthly payment on a Argos store card I phoned them to try and arrange a reduced payment person I spoke to wasn’t very helpful said to me are you in financial difficulty said yes and was told that a £12 default fee is being applied to my account and my card is being stopped and all creditors being informed I’m in difficulty I was quite shocked and didn’t know what to say or do I have not yet missed any payments with them and has left me feeling helpless is this normal procedure for a 1st time possible default on agreement and was told once I default my details will be passed to another department who may be able to sort out reducing payments which is not what I neede to hear when your worrying enough to start off with as I was always under impression its best to speak to the 1st and has put me off contact any of my credit card providers

    • moneyaware

      Hi there,

      I’m sorry to hear you’ve been having a difficult time dealing with your creditor.

      From what you’ve said it sounds like you’d benefit from some free debt advice. As a charity all of our advice is free and we’d be more than happy to help you.

      You might find it useful to give our Helpline a call so you can talk to one of our advisors. They’ll be able to take a look at your financial situation in more depth, put together a sustainable budget, and recommend a debt solution suited to your situation.

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

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

      You mentioned the creditor said that they’d default your account when you informed them you’d miss a payment. Adding a default to your account is one of the actions a creditor can take if you miss or make late payments to them.

      A default is usually added to an account after 3-6 missed payments so it seems unusual that a default would be added to your account straight away.

      However it’s important to keep in mind that without knowing the terms of the credit agreement we wouldn’t be able to comment on the policies of individual lenders as it can vary.

      You might find it useful to read about what your creditors can and can’t do, we have a page on our website about this topic here:

      http://www.stepchange.org/Debtinformationandadvice/Whatyourcreditorscando.aspx

      If after reading more about what your creditors can do, you feel your creditor is treating you unfairly then you could make a complaint to them. You’ll find help and information about how to do this here:

      http://www.stepchange.org/Debtinformationandadvice/Whatyourcreditorscando/Makingacomplaint.aspx

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

      Jen

  • rebecca turner

    I owe 50,000 on 5 credit cards in the last 18 months..If ignore them will they go away until the 6 years statutary time period is up?;)

    • moneyaware

      Hi Rebecca, thanks for getting in touch.

      Our ethos as a charity is that if you recognise the debt then you
      should take reasonable action to deal with them. The Limitation Act is there to protect people from being chased by creditors for old debts, and isn’t meant to be used as a means of avoiding your debt.

      It’s also important to note that the Limitation Act only prevents creditors from taking legal action against you after the 6 year period is up. It doesn’t ‘write the debt off’ and there’s still chance that the balance could still be on your credit file after this time. Your creditor could also take you to court before the 6
      year period is up, and if a CCJ is issued against you then the
      Limitation Act would no longer apply, and you would need to arrange a payment agreement or risk further action being taken against you.

      If you’re struggling to keep up with the payments to your credit
      cards, I’d suggest you get in touch with us for some free and
      confidential advice. We help thousands of people every week to get things back on track, and from what you’ve told me about your situation, we would be able to help you too.

      There are a couple of ways you can get in touch with us. Our
      online advice tool Debt Remedy can help you put together a budget in just 20 minutes: http://www.stepchange.org/Debtremedy.aspx

      Alternatively, if you’d prefer to speak to someone, you could give our helpline a call and one of our advisors can have a chat with you about your financial situation in more depth, help you put
      together a budget, and look at what kind of debt solutions may be available to you. You can find out how to contact us here:
      http://www.stepchange.org/Contactus.aspx

      Kind regards

      Rachel

  • Ray Dudey

    hey guys! great work!
    I have not had credit cards before in this country so 8 months ago ive decided to apply for a card from this company that promises to help people building a credit history “van****”.
    over the last 8 month I always paid on time and over what I’m expected to pay and always paid the interest.
    I just discovered last month that they have not informed any of the credit report agencies about my card so all my credit reports have no mention of my credit history with this company.
    I contacted the company on different ocassions raising this issue and everytime they promised to sort it out and get someone to get in touch with but failed to do so.
    am I within my rights to phone them and say that i will stop paying any money or/and interest I owe until they deliver on their publicly advertised (binding?) promise upon which i decided to take a card with them?
    Please advise!

    • moneyaware

      Hi Ray,

      Thanks for your message.

      You mention you’ve already contacted your creditor about this, but I’d suggest you get in touch with them in writing to let them know that the account isn’t appearing on your credit file. You could also include any information you were told about the card and how it could help build your credit rating.

      If you’re not happy with the response you receive, the next step
      would be to contact the Financial Ombudsman Service (FOS). You can find out how to raise a complaint with the FOS here: http://www.financial-ombudsman.org.uk/consumer/complaints.htm

      In general, advertisements are considered an invitation to enter
      into negotiations, and don’t usually form part of the contract itself. Without knowing more about your situation and the terms and conditions of the account, I wouldn’t suggest you stop making
      payments to your creditor.

      I hope this helps.

      Kind regards,

      Laura

      • Ray Dudey

        Laura thanks a lot for the advice! keep on the great work!