Being contacted by a debt collector can be an extremely unsettling experience, especially if they visit your home. That’s why it’s important to understand what their powers are and what rights you have.
Bailiffs vs debt collectors
There are key differences between bailiffs and debt collectors.
Bailiffs, now known as enforcement agents, have special legal powers that allow them to collect debts. Often they are appointed by a court to collect debts such as:
- Council tax arrears
- Unpaid tax
- Criminal fines
- Child maintenance
- Parking fines issued by the local authority
Bailiffs are allowed to take objects from inside or outside your home to cover the money you owe. However they cannot force their way into your property unless you owe money for a criminal fine or certain taxes. And you do not have to let them in.
A bailiff’s visit shouldn’t come out of the blue.They are legally obliged to contact you at least seven days before coming to your home, to give you an opportunity to pay.
Debt collectors are asked by creditors to attempt to retrieve money they are owed. Some agencies buy the debt entirely before trying to collect it. The important difference is that debt collectors do not have any legal powers. They chase debts such as:
- Credit or store card debt
- Outstanding overdrafts
- Utility bill arrears
- Unpaid personal loans
Initially they will contact you by phone or letter. If they come to your home to collect payment you do not have to let them in or pay what you owe and they have no right to take any of your belongings. If you ask them to leave, they must go and you should not be intimidated into paying if you do not want to.
Dealing with debt collectors
When they first get in touch ask them to show evidence of the debt and tell them you only want to be contacted by letter. If they have made a mistake, write to them to explain the debt is not yours and refer them to Trading Standards if they continue to chase you for it.
If you owe them money, the easiest way forward is to pay them as soon as you can. This will prevent any further contact and also stop your creditor taking you to court and, potentially, more powerful bailiffs being appointed to retrieve the debt.
If you cannot afford to pay the debt the best option is to be open and honest with your creditor. They may be able to change your repayment plan and reduce what you owe each month. Alternatively you can ask a debt charity for support.
If anyone visits your home asking you to pay a debt and claiming to be a debt collector, you should always check their identification.
How debt charities can help
They will give you access to a free debt advisor who will contact your creditors to tell them you are working with a debt charity. They can also negotiate a debt management plan for you.
This involves working out together what you can afford to pay each month. The charity will then put the plan forward to your creditors.
Your creditors do not have to agree to the arrangement but most will see it as the best way to get back some of the money they are owed. Once the plan is agreed you’ll pay the charity each month and they will distribute it to your creditors who should stop contacting you, although they are not obliged to.
Forms of insolvency
If you can’t keep up with your planned repayments, your creditors are likely to start chasing you again. At this point you could consider insolvency options such as:
- Debt relief orders, which allow you to stop paying debts under £20,000 if you do not own a home, and wipes them off after a year.
- Individual voluntary agreements (IVA), used for larger debts an IVA allows you to pay what you can afford before, after a certain period of time, the remaining amount is written off without losing your home.
- Bankruptcy, this is a last resort when you are unable to contribute anything to your debts. You will usually be forced to sell all your assets, including your home.
Although insolvency will stop creditors chasing you, it will have a negative impact on your credit rating, making it very difficult to borrow money in the near future.
Working with us
Another way to address your debt problems is to sell your home. We specialise in buying properties quickly. In fact we can complete a sale in just seven days if necessary, that means you’ll swiftly have funds in your account and any costly mortgage payments will stop.
Because we only buy using our own cash funds, there are no estate agents’ fees to pay and you are not part of an unpredictable chain that so often falls through. Our aim is to make the process as hassle free as possible, that’s why we also instruct and pay for solicitors.
If you’d like to discuss how we can help you we’d be happy to chat, so please get in touch.