Debt Collectors & Bailiffs
Many of your creditors will transfer your debts onto a collection agency if you get into arrears with your payments.
Initially, you may receive a letter from the collection agency asking you to send payment of the arrears to them by a specified date. You will need to provide them with a copy of your financial statement and also a list of all other unsecured creditors and balances. From then on, you will need to make payments to the collection agent, instead of the original creditor.
Very often the collection agent collects the debts but has no idea about the debtor’s circumstances so make sure you tell them how you came to make your payment and keep them updated with any changes in your financial situation.
Bailiffs can’t force their way into your property and you don’t have to let them in. If they “gain peaceful entry” once – this means entering without breaking in, either through an unlocked door or an open window or being invited in – they can come into your property on future occasions. Should they gain access, they will probably make a list of goods/belongings that are to be seized in the event that the debt still isn’t paid. There are some general exceptions to what a bailiff can take: for most debts, bailiffs are not allowed to take basic clothing, bedding, basic furniture and basic household goods. The bailiff is not normally able to seize:
• Items which belong to someone else
• Rented goods
• Goods subject to hire purchase or conditional sale agreements
• Fixtures and fittings
Remember that bailiffs must leave if you ask them to; if they don’t, they are breaking the law.
A Debt Collection Agent cannot instruct a bailiff to call for an unsecured debt. A bailiff will only be able to attend a property if you have failed to pay a County Court Judgment. A Debt Collection Agent can, however, appoint a local representative to call on their behalf. This person is best thought of as a “walking version of a letter”. They are no different to you or me.
The local representative is NOT a bailiff. He has no right to come into your home even if you open the door to him and he cannot threaten to remove goods. The reason he/she calls is because you may feel more inclined to make a payment to him/her at the door, when in fact, if you are paying your token offers to the debt on a monthly basis already, there is no need to have someone come to the door requesting more money.
Should you receive notification that someone will come to your home, write back and explain you are not prepared to have anyone come to your property and let the Debt Collection Agent know the date of your last token payment and when you will be paying the next one.
For more information about bailiffs, check out our section on Debt Solutions.
The first thing to do is to get some advice about your options. Check the Debt Solutions section for starters where you’ll find some general information about possible solutions.
For help over the phone, give Payplan a call on 0800 1978434 or if calling from a mobile, it may be cheaper to call them on 02033 082982. They’ll be able to discuss with you what might be the right path to take depending on your circumstances.
When you fall into debt, your creditors are within their rights to contact you to pursue their money. However if this becomes excessive, and you are being hassled by them, you can start by writing a letter of complaint to the creditor stating section 40 of the Administration of Justice Act 1970. We can help with the wording, just include the following paragraphs:
• “I am repeatedly having to say the same things to your representatives who call my telephone number continually. (You can add information if relevant about other members of the household etc or if they are phoning you at work)
• “Please note that under the Data Protection Act, I am formally demanding that you remove my telephone number from your records. If you fail to do so I shall take this matter to the relevant authorities for their investigation. Due to the seriousness of this matter and any legal action, which may arise, I will only correspond in writing and will not accept phone calls or personal visits. Should you either visit or phone, I shall consider this as harassment and either take legal action and/or make complaints to the Office of Fair Trading under section 40 of the Administration of Justice Act 1970.”
• “Section 40 of the Act provides that a person commits an offence if, with the object of coercing another person to pay money from the other as a debt due under contract, he or she: harasses the other with demands for payment which by their frequency, or the manner or the occasion of their making, or any accompanying threat or publicity are calculated to subject him or his family or household to alarm, distress or humiliation.”
Send this letter by recorded delivery so that you have signed confirmation that the creditor has received it and they cannot claim at a later date that they have not received any notification of this. ALWAYS KEEP A COPY OF ANY CORRESPONDENCE SENT TO OR RECEIVED FROM YOUR CREDITOR.
Another possibility is to inform the creditor that you will notify their professional association of their conduct (details of this are generally stated at the bottom of their letters).
If you have no success after sending the above letter, you can then make a formal complaint to the Office of Fair Trading. See our Debt Solutions section for more help about dealing with creditors.
Personal loans and credit cards in the UK are regulated by the Consumer Credit Act 1974. If you fail to maintain the contractual payments on your account, your creditors are within their rights to take action to recover their money. According to the Act, the creditor must issue you with a Default Notice before legal action can start.
However, a Default Notice does not necessarily mean that your creditor intends to take you to court, especially if complied with. It will contain details of the action the creditor wishes you to take and the action they will take should you fail to comply. However, the creditor has to follow the correct procedure and cannot simply issue a County Court Judgment without ensuring that everything has been done correctly in the process beforehand.
Creditors do sometimes mention court action at an early stage in the hope that people will find the money to clear their debt because they don’t want to end up having court action. For more information about creditors and organisations who can help, see Debt Solutions.
If you have an account with the same bank that you owe a debt to, or a bank linked to that bank, you should open an instant access cash card account with a bank or building society not associated with any of your current creditors.
Otherwise the creditor has the Right to Offset which means they can withdraw the funds from your current account (without your permission) to bring the loan or credit card debt up to date. This means that there is a risk the money won’t be there for you to pay rent/mortgage, utilities or put food on the table.
An instant access cash card account has no credit facilities such as overdrafts. There should be no need for the bank to apply for a credit reference check but you will need to provide proof of identity and address; some form of photo identity and also a letter with your name and address on, preferably something like a utility bill.
Once you have changed your bank account, don’t forget to notify all collections of payments, especially mortgage, hire purchase agreements, Council tax and utilities.
If you are in arrears with your mortgage or rent, get in touch with your lender or landlord without delay.
Explain why you are in arrears. If you haven’t already done so, please discuss how you plan to repay your arrears because if the lender knows and understands your circumstances they may give you extra time to repay the arrears.
If you are on a low income and renting, you may be entitled to housing benefit. Contact your local council to check this.
The best action to take is to make an offer to your landlord as quickly as possible.
If you have council tax arrears, get in touch with your local council and make an arrangement to repay them if possible.
Check whether you are entitled to a discount because you live alone, or whether you can claim second adult rebate.
If your income is below a certain level, you may be entitled to council tax benefit.
It’s worth checking whether you can change the way that you pay your energy bills. Consider:
• Asking your supplier if you can pay your bills over 2-3 months
• Paying in monthly instalments.
• Requesting that your supplier installs a pre-pay meter. The meter is topped up at a shop with a key or card and set to collect a weekly sum of your arrears. You must top up the meter weekly to prevent the arrears increasing.
• Asking the DWP to make deductions from your benefits, if applicable.
• Getting in touch with your fuel supplier to see if you are eligible for a Social Tariff, which could reduce the cost of your fuel.