Dealing With Debt Collectors & Bailiffs
“We just stopped opening the letters and ignored the calls. Eventually we were due in court and started to panic. Liberty told us not to worry and within two weeks they had sorted the whole mess out.”
Debt Collectors are often difficult to deal with and as such it is important to know you rights. If a Debt Collector receives payments from the public they must have a consumer credit license which is issued by the Office of Fair Trading (OFT). As such if you feel they are acting in an inappropriate or aggressive way you can report them to the OFT who will investigate your complaint.
Whilst you are still bound by the contract you signed with the creditor it is important to remember that they are not allowed to treat you unfairly and make unreasonable demands. You are protected by the law (e.g. the Administration of Justice Act 1970 which protects you from harassment) and you should not be made to feel like a criminal. Often when a debt collector or bailiff realizes you are aware of your rights and willing to stand up to them they will move on to an easier target.
We have outlined below some of the behaviour the OFT regards as unfair: If you are subjected to any of the below then you should keep a detailed record of it and consider making a complaint.
- Contacting you at unreasonable times of the day. (e.g. After 9pm)
- Using confusing legal terms or implying that not paying the debt is a legal offence.
- Asking you to phone them on expensive premium rate numbers.
- Sending letters that look like court correspondence or stating that they can seize your household goods.
- Contacting you too frequently. This is debatable but anything over 3 times a day would certainly be seen as excessive.
- Pressurizing you to sell your property or borrow money elsewhere to settle the debt.
- Asking you to pay in full or in instalments you clearly cannot afford.
- Using threatening language or making threatening gestures.
- Ignoring disputes about whether you owe the money. They should suspend any legal action until this is resolved in writing.
- Embarrassing you in public. e.g. asking you for payments in public. They should not visit you at work or somewhere like a hospital.
- Threatening to tell a third party about your debts such as a neighbour, your family or employer. They should not discuss your debt with anyone else - even a partner.
- Refusing to deal with a 3rd party acting on your behalf.
- Adding unreasonable costs - most would charge around £12 for every call or letter which is acceptable.
- If they visit your home they should give you prior notice and not visit you if they know you are ill or vulnerable. They should leave if they find you are unwell or distressed.
If you are struggling with debt collectors and need further advice then please get in touch. By completing our online assessment we will be able to offer some suggestions and should be able to make an arrangement with them and even write off some of the debt.
Full & Final Settlement
Most people (and some debt advice companies) overlook a full & final settlement but it is a great way to write off some of your debt without the need for a 5 year IVA.
Here is how it works:
Debt collectors either work on behalf of the creditor and receive a percentage of whatever is recovered or actually buy the debt (sometimes for as little as 10p in the £1) and subsequently own it. The trade in bad debt is now a multi million pound industry.
Even if the debt is still owned by the bank they are keen to avoid selling the debt on for very little (e.g.10p in the £1) and will usually consider any sensible offer. If you can manage to raise the funds (e.g. from a credit union or family and friends) it is always worth making your creditors an offer to settle the debt although you should make it clear that this is a full and final settlement and that no further action should then be taken.
If the debt collector has purchased the debt an offer of 50% would be ideal if they have paid 10-25% for it.
You need to be very careful when negotiating with them and to get the best deal you may be better letting Liberty take care of this. By completing our online assessment we will be able to tell you if a debt settlement may be possible.
If you decide to make an offer to a creditor yourself then make sure you keep copies of any letters you send and always get them to confirm their acceptance in writing. Do not send them any lump sum payment until agreement has been reached and received in writing.
It is always a good idea to get a third party such as friend or relative to send the money on your behalf as this helps your agreement to be more legally binding. Also make sure the creditor agrees in writing to change your credit reference file details to show the balance is “satisfied” and the date.
Check this has been done by asking the credit reference agencies for a copy of your credit file.
