Can I Wind Up In Court Due To Actions Of A Debt Collection Agency?

Failure to pay bills has many consequences, going into debt being a major one.

If credit card, loan, and overdraft bills are piling up, the worst thing you can do is not pay them. When a debt payment is not made on its due date, the debt usually becomes classified as arrears.

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After several attempts to recoup the money that is due, a creditor may turn the debt over to a collection agency

This third party will make additional efforts to get a debtor to repay money owed to the creditor.

Collection agencies might purchase debts from a creditor or receive a percentage of the amount collected as compensation for their efforts. Once a debt has passed to a collection agency, this firm should be paid directly for the debt.

A collection agency may be able to prevent interest and charges from accruing, but it is not obligated to do so. A debtor may be able to arrange a monthly payment plan to repay the debt.

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Benefits of our debt solutions:

  • Write off debt and lower monthly repayments
  • Frozen interest and charges.
  • No more calls or pressure from creditors.
  • A fixed agreement typically lasting 5 years.
  • Protection from unsecured creditors.
  • An IVA may be an available debt solution.

Methods that agencies employ

Collection agencies use debt recovery efforts such as telephone calls, letters, and visits to the home. Unlike a bailiff, a debt collector is not permitted to enter the home or take possessions from it. The collector is only allowed to talk to a debtor about repaying the debt and is authorized to agree to different payment arrangements.

A debt collector must follow fair debt collection guidelines published by the Financial Conduct Authority. Though collection firms want to recover as much money as possible, they must treat debtors fairly. Harassing behaviour on the part of a debt collector is not permitted. It should be reported to the local trading standards department, the Financial Ombudsman Service, or the police, depending on the nature and severity of the harassment.

Ignoring the problem doesn’t help

If a debtor ignores a debt collection agency’s requests, additional consequences follow. If a collection agency is collecting debt owned by the original creditor, it might pursue court action on behalf of its client. If the debt collection agency purchased the debt it is attempting to collect, it is entitled to sue the debtor to collect the money.

A solicitor may become involved in the collection of the debt. Sometimes, the solicitor acts as a collection agency and should be treated as such. In others, the solicitor may be part of the creditor company. In this capacity, the solicitor does not have any extra authority. A creditor may involve a solicitor in debt collection when it intends to begin court action, but this situation is not very common.

A creditor is permitted to take action to recover the debt if the money remains unpaid or if it is unwilling to accept the offer of payment proposed by the debtor. The creditor must issue a default notice and provide the debtor with time to pay the arrears before it initiates court action. The court will also be involved if the creditor turns the debt to a bailiff for collection following preliminary legal processes.

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