How To Deal With Debt Collectors

How To Deal With Debt Collectors

While dealing with debt collector agencies, it is imperative to know your rights.

If you have received a few notices and have longstanding debts, be assured that you will hear from the debt collection agencies almost certainly.

Please do not let their profiles intimidate you. Neither do you have to fear for your property. This is still an early stage of debt recovery and debt collectors are not bailiffs. Do remember that.

What Are You Dealing With?

Debt collectors are companies who are equipped with the means and technology to collect debts where the original lender hires them to do so.

All across UK, there are various large and small, national and international debt collector companties.

They Function In Either Of The Following Two Ways-

a) Your lender may sell or ‘assigns’ your debt amount to an agency because either you are not paying regularly or the amount is not enough. Once you default the initial contract, you are at risk for the above course of action by your lender. The debt is sold to a lower amount so that the money that is stuck with you can be mobilized. In turn the collection agency legally becomes the owner of the debt that you owe.

b) Once the payment is released, the original creditor is given that money and the commission is deducted from the agency's account.

A good way of knowing which method is being employed is by looking at the letters that are being sent to you by the collection agents. In case they advise you to continue paying to the original lender, you can be sure that the second method is being used. Otherwise it is the former.

The Powers Of A Debt Collector

A debt collector is not a legal authority. Do not consider them to be any different from the original lenders

The agents from the collection firm may contact you by any method that is deemed suitable to you. It may be a personal visit, a phone call, an email or even a text message.

Go through some sample letters sent by a debt collector agency in order to get acquainted with the general content of such letters. A quick internet search shall suffice.

You may find that the phone calls have an increasingly threatening tone and sometimes the collectors may try to warn you about legal action. Always insist on written correspondence and do not be daunted as you should understand the limits to their powers. All their legal action must be declared in advance and they cannot lie to you.

If you are seeking help with a debt charity organization, or declare that you are willing to pay on renewed terms, it is rare that the debt recovery organizations go for legal action or that you have to apply for bankruptcy.

Your Mode Of Operation On Being Contacted

Never leave a call or message unreplied. As they are professionals, they would not just go away without getting the job done. By going into hiding or not replying to the messages, you worsen the situation and increase your chances of getting sued.

The agencies always demand what is suitable for their clients i.e. larger installments and quick full and final payment. You should redraw the repayment plan on your own terms and keep in mind what you can afford and what you cannot.

Before deciding how much you can afford, always get in touch with a assisting agency or charity institution. They will not only help you format your letters but also will help in assessing how much you can afford to pay at the moment.

You are free to lodge a complaint if you feel you are being harrassed or disturbed repeatedly by the collection agency.

In case you have been contacted by a collection agency, you might be having some doubts:

Are The Collection Agents Legally Empowered To Enter My House By Force?

A field agent is commonly sent to the debtor's house for collection of debt. You have every right to see their ID. The decision of letting such a person inside your premises is entirely up to you. You have no legal obligation in this regard.

It is advised that you do not panic and make any major cash payments to such a person. Remember that he is not a bailiff or a sheriff. You have every right to send such a person back as he has no right to take anything from your house. You may later decide on a standing order at some amount which is affordable to you. The decision can be made between you and the original lender in written.

In case you wish to pay the agent in cash, make sure that you get a proper receipt. Also be prepared for more such future visits.

Can A Collection Agency Add A Surcharge?

Usually your original lender stops adding interest once your account defaults on the debt. The recovery process is more about getting the stuck money back and less about charging interest on static money.

However, if it is in your contract, the collection agency which has bought your debt may continue to add interest in your amount as you may have decided initiallly with your original creditor. Less commonly, the original creditor may also continue to add interest as per your earlier contract. In all such cases, you may have to pay the interest.

Common Problems Concerning The Debt Collection Agencies

Sometimes more than one collection agency may contact you regarding the same debt. In such cases, you can just contact your original creditor and explain the situation. The creditor would tell you which company they have employed and the other company should be made to stop.

Sometimes both the names may belong to the same company. In such scenarios, all you have to do is look up the address of both senders and in case they are the same, you may request the debt collectors to use only one trading name to avoid ambiguity.

When To Contact The Authorities-

- In cases you are sure that the debt does not belong to you.

- In cases you are not sure about the legitimacy of the company.

- In case you believe you have certain legal remedies against the debt collectors.

Nonetheless, once you receive a message from debt collectors, you should take it as a wake-up call and get your finances in order.

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