Debt collection in the UK is a highly regulated space, and can only be carried out by a Debt Collection Agency (DCA) that is registered with the Financial Conduct Authority (FCA). DCAs are usually hired by third parties to collect debts on their behalf.
DCAs are regulated by the FCA and need to follow certain rules when they are recovering a debt. It is, therefore, important that you are aware of what a debt collection agency is permitted, and not permitted to do, when attempting to recover a debt from you.
What are debt collectors permitted to do?
Contact you regarding your debts – A debt collector has every right to contact you in regards to your debt. They can either contact you by phone, mail or by house visits.
Show up at your home – Debt collectors can show up at your home and ask you about your debts. They cannot, however, forcefully enter your house.
Take you to court – If you do not pay, a debt collector may take you to court.
What should I do if a debt collector contacts me?
Firstly, don’t ignore them. They’re more likely to take further action if you choose to ignore their calls or letters. If you can’t afford to pay them what they’re asking, you should offer to pay them what you can realistically afford. You may be able to come to an agreement with a debt collection agency on a repayment plan, even if it is a small amount each month.
What can I do if I can’t afford to pay a debt collector?
If you’re struggling with problem debt or you’re unable to pay your creditors or debt collectors, then you should consider contacting a professional debt solutions company like Debt Movement to discuss your options. There are a variety of informal debt solutions available to help you manage your debt, including a Debt Management Plan (DMP) and a Debt Consolidation Loan.
There may even be a formal debt solution available to help you manage your debt, like an Individual Voluntary Agreement (IVA), Debt Relief Order (DRO) or Bankruptcy which will prevent your creditors from contacting you and could enable you to write-off a portion of your debt.
What is an Individual Voluntary Arrangement (IVA)?
An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their creditors. whereby you agree to pay back what you can afford in the form of a monthly payment, typically for a period of five or six years. Thereafter, any unsecured debt remaining will be written off.
If an IVA is an appropriate solution for you and is approved by your creditors, you can finally relax in the knowledge that, as long as you make your single, affordable, monthly repayment, your creditors cannot contact you or take action against you for your outstanding debt.
To qualify for an IVA, a debtor must have:
- A debt level of at least £5,000
- At least two lines of credit
- Disposable income of £85 per calendar month
At Debt Movement, we know that bad debt happens to good people, and sometimes all you need is a little help to get your life back on track. Debt Movement is here to provide you with that help – all you need to do is take the first step and get in touch with one of our professional debt specialists.