Get to know your rights when it comes to debt collection and the difference between a debt collection agency and bailiffs.
Help with Debt Collection - Know Your Rights
When it comes to debt collection, it’s important to know your rights and understand the process to ensure that you don’t slip further into debt or lose assets of value. If you miss one debt payment, it’s unlikely you’ll have bailiffs knocking at your door. But if you consistently miss debt payments, then it may be a different story.
Read on to find out more about debt collection agencies, the debt collection process and for help with debt collection.
What is Debt Collection?
What Happens When You Miss a Payment?
If you miss a payment or fail to make a payment on time, it can negatively impact your credit score. If this happens regularly or several times consecutively, your creditor may send your debt to a debt collection agency.
Getting Help with Debt Collection
What Is a Debt Collection Agency?
A debt collection agency is a company that specialises in helping creditors retrieve the money that they are owed when the repayments aren’t being made.
Sometimes your debt is sold or “assigned” to the debt collection agency when your account has sufficiently defaulted. This makes the debt-collection agency the legal owners of the debt. Other times, your creditor will just be using the debt collector to contact you, in which case the debt-collection agency will receive a percentage of whatever they collect from you.
The letters you receive will state which method is being used, but you can usually tell because, if the payment is still being made to the original creditor, then it’s likely that they still own the debt and are just using the agency to collect what is owed to them.
What Is the Debt Collection Process?
Creditors will all react to arrears and missed payments in different ways and on different timelines, so it’s difficult to say exactly when you should expect to hear from debt collectors. There are some general stages that they all go through though.
- When you’ve missed one to two payments:
Your creditors will get in touch themselves to remind you to pay the missed payment and any arrears. They may even suggest moving the direct debit or standing-order date if it was a failed automatic payment.
- When you’ve missed three to four payments:
Your creditors will begin to be more forceful with their demands for payment. They may file a default on your credit file and close your account with them. This is the point that they are likely to pass your debt to a debt-collection agency.
- When you’ve missed five or more payments:
By this time you will have received a lot of calls and letters from your creditors, and they will likely have passed your debt on to a debt-collection agency. Your credit file will most certainly have a default registered by this point, and some creditors may apply for a county court judgement (CCJ).
If you are worried at any stage about having missed payments, or you are about to miss a payment for the first time, contact Debt Movement, and get help with debt collection and guidance on how to get your finances back on track.
What Is the Difference between a Bailiff and a Debt Collector?
There is often confusion surrounding the differences between debt collectors and bailiffs (also known as enforcement agents). The biggest difference between the two is that a debt collector doesn’t have the same legal powers as a bailiff.
A debt collector works on behalf of a creditor or agency, and it’s very unlikely that they will visit your home. The most that a debt collector can do is ask you to make a payment or come to a payment arrangement — they can’t seize assets or force you to pay.
A bailiff, often now called an enforcement agent, does have the legal power to collect a debt owed to a private company. They usually work on behalf of the council to collect debts such as county court judgements, council-tax arrears and parking fines. They can legally visit your home and remove goods to sell them to pay off debt.
What to Do If You Are Contacted by a Debt Collection Agency?
If you have been contacted by a debt collection agency, the first thing you should do is contact them back. They will escalate matters if they are ignored. The next step is to propose a payment arrangement that you feel is reasonable and you can afford to pay every month.
What Are My Options for Managing Debt?
If you feel as though your debt is becoming overwhelming and you’re struggling to keep up with payments, contact Debt Movement today or request a free call-back. Our friendly and professional team can help you to find the right debt solution to suit your needs and get you back on the right track.