Debt collection is the process of recovering money owed to a creditor. If you’ve fallen behind on your payments, your creditor may pass or sell the debt to a debt collection agency if they’ve been unsuccessful at collecting payment themselves. Debt collectors can ask you to repay the debt, but there are certain rules they must follow during the debt collection process.
If you’re contacted by a debt collection agency, you should check that the debt is yours and that the amount being requested is correct. You can get in touch with the debt collection agency to discuss your circumstances and, where appropriate, agree on an affordable payment plan.
Debt collection itself doesn’t appear on your credit file as a separate entry, but the missed or late payments will be recorded and can affect your credit rating. If the debt progresses to court and a County Court Judgment (CCJ) is issued against you, this can also remain on your credit file for six years.
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County Court Judgments (CCJs)
A County Court Judgment (CCJ) is a court order issued in England, Wales, and Northern Ireland when a creditor takes legal action to recover money they believe you owe. If you receive a claim form and do not respond, or a court decides you owe the debt, a CCJ can be registered against you.
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Bailiffs
Bailiffs are authorised agents instructed to collect unpaid debts on behalf of creditors. They may become involved when you haven’t paid a debt, and your creditor has obtained the legal authority to enforce it. Depending on the type of debt and how many times they have visited, bailiffs may be able to visit your home, ask you to make a payment, or take control of your belongings to recover the money you owe.
Struggling with debt collectors?
Our advisors will explain the pros and cons of each option, including any risks, costs, and impact on your credit file, so you can choose the solution that’s right for you.
