If you’re in debt and have gone some time without making up for the missed payments, the person you owe money to (your creditor) might pass your debt to a debt collector or debt collection agency to help them recover what they’re owed.
But can debt collectors take you to court if you still don’t pay what you owe? And how often do debt collectors resort to court action? Finding out you’re being chased by a debt collector instead of your creditor can be daunting, so it’s important to know what to expect.
What is a debt collector?
A debt collector is an individual hired to collect unpaid debts on behalf of a creditor. They can work for themselves as a self-employed debt collector or for a debt collection agency.
They are usually only brought in after the creditor has failed to recover the debt numerous times and can be used to collect a wide range of debts, including payday loans, catalogues, personal loans, income tax, overdrafts, and utility arrears.
Most debt collectors work in one of two ways: by recovering the debt on behalf of the creditor and being paid a percentage of the money recovered or buying the debt from a creditor at a discounted rate and retaining the full amount.
It’s rare for debt collectors to visit you at home – they will usually only contact you by sending letters or calling you. This means that, if a debt collector knocks on your door, you have the right to ask them to leave and request that they only contact you by telephone or letter going forward.
How much debt do you have?
Is a debt collector the same as a bailiff?
The terms ‘debt collector’ and ‘bailiff’ are often used interchangeably, but while they carry out similar roles, they are not the same.
Firstly, a debt collector doesn’t have as much legal power as a bailiff. This means that, like your creditor, they can only ask you to pay what you owe and can’t enter your home or seize your belongings.
The types of debt a debt collector and a bailiff can collect also differ. For example, a debt collector is usually brought into the recovery process to collect smaller consumer debts while a bailiff tends to be used for more serious legal debts and after court action.
It’s important to know the difference between a debt collector and a bailiff if you’re expecting enforcement action. Some debt collectors exaggerate or lie about their legal powers to try and force you to pay, but knowing your rights can prevent you from being taken advantage of.
How does the debt recovery process work?
The debt collection process usually follows the same set of steps, which we’ve outlined below:
1. Your debt is passed to a debt collection agency
If your creditor has repeatedly failed to recover what they’re owed, they might pass the debt to a debt collection agency with more time and resources to chase you for payment.
There is no set period creditors need to wait before getting debt collectors involved but it’s usually not considered until after a few months of missed payments and after they have issued you with a default notice.
2. You receive a written letter
Once the debt has been passed to a collection agency, you’ll receive a written letter letting you know. The letter will ask you to pay what you owe and should include details like the total balance due and the deadline for making payment.
Some debt collectors will threaten you with court action, but they don’t have the legal power to take you to court and can only ask you to repay what you owe.
3. You decide how to deal with the debt
Most debt collectors will ask you to pay the full amount owed and you should always do this if you’re in a position to do so. However, if you don’t have the funds readily available, you should ask to set up a payment plan where you make regular instalments towards your outstanding balance.
Remember, you don’t have to let a debt collector in when they visit you at home. Refusing them entry won’t necessarily stop them from coming back, but it can give you extra time to decide how you’re going to deal with the debt.
How often do debt collectors take you to court (UK)?
If you continually ignore a debt collector’s attempts at trying to recover the debt, they can take you to court. However, they must inform you before they take this step by way of a written letter and it’s usually only done as a last resort.
If you still don’t pay after receiving the first letter, the debt collection agency can file a county court claim and you will receive another letter, called a letter of claim, which you must respond to. The response must state whether you agree to owing the money and whether you plan to repay it in full or in instalments.
The court will then decide how much is owed, how payment should be made, and whether any extra interest or fees should be added. In instances where you don’t agree to owing some or all of the debt, you must state why and provide as much proof as you can in the form of official documents or copies of bank statements.
Failure to respond to a letter of claim before the deadline (14 days) will mean the court isn’t made aware of your financial situation and you could be instructed to repay the debt in full or at a rate you can’t afford.
The Consumer Credit Act (1974) regulates the debt collection process in the UK. It exists to ensure the rights of both sides are protected and prevent consumers from predatory debt collection practices.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
How long do debt collectors have to recover a debt?
There is no set period a debt collector has to collect payment of a debt. In most cases, they will continue chasing you until you repay what you owe or arrange a payment plan to repay the debt in regular instalments.
This is why it’s always recommended to – at the very least – respond to a debt collector when they contact you. Continuing to ignore a debt collector will likely only lead to them ramping up their efforts to get in touch with you.
In the UK, debts are subject to a statute of limitations or limitation period, which is essentially a timeframe outlining how long legal action can be taken to recover them. For most unsecured debts, it is six years.
For example, if you have a credit card debt that you haven’t acknowledged or made a payment towards in over six years, your creditor will have run out of time to take you to court over it and it will become legally unenforceable. However, because debt collection doesn’t constitute legal action, statute barred debt can still be chased by debt collectors.
What rules should debt collectors follow?
There are certain rules debt collectors must follow when recovering debts. Here are some of the things they can’t do when visiting you to recover a debt:
- Discuss your debt with another individual or company (including your family or employer)
- Add interest or fees that are deemed excessive or when the original credit agreement doesn’t allow it
- Use abusive, harassing or insulting language
- Exaggerate their legal powers (e.g. by threatening to send bailiffs or claiming to have been sent by the court)
- Contact you relentlessly or at unreasonable times
- Purposely mislead or lie to you
If a debt collector has done one or more of these things, you have a right to complain by submitting a written complaint to the debt collection agency they work for. They will likely ask for proof that you have been mistreated, so you must be prepared to show this information when requested.
If you’re not satisfied with the response to your complaint, you can escalate it to a higher body, such as the Financial Ombudsman Service (FOS). They will review the complaint and advise you on the outcome, taking an unbiased approach to ensure they make a fair and informed decision.
Can a debt collector chase me for a joint debt?
If you have a joint debt (a credit agreement taken out with someone else that you are jointly liable for paying), a debt collector can pursue both you and the other person for payment. This might happen if your creditor has failed to recover payment from one party and has sought further help to ensure they recover what they’re owed from the other.
When you take out a joint credit agreement, you’ll both be responsible for repaying 100% of the money owed under something called ‘joint and several liability’. This essentially means that each party is jointly responsible for the full amount owed, not just their share (50%).
Therefore, because both borrowers are equally responsible for paying a joint debt, the debt collector can contact both parties separately and are unlikely to stop calling or visiting until they recover payment.
Can I stop a debt collector from contacting me?
Receiving constant calls, letters and visits from a debt collector can cause a great deal of stress, and it’s normal to wonder whether there’s anything you can do to make it stop. However, there are things you can do to stop them from contacting you further.
Firstly, you must send the debt collector a written letter asking them to stop. This letter can also be used to specify that you’d only like to be contacted in a certain way going forward (e.g. by post or phone call).
In some situations, you might be able to apply for ‘breathing space‘ to give you temporary relief from the people you owe. This includes any debts that your creditors might have passed on to debt collectors.
The only other way to stop a debt collector from contacting you is to pay the debt or come to an agreement over how to make payment. Once you have reached a mutual agreement with the debt collector, their job will be done and they should leave you alone.
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What happens if I ignore a debt collector?
It can be tempting to ignore a debt collector in the hope that they simply leave you alone and forget all about the money owed. However, this is extremely unlikely and they will only take further action against you in an attempt to get you to pay up.
One of the main risks of ignoring a debt collector is that you could be instructed to repay the debt in full or in large instalments when you’re not financially able to do so. Other risks include further contact, extra interest or charges, and legal action, which could include a County Court Judgment (CCJ).
Even if you can’t afford to repay the debt, informing the debt collector of your financial situation can help them better understand your circumstances. This might make them more willing to come to an agreement with you on how to resolve the problem.
Similarly, if you’re unsure if you owe the debt you’re being asked to pay, it’s important to verify it as soon as possible. It could be a debt that you’ve forgotten about or a debt that you weren’t aware you had but if you genuinely don’t owe it, ignoring it for too long might mean you miss out on the opportunity to challenge or dispute it.
When do debt collectors give up?
If a debt collector is chasing you for payment of an unpaid debt, it’s normal to wonder when they’re likely to give up and accept that they’re not going to collect what they’re owed.
However, it’s worth noting that debt collectors don’t typically give up until they’ve received payment of the debt or reached an agreement with you over how to recover the debt. In most cases, they will continue calling you, sending letters, and visiting you until they get a response.
Because of this, it’s important to respond to a debt collector when they first get in touch with you and cooperate with them for the duration of the debt collection process. Even if you can’t afford to repay the debt in full, most debt collectors will allow you to make regular instalments until you’ve cleared your outstanding balance.
Conclusion
If your debt has been passed on to a debt collector or a debt collection agency, it’s normal to wonder whether they could potentially take you to court to force you to hand over payment.
The truth is, while it is usually only considered as a last resort, debt collectors can eventually take you to court if you continue to ignore their attempts at getting in touch with you.
In some instances, you might be able to get a debt collector to stop contacting you or change the way in which they get in touch with you. The only way to stop a debt collector from pursuing you is to pay what you owe or agree to make monthly payments for a set period.
