How to deal with Collecting Agencies? - Debt collection help

Lending institutes get the help of Collection Agencies to recover their outstanding amount. There are some companies which have their own separate department for this purpose.

There is more than 20000 Debt Collecting Agencies and Bailiffs in the United Kingdom. Private and public companies can avail their services to recover their amounts from debtors.

This guide will help you understand how to cope with these agencies when they knock at your door for debt collection.

Whenever a company contacts you, ask them to present their license from the Office of Fair Trading. If the company is not licensed you do not have any obligation to respond.

It is a common observation that some agencies adopt a very professional approach in debt collection while others are very hostile. In the past many people have reported of bad practice and unfair treatment.

How can I deal with the harassment by the Collecting Agency?

  • No matter the Creditor is pursuing you or he has hired a Collecting Company, you should contact the Creditor and report about the unfair attitude.
    You may refer to the terms of Section 40 of the Administration of Justice Act and ask the Creditor to make sure such a thing should not happen in the future.
  • If you are still harassed by the Collecting Agency tell your Creditor that you are familiar with OFT Debt Collection help Guidance.
    Tell them that if you are harassed again in the future you will make a complaint under the mentioned guidance.
  • Be proactive, talk to your Creditors and tell them the way of payment that is comfortable for you. If the Creditors agree and you keep your side of the deal you will not be bothered by the Collecting Agency again.
  • You must contact Police if the Collecting Agency is committing violence, fraud or blackmailing. Police will not take any action in case of harassment only.
  • If you are still harassed by the Creditor or Collecting Agency you can file a complaint at Trading Standards/Consumer Protection Department at your Local Council. If the Collecting Agency is found guilty a fine up to £5,000 can be imposed by the Magistrates’ Court.
  • If you do not get an appropriate response form the Trading Standards you may contact the Office of Fair Trading directly. They do not respond to individual complaints however their Debt Collection Help Enforcement Team will add the information into their list. This information is used to take action against the Creditors who can lose their Consumer Credit License.
  • If your Creditor is a member of a trade association, you may write to them with your complaint about the Creditor’s unreasonable attitude.

Do I have any other Debt Collection Help Options?

Yes, you can prosecute your case yourself in the Magistrates’ Court. However this is an expensive option and you may have to pay huge fees of the attorney and the Court.
Therefore it is best for you to seek professional help before going for this option.

To what Act should I refer to in the Magistrates’ Court?

Once can refer to the Malicious Communications Act 1988. The Magistrate Court may impose a heavy fine. If you have been harassed on two different occasions you may refer to The Protection from Harassment Act 1997, which makes it a criminal offense.

There are different options available if you are in need sort out your financial difficulties. Let us discuss the four most frequently used options one by one:

  1. Debt Consolidation Loan
    In Debt Consolidation Loan you get one loan to pay off all the other loans. If done properly Debt Consolidation can reduce your monthly outgoings up to half.
    Pay attention to the interest rates and length of a new loan, at the end the total cost could be higher.
  2. Bankruptcy
    A Court order declares you bankrupt when you successfully demonstrate that you cannot pay your debts in full.
    When you are declared bankrupt for the first time, usually, your debt will be discharged within one year.
    Bankruptcy is a serious matter, make sure you understand with a professional all its associated implications.
  3. Debt Management Plan
    In Debt Management Plan you formulate a repayment plan with your Creditors. This option is feasible for people with a high amount of outstanding loan, which cannot be paid in full. The repayment plan offers the flexibility of paying an affordable installment every month.
  4. Individual Voluntary Arrangement (IVA)
    The IVA is an approach to eliminate debt in the United Kingdom. It usually covers unsecured loans and Creditors’ approval is mandatory for an IVA acceptance.
    A typical IVA process takes up to five years to complete and all of your unsecured debts are written off by your Creditors.
    IVA is not a DIY approach. When you apply for an IVA, make sure you understand deeply the agreement and all costs involved.

In any case we advise you to seek professional advice. Only a professional could help you to understand the available options depending of your finances.

Highlights:

The first step to protecting your rights is to remember to document every interaction with your Creditors or Debt Collection Agency. Always write down or record what the Lender says to you during phone calls.

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