Debt collection help

Advice and help on debt collection

Money Advice Direct has been offering debt collection help to the public for over 15 years.

There are over 20,000 debt collection agencies and bailiffs in the UK collecting debts of private and public companies. Some of the debt collection firms are more aggressive that others. If you are contacted by a debt collection help company, always make sure they are licensed by the office of fair trading.

In an ideal world the purpose of a company offering debt collection services is to collect debts quickly in a professional manner. Unfortunately the emergence of aggressive debt collection practices has led to many complaints and reports of bad practice. There are, however, some, decent debt collection firms that offer debt collection help have signed up to "The Better Payment Practice Code"

Better Debt Collection Help Practice

The Better Payment Practice Group was established to promote a better debt collection help practice within the UK and urges all debt collection help firms to adopt a responsible attitude to paying on time. Debt Collection help companies can support the work of the Group by signing up to the Better Payment Practice Code, and agreeing to uphold the four cornerstones of prompt payment:

1. Agreeing debt collection payment terms at the outset of a deal and stick to them
2. Explaining debt collection payment procedures to suppliers in an effort to help them
3. Paying bills in accordance with any contract agreed with the supplier or as required by debt collection law
4. Telling suppliers without delay when an invoice is contested, and help to settle debt collection disputes quickly

Options if you are in need of debt collection help

IVA - Individual Voluntary Arrangement

The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Please note that an IVA is subject to creditors approval. Please note that for consumers considering an only unsecured debts are to be included e.g credit cards, unsecured loans and bank overdrafts. Please note that at the end of the period those debts that are not included such as secured debts, Government fines and child support payments will remain to be outstanding.

Please note that for consumers considering an Individual Voluntary Arrangement (IVA) in most cases creditors will be prepared to write off no more than 70% of a debt and in some cases 60%. Also note all customers can achieve the stated 'write-off' because every case considered is different.

Bankruptcy

Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order

Debt Management

Are you struggling to pay credit cards, loans, store cards or catalogues? Would you like someone to help sort out your payments and talk to creditors for you? Would you like to be able to pay one affordable amount to all your creditors each month? If this sounds like you, a Debt Management Plan may be just the thing.

Debt Consolidation loan

Consolidate debt and reduce your monthly outgoings by up to half with a debt consolidation loan

Trust Deeds in Scotland (PTD)

A trust deed or protected trust deed is a legally binding debt repayment agreement for residents in Scotland who have debts above £8000. The trust deed or protected trust deed is only available in Scotland and lasts no longer than 3 years. After this period the remainder of the debt is written off leaving you absolutely debt free (subject to terms and conditions).

Please note that for consumers considering a Bankruptcy Order, Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD); that although the consumer may become debt free (subject to terms and conditions) at the end of the Bankruptcy, IVA or PTD period, the effect on their credit rating is likely to remain on file for 6 years. In addition the consumers / debtors name, address and birth date will become public knowledge on the governments “Individual Insolvency Register”. The individual insolvency register (insolvency.gov.uk/eiir/) allows anyone to check, quickly and easily, if someone is bankrupt or has taken out an "individual voluntary arrangement" (IVA).

Please note that for consumers considering a Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD); if the consumer is a property owner and there is sufficient equity in their property the supervisor of the IVA or PTD may require the debtor, to revalue their home and realise the equity to pay off some or all of the debt at some point in the procedure. Please beware of debt advice firms who not state that with an IVA and in a PTD the supervisor may require the debtor, if they are a homeowner, to revalue their home and realise the equity to pay off some or all of the debt.

 

How to deal with harassment by your creditors

• The first step is to write to a creditor and outline your concerns about the company’s behaviour. Inform them that you are familiar with the terms of Section 40 of the Administration of Justice Act and ask that the creditor takes steps to avoid similar occurrences in the future.

• Tell your creditors how you would prefer to be contacted and ask that they confirm their agreement to this. A letter at this stage may avoid the need to take further action against the debt collection help company.

• Tell them you are aware of the OFT Debt Collection help Guidance and that you will consider making a complaint about their behaviour under the guidance.It is usually difficult to persuade the police to prosecute in cases of harassment unless a more serious offence such as violence, fraud or blackmail is also involved. Normally debt collection complaints should be made to the trading standards/consumer protection department at your local council.

• They should investigate whether an offence has been committed and whether prosecution is appropriate. The penalty is a fine of up to £5,000 in the Magistrates Court. Also a conviction is likely to provide evidence that the creditor is no longer a ‘fit and proper person’ to hold a consumer credit license and carry out a debt collection help role. If Trading Standards will not act it may be worth contacting the Office of Fair Trading directly. The OFT does not usually take up individual complaints but their Debt Collection Help Enforcement Team collects information that can be used to take action against creditors who can lose their consumer credit license. The creditor may be a member of a trade association with a code of practice. You could find out if your creditor is a member of a trade association and write to them with your complaint.

Other Debt Collection Help Options

Another alternative is for you to pursue your own prosecution in the Magistrates Court. This could involve considerable cost so you need to obtain proper legal advice first. BT have a new service called "Choose to Refuse" which might help if you are getting a lot of calls from an unpleasant creditor. You have to key in a pin number after a call.

The caller will then get an automated message if you don’t wish to take their call when they ring. The cost of the service is £8.00 per quarter. If you receive a telephone service from another provider, contact them and ask if they have a similar service.

You could refer to the Malicious Communications Act 1988 - This deals with the sending of letters or articles for the purpose of causing “distress or anxiety”.

A person found guilty can be fined in the Magistrates Court. To prosecute successfully, the letter or article sent would have to convey:- A message which is indecent or grossly offensive A threat; or Information which is false and known or believed to be false by the sender.

The Criminal Justice Act & Public Order Act 1994 Section 4a makes it a criminal offence to cause “Harassment, alarm or distress” with intent by using “threatening, abusive or insulting words or behaviour”

This can only be an offence if it happens in a public place not in your own home. The police would need to be contacted and prosecute for this offence.

The Protection from Harassment Act 1997 makes it a criminal offence to harass people and put “people in fear of violence”. The harassment must happen on at least 2 separate occasions. The police would have to agree to prosecute for this offence.

All debts start life under control, but things can change. That’s when you need debt help and the best advice on which debt solution would be right for you. You may also want to know what’s involved in an IVA (Individual Voluntary Arrangement), Debt Consolidation, Debt Management, Bankruptcy or other financial advice. If you need help or advice about debt collection please feel free to contact us on 0800 074 6918

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