People that are in debt are often scared of debt collectors, but in fact (unless you have borrowed money from a loan shark or the criminal underworld) they have very little to worry about. Debt collection protection laws exist in many countries (certainly in the UK) and actually give very little power to the debt collector and a lot of protection to the debtor.
The best idea if you are experiencing problems with debt collectors is to seek qualified advice since the range of rules per country/state are very complicated and depend on many factors. There are some general principles that apply to most debt collection protection laws:
1. Debt collection agencies are not allowed to harass debtors. Activities that constitute harassment vary from place to place but would typically include calling too frequently or at unusual hours.
2. Revealing the debtors situation to other people (employers etc.). Debt collection agencies are supposed to take all reasonable steps to ensure that their actions do not alert other people to the debtors situation. This would include speaking to your boss at work or someone that lives in your home.
3. Using abusive language. Deb collection agents have to deal with you in a professional manner. Petty insults and bad language are not tolerated.
4. Misrepresenting their powers or actions that they are going to take. Unfortunately debt collection agents will frequently imply that they are going to take money direct from your employer if you don’t agree to pay them. This is completely untrue and illegal since they cannot do this without further legal action.
5. A debt collection agent that visits your home has no right to speak to you and no right to enter your home. In the UK it is only bailiffs that can sometimes do this, and even they have no right to force entry into your home in most cases.
6. I’m not sure whether this last point is against the rules (this site is only based on my personal experience) but beware of debt collection agents that try to get you to stop/reduce priority debt payments (mortgage, rent, food, tax, fines) to be able to pay them some money. Some will try because they don’t really care what trouble you get into.
If you feel that any debt collection agent that you speak to has broken the rules then your first action (other than getting some professional debt advice) should be to write a letter to the collection agency involved stating what they have done and that you know that it is illegal. This will stop the activity in most cases, but if it does not then you really do need to get some qualified free debt advice.
Tags: Debt Advice, debt collection, Debt Problems, Debt Solutions
photo credit: Casey Serin
When you first get into a debt problem situation with unsecured debt, you may have picked up the advice that you should notify all your creditors about your problems. I’m sure that this is a good idea, but don’t expect it to change the way that your creditors deal with you. In most cases they will pass your details to their own debt collection department or even an external debt collection agency that will pester you endlessly over the phone and by letter. It doesn’t matter if you told them 2 days ago that you could not pay, they will still phone again just to make sure that you can’t pay now (and to keep the pressure on).
How You Can Turn the Tables on Debt Collection Agencies
Most people don’t realize that you do not have any obligation to speak to your creditors about your debt problem. With the exception of secured debt such as your mortgage, speaking to them doesn’t usually change the outcome. Creditors will follow their own debt collection procedures more or less whatever you do. Once you have notified them you have a problem your time is much better spent considering how you are going to resolve the situation (e.g. Debt Management Plan, IVA, Bankruptcy).
If you dread picking up the phone then there are things that you can do.
1. Use your answering service! Most phone companies provide a free (or very cheap) message-taking service. Get into the habit of not picking up the phone and let whoever is calling leave a message. When you listen back then delete the message as soon as you work out that it is from a debt collection agency.
2. Change your phone line (through your service provider) so that it doesn’t accept callers which withhold their number. Most debt collection calls will originate from large call centers that have the “number withhold” set. Using this tactic will cut out a surprising number of calls.
3. Change you number to an ex-directory one. Make sure if you do this that your own number is set to “withhold” otherwise people will gradually get to know it. Do not put your number on any official forms of any kind.
If opening the morning post is a distressing experience for you then get into the habit of scanning the top part of any letters so that you can work out whether it is from a debt collection agency. If it is, then throw it away without reading it! Most of what it contains will probably be unsubstantiated threats and lies anyway so why depress yourself. Do keep any eye out for any court documents, as these do need urgent attention.
If someone does call at your house to try an collect the debt (and for most debts this is extremely unlikely) then get them to establish exactly who they are. If they are a debt collection agent you are under no obligation to speak to them. If they refuse to leave your property the they are actually trespassing! If they are a bailiff you have to be a bit more careful. For most personal debt they do not have the right to enter your property. In fact, it is vital that you do not let them into your own property (or leave any doors unlocked or windows open that they could get through). They cannot push past you when you are standing at the door but if you let them in or they gain access through an unlocked door or open window then they can start removing your goods. It is worth stating again – NEVER LET A BAILIFF INTO YOUR HOME FOR ANY REASON. They will sometimes try and say that they need to use your phone or some other trick to gain access. Don’t fall for it.
The idea of turning the tables on debt collection agencies is not to enable you to ignore your debt problem. If you ignore it for long enough it will get to the stage where drastic legal measures are taken. You should use the breathing space given by these techniques to consider what the long-term solution to your debt problems is going to be, and get some good free advice.
Tags: Debt Advice, debt assistance, debt collection, Debt Solutions
If you have a problem with debts you need good legal advice. However the last thing that you need is advice that you have to pay for. It is true that advice on debt relief is a specialist area requiring skills/qualifications, so how are you going to get his advice free? Fortunately there are charitable organizations that will provide free advice. There are also companies/legal advisers that will provide free advice initially in the hope that you will sign-up for something they can charge you for later.
Charitable Organizations Providing Free Advice For Debt Relief
In the United Kingdom there are two main charitable providers of free advice on debt relief:
1. The Citizens Advice Bureau. Many CABs will have specialist debt case workers that can provide top-quality free advice. However there may be a a waiting list to see the debt case worker, as they are very much in demand at the moment. You are definitely not on your own with your debt problems. Although the other workers in the Citizens Advice Bureau will be able to offer general advice on debt problems you do really need to see the specialist debt case worker (who should be a qualified money adviser). After having given advice they should be able to negotiate with your creditors on your behalf if this is appropriate to your situation.
2. The Consumer Credit Counseling Service (CCCS) is a non-profit making organization that is funded by contributions from the credit industry. It can offer advice on your debt situation and will negotiate and administer a Debt Management Plan for you if this is an appropriate solution.
Commercial Organizations Offering Free Advice For Debt Relief
Many commercial organizations offer free introductory consultations that can help you to decide on the best course of action. It is always worth remembering that their advice might be slightly biased towards the solution that they are selling.
In the United Kingdom Solicitors will often offer a free initial consultation. This can often be of limited use because it is not long enough to discuss your options in any detail. You would quickly find yourself having to pay for additional time. Also legal professional are not always best places to advise you on debt problems. They are familiar with the law but not necessarily the way that the laws are applied in practice.
Companies that offer either Debt Management Plans or Individual Voluntary Arrangements will sometimes take you through the initial process of identifying all of your debts, income, and outgoings. They do this so that they can assess whether you are suitable for the particular debt management solution that they are selling. As long as you are aware of this then they can provide very useful advise even if you (or they) decide that their debt management solution is not suitable for you.
Tags: Debt Advice, debt relief, Debt Solutions
