Most people are thrown into a blind panic when they hear the words ‘debt collector’, and if you are receiving endless calls or letters from a Debt Collection Agency (DCA), although you might be tempted to ignore them, this is not a good approach as they are unlikely to stop contacting you.
If you have been in arrears for some time with your lender, and especially if you have been issued with a default notice, it is highly likely that your debt will either be sold or managed by the DCA in order to obtain repayment of funds. Either way, the DCA can make a decent profit from your debt and as their reputation dictates, they do not give in likely when it comes to tracking you down and getting you to pay.
However, even though you may feel under attack by what seems like a military invasion, there are some steps that you can take to ensure you can calmly and sensibly tackle the problem.
Don’t ignore the DCA but stay calm
Ignoring the calls simply doesn’t work so it’s best to take the call and calmly find out where they are calling from, why they are calling and how much money you supposedly owe. Do not give out any personal details until you have checked everything out and only deal with them in writing to ensure you have a record of every conversation and can document exactly what has been agreed.
Double check you owe the debt
Sometimes debt agencies don’t have a lot of details about their debtors and you could be mixed up with someone else with the same surname. Mistakes on the part of DCAs are far from unheard of so ensure you actually owe the debt by checking your credit report online.
If there is no proof, then you won’t need to pay anything. If you do owe the debt, then you need to figure how you can pay it back in an affordable manner.
Know your rights
Although the mention of debt collectors can sound scary, they do not have the same power as the courts or bailiffs – they certainly can’t enter your home and take your possessions. If a debt has been lingering for some time, then court action could be taken but usually this can only occur within six years of the original loan date.
Your original loan should spell out what the interest rate will amount to should you default or in the event it is passed to a third party. For absolute certainty, check the terms and conditions of your original loan or credit card.
If you are unresponsive, the DCA will not hold back and action could escalate quite quickly: they could apply for a CCJ or worse still, make you bankrupt. It is much better to keep the communication open and provide a realistic schedule of repayment that works for you. Sometimes it is even possible to negotiate a reduced total amount.
We can help
Irwin Insolvency has been helping businesses and individuals deal with debts for many years. If you would like additional support and advice to get you through your debt collection process, call 0800 009 3173. We’re ready to help.