Mara's Musings

This is experience and not professional advice and I would advise anyone to go and check out National Debtline if they are having issues as they are excellent and also supply letter templates you can use to write to the relevant companies.   All of this advice is available on their site and they also have a freefone number 0800 808 4000.  They will give advice and also help you to see the reality of the situation - that most of what you are facing is  hot air with very little to back it up. 

I am not speaking here about priority debts like mortgages, rent, secured loans, council tax and so on.  These are called priority debts for a reason, they must be paid or you could lose your home or in the case of the council tax end up in jail!!  I am talking about unsecured loans, credit cards and so on.  You will notice a totally different approach when dealing with priority debts, there will be none of the threats and posturing you experience from unsecured loan/credit companies because the priority debts do not need to, they really do have the law on their side.  This is not that comforting but it does tell you a lot about the reality of the position of the non-priority creditors.

Most importantly DO NOT ignore the problem, it will not go away.  I left a marriage with over £5K of debt (I know, crap solicitor!) and I know how tempting it can be to pretend its not happening, and feel sick everytime a letter comes or the phone rings.  Accepting the problem is the first step to dealing with it and making it go away.  Get your paperwork out, see exactly how much you owe, how much you have coming in and how much you can afford to repay each company.  By the time debt collectors get involved you have usually already done this, negotiated the stopping of any interest, and a reduced payment but the original company has got fed up managing the debt and passed it on.  (Advice on how to do this)

When a debt collection agency contacts you take some basic initial steps:

• Establish their right to collect the debt.  Make them provide you with the original credit agreement.  This must bear your signature and not be a generic copy of a company agreement.  They must supply this along with a statement of the account within 12 days of request, you have to send a fee of £1 and make a formal request under the terms of the Consumer Credit Act 1974.  A template of the letter can be found on the national debtline site along with many others.  They cannot contact you again to collect the debt until this information has been provided.

• Have they purchased the debt? Make sure they are simply collecting the debt on behalf of the original company.  If they have purchased the debt they are on shaky ground since you have made no contract with them and the debt has been sold to them without your permission.    Do not pay anything over until you have established what the score is on this issue, if you do you will be deemed to have established a contract with them "by performance". If in doubt call the National Debtline people for help.

• Constant telephone calls.  You have the right to control who contacts you by telephone. Write  a simple but formal  letter asking them to "cease and desist" and insisting that they deal with you only in writing, if they continue or just shift the voice calls to automatic messaging tell them you will charge them a fee each time they call you and that you will be contacting the Financial Services Ombudsman to start a formal complaint.

• Never refuse to pay the orginal debt. Always make it clear that you are not refusing to pay the original debt but will only deal with them once you have established who they are and what are their right to the funds ie, once all the legal formalities have been met. They cannot take you to court for protecting yourself against potential fraud.  Courts frown upon companies they consider are  "vexacious litigants" and you have the right to establish with whom you are dealing.  The companies know this full well but may still threaten you with court action.

• Threats of house calls. Write to the company withdrawing any implied right of access to your property, inform them that niether they, nor any individual or company representing them have the right to call at your home, state that any such callers will be treated as trespassers and you will report the company to the financial services ombudsman for harassment and intimidation.  They will not call at the house and if they do you are well within your rights to refuse to talk to them, ask them to leave and shut the door.  They have absolutely no right of access to your home. Never (either by letter or if they turn up) threaten to be or get aggressive to these callers, just keep calm and be assertive, lock the door and ignore them.  If they get aggressive with you call the police.

• Do not get scared, or let them bully you.  The reason they try to collect the debt so aggressively is because they know full well they have little recourse to the law. They also bank on the fact that most people do not know this and are scared.  

• Paying.  Once you get to the point where you are satisfied then issue a financial statement along with an offer - do not be tempted to offer more than you can afford.  If they refuse and say they will take you to court simply reiterate the offer and that you are not refusing to pay but it would be irresponsible to overcommit financially.  State that they may write to you again in 6 months to reassess your financial position.  Again, they do not want to go to court to answer as to why they refused an offer of payment especially as your financial statement shows you have no more money to give.

• CCJs If you already have a county court judgement (eg for council tax) be aware that a bailiff has no right to enter your home despite what they may tell you.  Read more here.  (This does not relate to house repossessions which come under priority debts - seek advice!)  Do not open the door to them at all or they may push past you.  They are not allowed to force entry but can come in through open doors and windows so if you have a Warrant of Execution from the court keep the hatches battened down. Bailiffs these days must be certificated by the courts so in the main are perfectly polite people just doing their jobs so avoid the temptation to get aggressive.  If the bailiff gets nasty which is unlikely, call the police. 

Having suffered at the hands of some quite vicious companies myself for a long period of time following my marriage I know first hand how terrifying the prospect of this stuff can be.  However I cannot stress enough how important it is to get good advice.  Not only do you learn your rights which makes you feel a more secure and thus less of a victim of these bullies, you are able to assert these rights and ensure the companies do not bully you into worsening what is already a dire situation.  The National Debtline are experts, they have seen it all before, and completely non-judgemental and I cannot recommend them strongly enough.