Debt Collection Practices and Consumer

About collection

When a person defaults or pays less than the monthly agreed contractual payment to their creditor, the account and outstanding amount is immediately passed to internal arrears or debt collection department. Once the account is with the collection department, the company will make every effort to bring the account up to date with payment. You will be contacted to evaluate your current state of affairs. In the initial stages most companies prefers to handle the collection by their in house collectors.

You will be contacted by phone, text, email and by post and you will be pressured to pay the arrears to bring the account up to date with the payment.

When internal or in house collection fails

When this situation worsen and the collection period keeps getting extended or unable to reach a mutual agreement, your account may be passed on to an outside debt collection agency to retrieve the money.

The most common reason is when there is an issue with contact or there is no response from the client.

These contracted firms must work within the same legal guidelines as the creditor and cannot violate these laws with methods such of intimidation or threats whether it is physically, verbally or mentally.

You will usually receive communication to inform you that the full outstanding debt balance is needed to be settled immediately. The collection agency will threaten you by saying serious action will be taken against you if the debt is not paid in full. This will be the initial stage before further action is taken against you. It is vital you respond explaining your situation and include a proposal for repayment along with what budget you have.

Next step in collection

If you receive County Court Judgement it not a necessity that you attend a court hearing if your circumstances prevent you as long as you have returned all necessary paperwork that is relevant to your case within the specified time and your budget you have provided to the court is a based on your actual income and expenditure figures.

If you do not keep up the repayments that you have agreed, further action can be taken against you. If you fail to make payments on a County Court Judgement and are in employment you could find yourself with an attachment of earnings order against your name. If you are issued with attachment of earnings, efforts will be made to contact your employer to deduct the instalment amount before your wages have been paid to you. This deduction will then be used to pay the existing debt.

When a situation gets worse

If you fail to keep up the payments whilst under a County Court Judgement the collection company or the creditor have legal rights to instruct bailiffs to recover the outstanding amount. In most cases this is the action taken if the person is unemployed or self-employed but not managing to make the payments. Bailiffs can also be used when a person fails to respond to any letters from the courts trying to obtain additional information on their current position.

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