Debt Collection Agency Advice
Avoiding a debt collection agency becoming involved
A debt collection agency operates with the intention of reclaiming debts. The majority of debt collection agencies will operate with the purpose of recovering money for creditor companies for a percentage of the total amount owed.
By arranging a debt management plan, you can help to avoid a debt collection agency becoming involved. Debt management plans are simple to set up and work in the best interest of all those involved, helping the debtor to become debt free (subject to terms and conditions) and the creditor to regain their loan.
A debt management plan is an informal, non-legally binding agreement between the debtor and the creditor. A debt manager will generally accumulate all debts together and negotiate a lower rate of interest with the creditors. A set period of repayments is scheduled and the debtor is encouraged, but not legally bound to meet these repayments.
Debt collectors
Creditors may use a debt collection agency to ask you to pay off the debt.
Debt collectors aren't court officials and don't have the same powers as bailiffs. They can't enter your home or seize your possessions. They can only write, phone, or visit your home to talk to you about the debt and how to pay it back.
Creditors and debt collectors must follow OFT (Office of Fair Trading) debt collection guidance.
Advice about Complaints regarding debt collection advice
Since April 2007 you can complain to the Financial Ombudsman Service about how a lender or debt collection agency has behaved when dealing with your account. You have to follow the lender's complaints procedure first.
If you want to make a complaint, you can contact Consumer Direct. They will give you advice over the phone or by email. They can put you in touch with the trading standards department in your local council if you need more detailed or face-to-face advice.
Consider an IVA to stop debt collection agency staff calling and writing
An IVA (Individual Voluntary Agreement) is different from a debt management plan, as it’s a legally binding contract between the debtor (person owing money) and the creditor(s) (those owed money). An IVA is generally sought if a debt management plan cannot be agreed between the creditor and the debtor.
As an IVA is a legally binding agreement, a licensed insolvency practitioner must be present when it is signed. Failure to meet the repayment deadlines set out in the IVA will result could result in a debt collection agency stepping in to recover any outstanding finances.
Bankruptcy advice for debts over £750
Filing for bankruptcy is usually a last resort for those who aren’t considered for a debt management plan and have no way to finance their debts for the foreseeable future. Those who are unemployed may fall into this bracket.
Although declaring bankruptcy has positives, such as allowing the debtor to become free of creditors chasing payments, lower administrative costs than agreeing to an IVA and creditors are often forced to accept a lower amount than is owed.
However, the negative effects lead people to use bankruptcy as a last resort. All possessions, assets and investments are taken by a debt collection agency to service the debts, negative publicity and any equity will be sold.
Money Advice Direct is an established provider of confidential and non-judgemental debt advice in the UK on serious debt problems. Whatever solution we recommend, honest, best advice is available 24 hours a day, 365 days per year. If you are in debt call us without obligation today on 0800 074 6918 or apply for debt help online and make a clear start today.
Listed below are some of the frequently asked questions on Debt Management Plans
- How do I know whether a Debt Management Plan is right for me?
- What are the advantages of a Debt Management Plan?
- What are the disadvantages of a Debt Management Plan?
- Is a Debt Management Plan a type of loan?
- How long will I have to pay a Debt Management Plan before I am debt free?
- How much does a Debt Management Plan cost?
- How much money will actually go to the companies I owe money to under a Debt Management Plan?
- How do I make the payments?
- If I have a change of circumstance can I stop the Debt Management Plan?
- Who tells the companies I owe money to that I am actually in a Debt Management Plan?
- Will the companies I owe money actually accept a a Debt Management Plan?
- How a will Debt Management Plan affect my credit status with Experian, Equifax and Callcredit, the three main credit reference agencies
- Will a Debt Management Plan stop all the companies that I owe money to constantly telephoning me and sending me letters?
- Will I receive a regular report to inform me that my debts are actually going down?
- After the Debt Management Plan is set will I receive be able to get any additional help and advice?
- After the Debt Management Plan is set up can I still use a credit card or apply for car finance if I budget for it?
- Once the Debt Management Plan has been set up does it mean that I will have to keep paying interest and bank charges?
- Can I include secured loans in a Debt Management Plan, such as car finance or mortgage?
- Can the companies that I owe money to threaten to take my house or flat once that I am in a Debt Management Plan?
- Can I include all my debts in a Debt Management Plan?
- Debt Management Programme
- DWP Debt Management
- Credit Card Debt Management
- Advanced Debt Management Plans
- About Card Debt Management
- Advanced Debt Management Solutions
- Association of Debt Management
- Best Debt Management
- Budget Right Debt Management
- Christian Debt Management
- Consumer Debt Management
- Debt Management can help you make a clear start with your debts
- Credit Card Management
- Debt Collection Agency Advice
- Debt on Credit Card
- Debt Management Advice
- Debt Management Agencies
- Debt Management Agency
- Debt Management Articles
- Debt Management Associates
- Debt Management Centre
- Debt Management Companies UK
- Debt Management Company
- Debt Management Consultants
- Debt Management Corp
- Debt Management Corporation
- Debt Management advice
- Debt Management Credit advice
- Debt Management Group
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
[more...]
DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]