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Debt Collection

Dealing with debt can be overwhelming, but My Debt Plan is here to help. Our experienced advice on debt collection helps you navigate the complexities of managing your finances. We offer personalised strategies to handle creditor calls, negotiate payment plans, and understand your rights. Whether you’re facing credit card debt, medical bills, or personal loans, our tailored approach ensures you get back on track. With My Debt Plan, you’ll gain access to resources and support that alleviate stress and guide you towards financial freedom. Don’t let debt control your life—reach out to My Debt Plan for the help you need.

May not be suitable in all circumstances. Fees apply read more. Your credit rating may be affected, read more.

For free, independent advice, you should visit to Money Helper via their website.
For free, independent advice, you should visit to Money Helper via their website.

What happens if you miss a payment for a debt?

If you miss a debt payment, it’s important to act quickly. Companies usually inform you about the missed payment and any fees, and may ask why it happened while offering help to make repayment easier.

If payments are missed regularly, creditors may become less flexible. They could take stronger actions to recover the debt, such as marking your account as in default, involving debt collectors or bailiffs, or starting court proceedings like getting a County Court Judgment (CCJ).

What happens if you are missing debt repayments regularly?

Missed payments show up on your credit file, which can lower your credit score and affect future borrowing. However, if your money problems are short-term and you can catch up on the arrears quickly, you may still be able to manage your debts successfully.

Companies you owe money to are entitled to take various actions to recover debts, including:

  • Chase the debt: Companies may contact you through letters or calls to negotiate a reasonable repayment arrangement.
  • Send debt collectors: Although lacking the powers of bailiffs, debt collectors may be employed to pursue payment more assertively.
  • Increase interest and charges: Failure to adhere to payment terms may result in additional charges and higher interest rates.
  • Default the agreement: Multiple missed payments could lead to default status, impacting your credit report for up to six years.
  • Pass the debt to a collection agency: Collection agencies may pursue debts more aggressively through letters, calls, or visits.
  • Apply for a County Court Judgment (CCJ): Creditors may seek legal recourse through the courts if debts remain unpaid.
  • Issue a statutory demand: This step precedes bankruptcy proceedings for debts exceeding £5,000.

It’s essential to understand your rights regarding debt and its repercussions. This awareness enables you to make informed decisions when dealing with debt collectors, bailiffs, or other legal actions.

What is a Debt Collection Agency?

If you’re struggling to keep up with your debts or keep getting payment reminders, debt collectors may soon get in touch.

Debt collection agencies specialise in recovering unpaid debts. In the UK, many agencies exist, and some focus on specific types of debt or industries.

They usually work in one of two ways:

  1. The original creditor keeps the debt but hires the agency to collect it, paying them a percentage of what’s recovered.

  2. The creditor may sell the debt to the agency at a discount, giving the agency full ownership.

Once a debt collector takes over, the original creditor will no longer contact you, and the collector will handle all communication and repayment requests.

The Debt Collection Process:

The approach and timeline of debt collection agencies can vary significantly. Each agency employs its own strategies for debt recovery, often imposing charges for missed payments and employing various methods to reclaim owed amounts.

Failure to meet payment obligations or fully repay a debt can negatively impact your credit score, limiting your ability to get credit in the future.

Difference between a Bailiff and a Debt Collector:

  • Bailiffs and debt collectors serve distinct roles in the debt recovery process.
  • A bailiff, appointed by a court, is authorised to enforce debt repayment and may possess the power to seize and sell your assets or property to settle debts. There are various types of bailiffs, each appointed by different courts.
  • In contrast, debt collectors lack legal powers. They operate similarly to the original creditor, contacting debtors via letters and phone calls. While they may threaten legal action or home visits, they are not permitted to engage in harassment or misrepresent their authority.

Rights of Debt Collectors:

Debt collectors have limited legal powers—they cannot force entry into your home or demand immediate payment. They must follow rules and cannot use threats or aggressive tactics.

However, if debts are ignored, they may take legal action, such as applying for a County Court Judgment (CCJ). Staying in contact with collectors and seeking help with repayments can often prevent this.

If a debt collector contacts you, make sure they are legitimate, know your rights, and explore repayment options. Getting debt advice and setting up a manageable plan can reduce stress and help clear your debts.

Legitimate debt collectors are regulated by the Financial Conduct Authority (FCA) or belong to recognised industry bodies. Always verify their credentials and be cautious of scams—avoid paying cash until you’re sure the agency is genuine. Communicating openly and agreeing on a repayment plan can usually stop debt collection from escalating.

Additionally, debtors should be cautious of scams and avoid making cash payments without confirming the legitimacy of the debt collector. Opening communication channels and negotiating a repayment plan can often prevent further escalation of debt collection efforts.

How we can help you?

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Lets Talk

Tell us about your current debts and one of our experienced and friendly advisors can help you get the ball rolling.

Debt Solution

Dependant on your circumstances and financial situation, we'll let you know if an IVA is a potential solution for you.

We’ve Got It Covered

If you qualify for an IVA, we will take the necessary steps to set up and arrange this for you.

Why our customer choose us?

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Helping you take back control of your finances

Reduce My Debt

Credit Score

Credit Score Pop Up Wording : An Individual Voluntary Arrangement (IVA) is a formal agreement with creditors to repay a portion of your debts over time, but it does have an impact on your credit score and it will be difficult to obtain further credit whilst on an IVA. Once an IVA is approved, it is recorded on your credit report and will typically remain there for six years from the date it starts.
However, it’s important to note this is the case for most debt solutions and your credit score will likely already have been affected by being in debt in the first place.
Once your IVA is complete you will get a fresh start to begin rebuilding your credit rating.

Fees

IVA costs are charged for the preparation of your proposal and the administration of the arrangement for the full term (usually 5 years) these costs are charged from the monthly contributions you make into the IVA and are not in addition. Costs will only be recovered on approval of your arrangement and once you commence making payments to it. The fees for preparation of the proposal to creditors and calling the meeting for creditors to vote on its approval are called nominees fees, the fees for running the arrangement once approved are called supervisors fees. There are also some expenses incurred in the running of the arrangement such as the registration fee and the statutory insurance that needs to be taken by law, these are called disbursements. For our arrangements, the total of all of these is £3,650 although this may be adjusted by creditors when they vote on whether to accept. No matter what the end total of costs come to, you can be rest assured that these will be taken from the monthly payment we agree with you.