Talking to debt collectors
Creditors aren't likely to call in debt collectors if you miss one payment. Many have their own debt collection departments to handle short-term issues, and will only turn to external debt collectors if they can't reach an agreement with you, or if they think your payment problems are likely to go on for some time.
They might employ a debt collector to collect the money for them. Or they might sell the debt to a debt collector, which means you'll owe the collector, not your original creditor.
Talking to debt collectors is just like talking to creditors, although they're probably more used to dealing with people in financial trouble. They have to follow the same guidelines as creditors, and should be prepared to consider any realistic repayment plan.
Talk to them about your situation, tell them what's going on and about any dealings you've had direct with your creditors, and provide them with a budget. If you've not done so already, you should read the sections about budgeting and talking to creditors.
If a creditor or debt collector thinks it's necessary, there are quite a few legal steps they could take to recover a debt, depending on what kind of debt they're dealing with. For more on priority and non-priority debts, click here.
The Office of Fair Trading (OFT) has written guidelines about debt collection. Click here and see section 2 - 'unfair business practices'.
If a creditor or debt collector starts threatening taking legal action, you should seek professional help or advice. It could save you a lot of time, money and worry. For example:
- If a creditor gets a judgment against you, you will probably have to pay their legal costs and fees.
- A County Court Judgment (CCJ) will stay on your credit file for 6 years, which can make it harder (and more expensive) to get credit.
Many specialists provide free debt advice, which might be enough to help you get your finances back in order.
If that advice isn't enough, you may wish to look into professional debt solutions.