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Understanding the debt collection process

When is the Debt collection process applicable?

The debt collection process is employed when you fall behind your promises to pay a debt. Usually, the creditors may initially try to ask for the payment, but on declining to pay, a debt collection agency may be used.

The Office of Fair Trading has laid-out guidelines which must be followed by debt collectors. The process ensures that both parties know their rights and obligations before the agents visit you.

The debt collection process

Usually, the debt collection process follows these guidelines:

  • The creditor makes calls and attempts, through letters, to recover the money from you. If you do not respond to the appeals to pay the debt, the creditor can pass your negligence to pay a debt collection agency.
  • The creditor may, in addition, send out default notices if the said debt was being regulated by the consumer credit Act. Normally, the maximum numbers of default notices you can receive are six.
  • If the debt still remains unpaid, the creditor may sell out the debt to a collection agency. The debt collection agency makes attempts to recover the money on behalf of their client using monthly or weekly arrangements. These appeals are made through letters and phone calls.
  • On the other hand, the creditor can use a court of law to file a claim of payment. At this point, the debt collection process can be handed over to court bailiffs who will then, try to recover the debt. The court may declare you bankrupt if you fail to pay your creditor via the bailiffs.

Additional advice

For further information and in-depth clarification of the above procedures, a visit to the Office of Fair Trade website can help a great deal. Here, you will get the every updates on the debt collection process and debt advice consultation. To avoid the embarrassment of debt collection by agencies, it is wise to repay your debtors promptly.

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