Debt collection agencies
Many creditors don’t want to collect reduced payments and often pass accounts to debt collection agencies.
Collection agencies are companies that specialise in buying and collecting debts. They either buy the debt from the original creditor or are paid a percentage of the amount they collect.
Sometimes a collection agency will say that a debt collector is going to call at your house in person; but this is rare as home visits are more costly for the collection agency than letters or phone calls.
It’s important to remember that debt collectors who call at your house aren't bailiffs and they can’t:
- Enter your house or take any goods. You don’t have to open the door or speak to them if you don’t want to
- Discuss your account with anyone else in your house and they must leave if you ask them to
- Act in a way that’s threatening or intimidating and they should always carry photographic identification
For more information on how to deal with difficult creditors you can refer to our section on harassment.
Debts being passed to another company
If one of your debts is passed to a debt collection agency, let us know so we can start to pay them directly. We’ll let the debt collection agency know that you’re on a DMP with us and send them a copy of your budget, along with your offer of payment.
Visit the My Debts page to tell us if a debt has been passed to a debt collection agency.
In most cases, the agency will stop interest and charges but there’s no guarantee that they will.
Solicitors
You might receive letters from solicitors while you’re making reduced payments. This doesn’t necessarily mean that court action is going to be taken.
Solicitors become involved in debt collection for a number of reasons:
- The solicitor is acting as a collection agency. This is likely to be the case if the letters are asking for payment to be made to the solicitor. You should treat them just like a collection agency.
- The creditor may be intending to start court action. This is much less common than the reasons above.