How to Respond to a Debt Collection Letter?

Written by Will Lyon on 20 May 2019

Debt collection letters are the most common form of contact used by creditors to remind you of unpaid debts. You may find that if you’ve missed multiple payments, these letters start to pile up. These should not be taken lightly, and acting on one immediately is always the best course of action. Here’s how you should respond to a debt collection letter.

Know Your Rights

Debt collectors have been known to employ a number of tactics to pressure you into paying without question. This is because the aim of the creditors or debt collectors here is to retrieve the debt and close the case as quickly as possible.

Some common tactics used by creditors and debt collectors include:
  • Claiming that you have a minuscule amount of time left to repay your debt before proceeding with legal action.
  • Confusing you with legal jargon.
  • Threatening bailiff or ‘enforcement agent’ tactics.
  • Immediately stating your debt has been passed to a third party debt collector.

It’s important to understand that you have 30 days from receiving your first debt collection letter to act upon it, however urgent the debt collectors may claim it is. Furthermore, if you consider it to be invalid, you are well within your rights to dispute the debt in question.

I’ve received a debt collection letter, what’s the next step?

If you’ve been sent a letter from a debt collection agency, you should open it immediately; regardless of how many you’ve received. Furthermore, debt collection letters sent in quick succession of each other may have constantly changing deadlines. As a result, the consequences of ignoring or discarding any of them could be severe.

If you have only missed one payment, the debt collection letter will most likely be from the original creditor. However, if you continue to ignore reminding letters, emails and other forms of communication, the debt may be passed on to a debt collection agency.

Responding to a debt collection letter depends on the type of debt your creditors are claiming you owe. If you feel the amount of the proposed debt is correct and you can afford to pay it, do so. This will be a sufficient form of response and should halt any collection activity. Before this however, it’s always a good idea to check the Statute of Limitations. It can have many different implications for many types of debt.

What is the Statute of Limitations? 

Concerning unsecured credit debt, the Statute of Limitations states that if the debt has been outstanding for 6 years, it becomes Statute Barred. This means by law, the lender has run out of time to collect the debt, meaning the debt collection agency has no right to request payment. Moreover, you have no legal obligation to pay it.

Even if a debt is statute barred, it does not mean it has been cleared completely. It may still appear on your credit report as a debt that has not been made. Furthermore, a creditor may still take you to court, in which case they will have to prove the debt is not statute-barred.

Under no circumstances should you suggest the debt might be yours if it isn’t. Doing so could damage your claim in the event you need to dispute the debt. Furthermore, if you admit the debt is yours it could reset the Statute of Limitations, making a void debt valid once again.

If you’re unsure about whether or not your debt might be affected by the Statute of Limitations, speak to Citizen’s Advice today on 0344 411 1444.

If you’re worried about how to respond to a debt collection letter, or feeling unsure about debt in general, get in touch or visit our debt solutions pages for more information on managing debt. You can reach our team of trained advisers on 0800 280 2816.


Filed under Living in Debt

This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

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