Dealing with Creditors

Taking control of your communications with debt collection agencies gives you a clear path forward.

This guide explains how to find out exactly who you owe money to, what actions lenders can legally take and the practical steps you can use to stop unfair contact or harassment.

How to find out who your creditors are

You’ll need to contact the credit reference agencies. Not all agencies hold all of your creditor information, so you’ll need to contact all three to get a complete picture.

• Experian: Customer Support Centre, PO Box 1135, Warrington, WA55 1EP. Tel: 0844 481 8000
• Equifax: Credit File Advice Centre, PO Box 1140, Bradford, BD1 5US. Tel: 0870 010 0583
• TransUnion UK: One Park Lane, Leeds, West Yorkshire, LS3 1EP. Tel: 0330 024 7574

How can creditors find me?

The resources a creditor can use to find you include information on your credit report, the Driver and Vehicle Licensing Agency (DVLA), voter registration records (the electoral roll), banks and building societies, credit bureaus, HM Revenue & Customs and the Gone Away Information Network (GAIN).

Your consumer rights against creditors

You have many rights as a consumer in relation to what creditors can and cannot do. You can find more details on the Consumer Action website.

The Financial Conduct Authority (FCA) is the main regulator for rules on debt collection, debt management and consumer credit. Many lenders also subscribe to The Lending Code, and you can find details of this agreement online.

What can your creditors do?

Creditors (the people you owe money to) can issue a default notice, then pass your debt to a debt collection agency or sell it to them. However, they can only do this once you have defaulted on your contractual payments. The creditor or collection agency can take county court action and might apply for a charging order if you live in your own or a mortgaged property.

Can a creditor contact me at work?

If you gave the creditor your work number when you applied for the credit, they are entitled to use it to call you. However, if you’ve told them by phone or in writing to remove this number from their system, they must stop. This is especially true if it affects your job or if you aren’t permitted to take private calls at work. If they’re still calling you after you’ve asked them to stop, you can pursue a claim for harassment.

Can creditors take money from your wages?

Creditors can only take money from your wages using an Attachment of Earnings (AOE), and they’ll need to apply to the court to do this.

Can creditors take money from your bank account?

Creditors are unable to take money out of your account without a third-party debt order, and to do this, they have to hold a County Court Judgment (CCJ). If you owe your bank money, they can use the Right to Off-Set (RTO) to recover what you owe. This generally happens when money has gone into your account and the bank takes it to use towards the debt you have with them.

What happens if a creditor sells your debts?

If a creditor has sold your debt, it’s likely you’ll have a debt collection agency contact you to make arrangements to repay the money you owe.

What to do if a creditor takes you to court

You must fill in the County Court form as soon as you receive it, a judgment will be set at an amount you probably can’t afford. When filling out the form, you must enter an amount you can afford to pay each month. Sign the form and post it back to the address provided. You’ll then receive a judgment back with the amount you stated you can afford. If, for any reason, it comes back asking for a higher payment, you can contact the court within 14 days and ask for an N245 form. This allows you to resubmit a budget and a revised offer, but you must pay a £14 fee when you send this form to the court.

What do I do if a creditor is harassing me?

We speak to many people who are dealing with creditors calling them at work or late into the evening. It’s important to know you have rights and there are clear rules lenders must follow.

Are creditors allowed to call me at work or late at night?

While creditors can contact you to ask for payment, they aren’t allowed to harass you. The Financial Conduct Authority (FCA) has guidelines stating it’s unfair to contact you at unreasonable times or ignore your reasonable requests about how you prefer to be contacted.

What counts as creditor harassment?

The law protects you from unfair debt collection practices. Under the Administration of Justice Act 1970 and the Protection from Harassment Act 1997, it’s a criminal offence for a creditor or debt collection agency to:

• Make demands aimed at causing alarm, distress or humiliation.
• Make repeated calls to your workplace or during antisocial hours.
• Falsely claim that not paying your debt will lead to criminal proceedings.
• Pretend to be a court official or bailiff.

How do I stop debt collector harassment?

If you think a creditor is breaking the rules, you can take practical steps to stop them. Start by keeping a record of all calls, visits and threatening letters. Once you’ve gathered this evidence, write a complaint letter to the creditor. Explain that you believe they’re breaching FCA guidelines and the law, ask them to stop and clearly state your preferred method of contact.

If the creditor ignores your complaint and the harassment continues, you can report them to Trading Standards, Citizens Advice or the Financial Ombudsman Service. If a creditor or bailiff ever becomes violent or extremely threatening, you should contact the police immediately.

Making a settlement offer to a creditor

If you receive a lump sum and want to offer this to your creditors, this is called a full and final settlement offer. You must always get your creditors to put in writing that they’ll accept your offer before you pay. Sometimes it might be done as a partial settlement, which is where your creditor has accepted a lower offer than the outstanding amount.

Will a creditor accept my debt solution?

This depends on the type of debt solution you plan to use. With some informal debt solutions like Debt Management Plans, full and final settlements or repayment arrangements, your creditor isn’t obliged to accept your proposed offer of repayment. However, there are some more formal debt solutions (like Individual Voluntary Arrangements, Bankruptcy or Debt Relief Orders) which are legally binding on both you and your creditors once they’re approved.

Can creditors make you bankrupt?

Your creditors could make you bankrupt if you don’t or won’t pay your debts, although it’s more likely that you’d make yourself bankrupt than the creditors making you bankrupt. If a creditor were to make you bankrupt, you’d need to owe them at least £5000, or two or more creditors can join together to reach this amount. The first step would be a statutory demand, giving you 18 days to come to an agreement to pay or set the statutory demand aside. If you fail to respond or they refuse to set the demand aside, you’ll be advised of a date for your bankruptcy hearing. If you’re declared bankrupt, an Official Receiver will be appointed to go through your details and monitor your bankruptcy until you’re discharged.

Get free debt help today

You don’t have to face your creditors alone. Our trained advisors are here to support you. Call us on 0800 316 1833, or start a conversation online and let us help you find a clear path forward.