Debt Collection Process
Different creditors and lenders have different methods of reclaiming money they are owed. As much as we’d like to, we can’t outline exactly what will happen when you fall into arrears. However, when you have fallen behind on an unsecured debt the repercussions generally follow a similar pattern:
What Happens When You Fall Behind on Debt
Stage 1: When your creditor realises that you have fallen behind on your payments they will send you a letter or try to phone you. They will notify you of your arrears and ask you to pay back exactly what you owe.
Your creditors may treat you with some compassion at this stage and ask if your circumstances have changed. If you are struggling with debt you should take this opportunity to ask how the creditor can help. They do not want you to default as it is unlikely they will receive the majority of what they are owed.
Stage 2: After missing bills repeatedly for three or four months things will start to get worse and your creditors will very likely be less understanding of your position. As their tone changes, the lenders might start to outline further action that they could take in an attempt to threaten you.
Some creditors might send doorstep collectors, but they have no more power than the people phoning you. They are not bailiffs and you can ask them to leave your property or refuse to answer the door.
If you do not come to some sort of arrangement with your creditors your accounts will start to default. This will tank your credit rating which will make managing your money in the future incredibly difficult.
As your accounts start to default you may begin hearing from new companies as your creditors hire debt collection agencies to get the money. These agencies can be incredibly difficult to deal with and will make your life very difficult.
Stage 3: After missing payments for a period of several months you’ll have had countless letters and calls requesting you pay the money. Most of your accounts will have defaulted and the relevant creditors will be exploring other options for reclaiming the money.
You might be being harassed by many debt collection agencies as your creditors pass each debt on after giving up trying to get it back from you. Others will begin to pursue legal action against you by issuing a County Court Judgement (CCJ).
If things have got to this point, then it is unlikely you will be able to turn things around without help. Your credit rating will be in the pits and unfixable without intervention, and the stress from the impending legal action will be completely intolerable.
What to Do When Creditors Take Legal Action
We don’t want to underplay how serious your situation is; you need serious assistance. However, with the right help, you can still come back from the brink and wipe out your debt. With some time and the multitude of formal processes we have at our disposal, we can reduce and simplify your repayments and wipe off huge amounts of your debt.
If you have found yourself in trouble with vicious creditors and relentless debt collection agencies or are just starting to lose control of your finances, then phone us on 0800 808 5124 or fill in our debt calculator. The sooner we can get all of the information we need, the sooner we can start working on a plan to give you your debt free life.