How to deal with debt collectors

Knowing how to deal with a debt collection company if you're approached for money can ensure you're not intimidated or mislead. Here's how to handle debt collectors and avoid the traps they set to get you to pay up.

Updated on 19 May 2015.

collector man talks to woman

While all companies need a way to collect outstanding debts, there are rules and guidelines that should be observed by debt collection companies.

Unfortunately they don't always keep to these and have been known to use under-hand, dishonest and sometimes borderline illegal tactics when it comes to debt collection - this means you really need to be on your guard if you're approached.

Here's how to deal with debt collectors if they come calling:

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Find out what you owe and to whom

The first step when dealing with a debt collector is to find out exactly what they want, where the debt they are collecting has come from and how much they believe you owe.

You should write to the debt collection agency in question asking for a copy of your original credit agreement (they must legally provide this) and telling them that you wish only to be contacted be post - this should prevent telephone calls and home visits which are difficult to keep track of.

It is important to do this before you acknowledge that you owe them any money.

It if transpires that you have no knowledge of the debt in question then you should inform the debt collection agency in writing that this is not your debt, and that you will contact the Trading Standards if they contact you again about it.

What to do if you owe money and can pay?

If the debt is question is legitimate and you can afford to clear some or all of it, the easiest solution is just to pay up.

Delaying unnecessarily is likely to lead to further hassle from the debt collection company and could lead to court action and the appointment of bailiffs in the long run.

Don't just hand over cash to the debt collection company or bailif - instead you should ask for a final bill to be sent to your home (in writing) and pay by cheque or debit/credit card.

If you must make payment in cash then it's vital you get a reciept and written acknowledgement that the debt has been paid in full.

Once you have settled you should also make sure the company updates your credit file to show that the debt is now satisfied.

What to do if you owe money and can't pay?

If you can't afford to pay the debt you may be able to agree a repayment plan with the debt collection agency, even if this is a nominal amount each month.

However, before you contact them to negotiate a plan you should seek advice from an independent charity such as the Citizens Advice Bureau, StepChange or the National Debt Line.

Once you have contacted a money charity you should be given a grace period of up to 30 days by the debt collection agency to all to allow you to sort your finances and establish how much you can afford to pay.

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