Debt Camel

Answers to questions about debts and credit ratings - in plain English!

Help! My debt has been sold to a debt collector

If you get a letter saying that Big Bank has sold your debt to Snake & Weasel Debt Collectors you may be very worried.

This article answers questions about what has happened and how it will affect you. Will the debt collection agency (DCA) be horrible to deal with? Is it legal to do this? Do you still have to pay the money? What about your credit record?

I’m going to assume that you recognise the debt. If you don’t, then you should be send the debt collector a Prove It! letter. Don’t ignore a letter addressed to you about a debt that isn’t yours – it’s easier to challenge this now rather that wait until you are taken to court.

fat cat with a letter headed "DEBT"Has your debt really been sold?

Sometimes a lender will appoint a debt collector to try to collect the money for them. This isn’t a “sale” – you still owe the money to the original lender and none of the rest of this article is relevant.

If you aren’t sure what has happened, the best thing is to contact the original creditor and ask them if your debt has been sold or not. If you are worried and don’t want to talk to the creditor, phone National Debtline for advice about the letter.

Is this legal? Why wasn’t I asked?

When you borrowed the money or opened the account you agreed to the terms. In the small print have been a clause that said that the lender can “assign his rights” to a third-party. This is often described as a “sale”.

When a sale happens, everything about your debt – all the terms and conditions – remains the same, except that you now owe the money to the debt collector who has bought the debt, not the original creditor.

You won’t be asked to agree to the sale and you can’t object or stop the sale. You agree to the original terms which included a clause that permits this.

(There is one exception here. If your lender subscribes to the Standards of Lending Practice and if they had previously been shown evidence that you have mental health problems, your debt should not have been sold. Go to your local Citizens Advice if you would like help with this situation.)

Your debt can be sold if you are in debt management. It may not feel fair if the lender accepted your monthly offer and you are making the payments as agreed, but legally the lender can still sell the debt.

How much was my debt sold for?

That will depend on the state of your account. A debt where you have paid token payments or nothing for a long while may have been sold for very little, just a penny or two in the pound. If you are making regular payments then it will have been sold for more.

You won’t be told what your account was sold for. The sale is a commercial agreement between the seller and the buyer to which you are not legally party. This may seem annoying, non-transparent or unethical, but the debt collector and the original lender are not doing anything wrong by not telling you the sale price.

The price the debt collector paid for your debt is irrelevant to you. It doesn’t affect the amount that you now owe – you still owe the full amount but now to the debt collector.

So the lender has been paid – why do I owe anything?

The original lender has had the debt settled by the DCA. But you now owe the money to the DCA instead.

Think of this example. You borrow £200 from your sister for some car repairs, agreeing to pay her back £50 a month. But she suddenly needs all the money immediately, so your dad gives your sister the £200 and you repay your dad instead. Same debt, same repayments. You borrowed from your sister but now you don’t owe her anything but you do need to repay your dad.

This is pretty much what has happened with your debt being sold.  Your debt stays exactly the same, you just owe it to a different person.

(NB The above example isn’t an attempt to explain the legal contractual obligations – it is an analogy illustrating why you now have to repay someone else. See “Is this legal? Why wasn’t I asked?” above, for the legal points.)

I want to carry on paying the original lender

You can’t do this. You don’t owe any money to the original lender any more.

Will the debt collector be difficult?

In practice you may find that debt collectors are as easy to deal with as the original lender. Indeed they may be more likely to freeze interest or accept a full and final settlement offer!

If you had a payment arrangement with the original lender, for example in a debt management plan, you just need to offer the same amount to the debt collector.

There are regulations to make sure that that debt collectors should behave fairly – all DCAs handling credit card and loan debts have to be regulated by the Financial Conduct Authority and if you have problems with one, the Financial Ombudsman will look at your complaint.

Of course debt collectors don’t always get things right. One firm that has had a long record of handling debts badly is MotorMile Finance. In November 2016, the FCA has made them write off a lot of loans and refund other people. If you have a debt with them see MMF – should I get compensation? for details.

I now have two defaults on my credit file

Debts are usually already defaulted before they are sold. When it is sold the original creditor will mark the debt as settled with a zero balance owing and the debt collector will add the debt with the same default date that the original creditor used.

So now there are now two debts on your credit record. But the total of all your debts is right – the debt isn’t being double counted because one of these says that there is zero owing. And when your credit rating is calculated, the original debt is ignored, so your credit score will not get worse because you now seem to have two defaults.

If the debt collector adds a default date which is later than the original creditor, this is wrong. What should the Default Date for a debt be? explains how you can get it changed.

Can the debt collector take me to court?

Yes. The debt collector now has all the rights that the original lender had and this includes applying for a County Court Judgment (CCJ).

You don’t have to worry that this is going to happen straight away. the debt collector would rather reach an agreement with you for monthly payments and not have the cost and bother of going to court. But in 2016 the numbers of CCJs are increasing and it seems that debt collectors are going to court more often.

Will it reset the 6 year period for becoming statute-barred?

No. A debt will become statute-barred six years after you last acknowledged the debt e.g. by making a payment towards it. If you haven’t made any payments for the last two years say, then a sale to a debt collector makes no difference and there are still four years left before it becomes statute barred.

A debt that is old and already statute barred will continue to be so after the sale. Read Statute Barred Debt – Common Questions – that article has a template letter you could use in this situation.

The letter doesn’t say what the debt is!

If you get a letter that might be about a debt but it doesn’t give any details, just wants you to call them, then this is a “fishing expedition”. They don’t really know who the debt belongs to and they are hoping someone will give them their details (date of birth, previous addresses) that will match. You can usually ignore these vague letters – see Prime Location Services – do I have to call them? for an example.

What do I need to do?

If you have a debt management plan run by a company, tell the DMP company. They will switch your monthly payment to go to the debt collector.

If you are running your own DMP, you need to cancel any standing order paying the original lender, offer to pay the same amount to the DCA and ask for their payment details. They may ask you to provide a new Statement of Affairs.

If you have been ignoring this debt, this is a good point to review your whole situation and your possible debt solutions.

More Debt Camel articles:
What are your possible debt solutions?

A simple overview of your debt options

Threats of court - are debt collectors bluffing?

Threats of court – are debt collectors bluffing?

Could you get a payday loan refund?

Could you get a payday loan refund?

Comments

  1. Hi Sara – have you ever heard of a case of a DCA transferring a debt back to an OC?

    The situation is that I never received a default notice from the catalogue company Next and now over three years later they have sold the debt on, but in that time increased the debt by over 60%! So from £50 to £200! I had previously written to them to offer a token payment but they declined this.

    I want to deal with Next directly, as I don’t believe the DCA will be fair.

    Do you have any advice? Would writing or speaking to Next reset the ‘statute barred’ clock?

    Reply

    • You have had pretty poor treatment from Next, I can’t think why you want to go back there! No there isn’t a way to get your case transferred, back.

      I suggest you consider putting in a complaint to Next that they refused to freeze interest and charges and your debt escalated hugely. See https://debtcamel.co.uk/creditor-wont-freeze-interest/. You can do thise even though have sold the debt on.

      Yes talking to the creditor will reset the statute barred clock. But this debt isn’t close to being statute barred, it isn’t realistic to hope this is going to happen.

      Reply

      • Thanks Sara!!

        I’ll put in a complaint to Next – I take it they aren’t my ‘creditor’ anymore anyway?

        Also, the default on my credit report is for £200 and the default date is July 2013, however at that time the actual debt was not £200, so it seems a bit unfair. I’m happy to pay the original but the charges seem a bit excessive!

        Reply

  3. Hi

    I was £50 off from clearing my debt off that I have worked soo hard to clear and when I asked to settle the account I was told they have sold the debt on …. This is soo unfair as I’m about to clear it and now am worried I will have to repay the whole debt again like has happened to me ..

    What shall I do ?

    Reply

    • Not sure why you think you will need to pay any more with a DCA? Call them up and settle your debt.

      Reply

  4. Hi,

    On the 5th September 2010 I received a letter from First Plus telling me they had sold my ‘secured’ loan had been sold on to a debt collection agency.

    To my knowledge I have never received any letters from the DCA & now I am selling my house FIRST PLUS (they have since ceased trading) but it is still on my land registry charges… I have not received any letters or information for over SIX years so will I still have to pay this when my house sells? Should I contact the DCA & ‘offer’ them a settlement figure?

    Any advice would be very helpful please. Thanks

    Reply

    • The charge over your house does not become time barred so the fact you have had no contact for 6 years is probably not relevant. You need to talk to the solicitor handling your house sale about your options. you may also want to speak to a specialist debt adviser such as National Debtline 0808 808 4000.

      Reply

  5. Hi Sara,

    I need some advice regarding an alledged debt on a bank overdraft I had with Lloyds Bank.

    I previously had a staff account with Lloyds bank which was opened in 2003 when I started working for the bank. In 2005 I requested an overdraft faciliy on my account, which started at 500 and eventually defaulted in June 2011 for approx 2.5k. The debt was sold to a company called debt managers, who appear to have later sold it to cabot financial.

    I made 15 payment on the account totalling to 130, the last of which was made in Nov 2012 – it went quiet until June 2015 when I start writing letter to them asking them to prove the validity of the debt.

    The last letter I wrote to them was in March 2016:

    Re: Account – xxxxxxxxxxxx – Formal Complaint – Amount of debt is in dispute
    ————————————————————————————————-
    “I hereby wish to make a formal complaint with regard to the above account and an alleged balance of £2500. I do not agree that this sum of money is owed and I believe that the alleged debt has been made larger by unexpected interest and charges.
    I hereby request that Cabot Financial provide evidence to show the amount that is actually owed. If you have relied on a figure provided by the original lender, then it is your responsibility to ask the lender for the necessary breakdown of the figure you claim I owe.
    I request your final response to this matter within eight weeks.”

    They sent a letter in May 2016, advising that they would not pursue the debt until they could provide confirmation of the sum owed.

    Today I have recieved a letter date 28th Feb 2017, with full copies of my bank statements going back to the date the account was opened in 2003! There is no copy of any credit agreement confirming the terms of the overdraft.

    I believe that Lloyds Bank have broken data protection by sending full copies of all bank statements. I believe this is highly sensitive information and I did not consent to this information being shared with a 3rd party. Even if there is some clause within the contract that allows them to forward information to a debt collection company – surely these rights do not extend to sending copies of my bank statements from when I was 16 years old and had no overdraft facility on my account? How in any way are they pertinent to the debt recovery?

    Furthermore, with the nature of the debt being linked to a bank overdraft and initial complaint alledging they have added unexpected interest and charges, without a copy of the credit agreement confirming the interest rates and charges for late payments etc. the bank statements themselves do not prove that the caluation of money owed is correct, merely that there was an overdraft facility on the account – which at no point has been in dispute.

    I appreciate that this is somewhat complex – although I am confident that Lloyds have acted unlawfully in sending bank statements that precede the inception of an overdraft facility. Do you agree on this point?

    Would you agree that without the credit agreement outlining terms, the bank statements do not prove the calculation of charges is accurate?

    And finally – in commencing debt collection activity, while illegally posessing bank statements which precede the debt, can I also take action against cabot financial?

    Reply

    • I am not a lawyer, so you may want to take legal advice. But no, I don’t think Lloyds acted wrongly in sending the bank statements. You disputed the balance, the only way to prove what the balance is is to show all the credits and debits to the account. If the balance had been wrong before the overdraft started it would still be wrong now so old statements may matter. I can’t see there is anything here to dispute with either Lloyds or Cabot.

      Overdrafts don’t have a consumer credit act agreement. Is there a particular reason why you think the charges were calculated incorrectly?

      Reply

  6. hi some advice please….

    we have two credit Card debts which were passed to collection agencies over 6 years ago when my husband was made redundant. I now would like to release some money from my mortgage but I am not sure if the debt agency will share the details of my accounts with my mortgage provider? are they able to see my debt information before the morgage provider makes a decision?
    thanks

    Reply

    • A mortgage lender will look at your credit records – have you checked what they are with all three credit reference agencies? See https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this.

      A mortgage lender will also normally ask to see your bank statements, so they are likely to see any payments you are making to debts, including any to debts which aren’t on your credi record.

      Reply

  7. Hi.
    I have had a credit card debt sold on. It shows a perfect payment record as I have been paying it for the last 3 years without missing a payment. It does however obviously state the name of the lender as the company who bought the debt. I’m looking at going for a mortgage in the coming months. Will the mortgage company recognise the company as a debt collector?

    Reply

    • A lender can’t see the names of who you have borrowed from. They can see if it is a loan, credit card or overdraft. And there is a flag that indicates payday loans. But they can’t see the names.

      In theory they could piece together two different debts, the closed one from the original creditor and the new one with the debt collector and make a guess what has happened. This would seem to me to be pretty unlikely.

      Reply

      • Thanks Sara.
        Can a lender sell the loan to a DCA just before the end of the 6 years. The DCA could then carry on as a normal loan indefinitely until it’s fully paid off, or, a fresh default for another 6 years?

        Reply

          • Sorry Sara. I have 3. The one I first mentioned, and 2 others. One of the 2 that are showing as defaults is a Lloyds credit card. That is just under 5 years old. They have just written to tell me that it will be dealt with by a collector. I have a payment plan with them all that I have never missed payments on. Now they are selling it on.

  8. Hi Sara, I have two defaults for the same debt. Motormile Finance and the original lender Lending Stream. Can Motormile add a new default for this debt? Should they not have updated the original default entry with their details rather than add a completely new default? I now have two defaults for one debt and no one seems to care!

    I would add this default from MMF only appeared on my credit file two years after the debt payment was missed, albeit with the correct date of the original loan agreement

    Thanks for your help :)

    Reply

  9. We owe cabot £4,339.00, and pay £70 per month, we have been paying monthly payments for 12 years, and have never missed a payment. However we have now taken a drop of £460 in our monthly income, and are finding it very hard to manage. A relative has offered to give us some money, it is not a great deal, but it is very kind. Would it be alright to offer a full and final settlement for £2,200, and would they think we could pay this off and still have to pay the rest? that is a great worry. this debt was with co-op, then fredricksons, now cabot. Despite never having gone to court or missing payments, fredricksons added cort costs, solcitors fees on, many years ago.

    Reply

    • That is a really old debt – was it a loan, credit card or an overdraft originally?
      Are you sure this never went to court so you didn’t get a CCJ?
      (The reason I am asking what may sound like irrelevant questions is because there may be another option for you to try,)

      Reply

      • it was a unsecured personal loan taken out with the co-operative bank in February 2004, regular payments made till December 2004, then reduced payments ever since.

        No we have never gone to court, we went to trading standards money advice, who set up a repayment plan with all our creditors 13 in total, they have now all been paid off, except this one, and one that Westcott recently took over which is £297, down from over £6,400. they will not give us an early settlement. We have never missed any payments, nor have any been late, (a model client apparently that is why money advice stopped helping us), now with this drop in money, it is a real struggle, hence father in law offering to pay it off, but he is not a wealthy man, and has a limited amount. We chosse this option of repayment over an IVA, we still owe over £90,000 on mortage. When we contacted cabot recently for an annual review, they did offer to lower repayments, as our plan was leaving us with £43 a week for food, clothing. we accept it was our fault in debt, which is why we feel we should pay it back, however after 12 years and another 5 or 6 is taking its toll, esp now. We are very worried that cabot will start putting interest on account, I think that is why we are worried about writing to them.

        Reply

        • First it is HIGHLY unlikely that Cabot will start adding interest.

          As this debt is so old, the first think I think you should look at is asking Cabot to produce the Consumer Credit Act agreement for the debt. National Debtline, one of the biggest debt advice charities, have a sample letter you can use for this here https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx#.

          If they can’t produce this then you can stop paying them as they can’t take you to court. National Debtline will be able to explain this to you, they have a very friendly helpline: 0808 808 4000. I know you wanted to repay all your debts but you have been doing your best for many years and I think you have done as much (or more) then is reasonable.

          Reply

          • we have recieved a response from them, we offered the £2000 my father in law has offered, however they offered a settlement of £3640 on a debt of £4,121. and also wanted a fiancial statement from us, we completed this and sent it off. Now they said they need further information to pass to cabot, before our offer of £2000 can be passed to cabot. They now want to know how long is left on mortage, what is owning on it, and if we have any equity on the house, also how we have these funds for a settlement. We have already said how we have the funds, do we have to answer them re our mortage?? we have had no CCJ’s, my hubands career could be affected by one of these. we have till the end of the month to answer them.

          • You don’t have to answer their questions. But then they don’t have to accept your offer.

            Did you consider my suggestion to ask them to produce the CCA agreement for the debt?

          • Yes we took your advice and spoke to National debt line, they said that because we felt we had a good relationship with the debt company not to ask for the CCA agreement, and just to make an offer using their template letter, which we did. (we explained to the debt line, that the company have always been understanding in their dealings with us, when we have rang them with our yearly fiancial statements, also we told them in february, we where struggling due to a £460 month drop in income, they suggested less monthly repayments, the lady on the phone was very understanding as due too a medical condition I need to eat certain foods, and said if we could not manage to ring back, it was following this conversation that my father in law offered this money).

          • Do yo think we should try and borrow the shortfall of what we have offered and the final settlement figure which is £1600, from famlily members to pay it off?
            Or do you think we should ask for a copy of the CCA agreement? if they produce a copy of the CCA agreement, can they take us to court, add interest, get a CCJ?
            If they do not send us a copy, can we stop payments immediately? what can they do if we stop payments? Under no circmstances can we have a CCJ for employment purposes The company we are dealing with are debt managersltd, acting on behalf of Cabot. The offer of a settlement is open until the 28th of this month. I have presumed wrongly, that beacuse we have never missed a payment, and they have been understanding on the phone, that I did not want to rock the boat and ask for a CCJ, this is causing a considerale amont of worry at the minute for us.

          • No, they have not rejected our £2000 offer, they have said they needed more information to pass to Cabot, they then asked for a fiancial statement, which we completed then they wrote to us asking about our mortage, any equitey, how much was owed on the mortage, how much the house was worth and where this money was coming from, (we had already told them where the money was coming from) we have till the 28th to reply. they said they needed this information, before they could pass the offer to Cabot. It was an unsecured loan, with the co-op taken out feb 2004, reduced payments since jan 2005, it has been passed from co-op, to friedricksons, and now debt managers on behalf of Cabot. Never missed a payment, never had CCj

          • It sounds as though you have sent them what they have asked for. You need to wait and see what they say now. If they reject the offer, you can look again at the idea of asking them to produce the account documentation, but there is no point in worrying about this at the moment.

          • we have not responded to their letter asking for details on mortage, or where the money has come from. should we write back and repeat where money is coming from, and ignore answers on mortage?

          • I think you should tell them what they are asking for. You have no more spare income I think you said? Then they will have to choose between the bird in the hand of the settlement you are offering or the two birds in the bush of getting low payments from you for a long while.

            If you don’t tell them, they will think you are concealing something.

            From what you have said, you offer sounds a reasonable one to me. If they reject it, then you can start looking at your other options, but there is no need to expect that this will be necessary.

          • We wrote to debt managers giving them the information they required about our mortage and equity on the house, we recieved a response within a few days, stating that they would pass this to Cabot, but we have heard nothing from them now in almost 3 weeks. How long should we wait? and do you think it is wise to write and ask them for a copy of the CCA? I cannot understand the delay as previously they have responded within a week, also debt managers and cabot are the same address, we are slightly worried over this to be honest.

          • We have recieved a reponse from debt managers ltd on behalf of Cabot, after asking about our mortage, equity, how long mortage is lasting, and how much we owe, and wanting up to date fianical statement, all of which we have sent. Our offer of £2000 early full and final settlement, has been refused, they have offered a settlement figure of £3,281.51, on a balance of £4101.89. Should we try and write to them to offer a payment in between this of £2650? or write and ask them for a copy of the CCA? we simply cannot pay that figure of £3281. any help would be appreciated. thank you

    • Should we try and contact Debt managers and ask if they would accept £2700, which is between what we offered and the payment they said as full and final settlement. After giving them details of the mortage/ equity, we are now worried that they will try for a CCJ, we simply cannot raise the £3281. We have to borrow this £700 of our son. Or should we write and ask them if they would not take our £2700 could we have a copy of the CCA? they need a answer in the next 3 weeks.

      Reply

  10. My comment is how many times can a bank sell on a loan that is 11/12 years old that has been payed up until last April because it changed hands yet again and somehow the collection details got lost (on their side) it now seems as if the loan has never reduced but doubled.

    Reply

  11. Hiya Sara. When an overdraft debt is sold to a DCA does all the bank statements of the original account go to them too?

    Reply

    • Do you want the statements because you are disputing the amount owed or because you think the overdraft charges are too high or for some other purpose not connected with this account?

      Reply

          • I’ve had a few letters from a DCA recently about a 7 year old overdraft. Even though it’s probably statue barred I was thinking they might send the bank statements to me to show the overdraft and try and pressure me to pay it.

          • Not sure why being sent a statement is a good way of putting pressure on you?

            But in any case, statute barring is tricky for overdrafts as there is no monthly payment to be missed. I suggest you talk to National Debtline 0808 808 4000 about whether this may be statute barred and your options if it is/isn’t.

  12. Please help, My sister received an address verification letter from westcot. I contacted them and was told I owed a utility company 1,560gbp between June and July 2012. I settled the utility account fully in 2012 with no outstanding. I contacted the utility company, I was told the debt was written off in 2013 and passed to debt collection. I have lived abroad since that time. Please advise. Thank you.

    Reply

    • I can’t really say anything about whether the debt collector would be able to pursue you whilst you are still abroad for this. Do you have any intention of returning to Britain?

      Reply

  13. Thank you. No, not anytime soon. The property is in my name, I am concerned because I do not know what they can do. Please, how do I proceed?

    Reply

  14. Hi,

    Interesting post. I have a question, I have had debt from 2014 sold to Lowell. I have told them a number of times I do not feel this is right as I cancelled the mobile contract and stopped using the mobile.
    I have asked for an itemised bill to demonstrate I continued to use the mobile however, to date they have provided something other than a statement that shows nothing with regards to usage.

    My contract has expired 18month to two years prior so it was just a rolling agreement, but they can’t even provided details on contractual obligations……

    What are they mandated to provide me with??

    Reply

    • You need to tell them you dispute the debt. Any proof you cancelled the contract would help. But they are likely to say you need to complain to the mobile company.

      Reply

  15. Hi,
    I have two accounts now being handled by 1stCredit .Registered Office: The Omnibus Building, Lesbourne Road, Reigate, Surrey, RH2 7JP, Registered number is: 3752940
    However, I have been trying to reach them for over a week to complain about my account being mishandled (overcharging and wrong dates for the accounts) and no one has answered my emails. Also, their website is down and they are not answering their phones.
    Have they gone out of business? It could have repercussions for many people who have accounts with them.
    Thanks for your help.

    Reply

  16. Hi,
    In past I had a HSBC Cr.Card which is showing Defulted account with some balance on my Credit Reports. When this account actually been settled through Debt collection services in one off payment.
    When I contacted HSBC regarding this. I was told that my account is written off and marked as a default account with balance which I was owing.
    But in reality this account has been settled.
    Need some advice or help to get this sorted.
    Many Thanks.

    Reply

    • I suggest you write/email HSBC saying when you paid the debt off, attach a copy of your bank statements showing this, and ask them to correct your credit record.

      Reply

  17. If a DCA buy a debt from a lender, own it and its unenforceable – Do they send it back to original lender? Thank you very much.

    Reply

    • If they own it, I wouldn’t have thought so, I haven’t heard of this happening. They may sell it on to another DCA. Why is the debt unenforceable?

      Reply

      • It was debt that was included in my bankruptcy so therefore unenforceable. DCA after contact I had with them were reasonable and agreed to change default date back to date of bankruptcy order. It’s from a bankruptcy of 6.5 years ago.

        Reply

        • You shouldn’t hear any more about this. If it pops up again, send the new creditor a copy of your discharge notice.

          Reply

  18. Hi, I am being chased by Westcot for the sum of £700 for a debt off £60. I owed Orange £60, but my husband was made redundant so I couldn’t pay it….I almost lost my home. I told them I wa unable to pay at the moment, but would pay it when I could. Is this fair?

    Chris

    Reply

    • Hi Christine, that sounds a difficult situation. I think you should talk to National Debtline on 0808 808 4000 about these debts and your complete situation. I hope that will give you a complete picture of what your options are now and how they may change in the future.

      Reply

  19. Hi Sara, When I was forced to close my business due to the 2008 recession, I struggled on but defaulted on 4 personal credit cards in 2012. They have all been paid £1 a month since then with interest frozen. I now have an offer from Cabot for one of those debts for 30% of the total owed and the letter reads that I can pay that in instalments. Before I accept this offer, I’d like your advice re dealing with them and how their offer of partially settled with nil balance affect my credit rating. Will it be another 6 years before it drops off the credit report when I make the last payment? Is there a better way to deal with all 4 creditors at the same time without bankrupcy or IVA? I’m worried that the other 3 creditors will go for CCJ as the 6 years after default will be next year. Many thanks, Martine

    Reply

    • Does the Cabot debt have a default date on it? Do the other three? Also how old are these accounts, when did you first open the credit card account?

      Reply

  20. Hi – all have the default date on my credit report (noddle). The account start date for the credit card related to the cabot debt is 26/09/2007 with the other credit cards opened in 2004, 2007 and 2005.

    Reply

    • OK, well any debt with a default date is going to drop off your file after 6 years whether you pay it in full, partially, carry on with the token payments or stop paying altogether. ( That last isn’t recommended as you will probably get a CCJ which will wreck your credit record for another 6 years, but the debt itself will still have dropped off.)

      So if you agree this 30% F&F with Cabot, it isn’t going to hand around for another 6 years, it will go in 2018 if the default date was 2012.

      The reason I asked about the start dates for the accounts is that for many credit card accounts opened pre April 2007 the debt collector will not be able to produce the correct Consumer Credit Act Agreement details… and in that case they can’t enforce the debt in court and you can stop paying…

      (This can also apply to debt after April 2007 but the rules changed at that point and it’s much more likely the debt collector can comply with them.)

      So one good option for the older debts is to ask them to produce the CCA agreement. More about this, including a template letter, here: https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx. And National Debtline are good people to talk to if you are sent back something you don’t understand or you don’t think looks right.

      There isn’t really a way to deal with all 4 debts at the same time and get them all to accept the same offer except through a formal debt solution such an insolvency. And at this point you don’t want that on your credit record – the time for an IVA was back in 2012,

      You don’t want to make an arrangement with Cabot which means you don’t have enough to make a deal with the other three.

      They aren’t going to start pushing you because the 6 years is coming up – as you are making monthly payments these debts are never going to become statute barred. But at some point they may ask you for an income & expenditure sheet to get you to pay more.

      A good approach could be to save up a pot of money so you can make a F&F offer to the other debts.

      Reply

      • Thank you Sara. I will send them letters and have just sent an email to Wonga re the payday loans I took out as well.

        Reply

        • Hi Sara, I’m sending the letters to ask for the CCA agreement. I have the registered address and a PO Box address for Link Financial I’m unsure whether to use the registered address or PO Box address. Is there any potential issue with them saying they didn’t receive the requests if I write to either of these addresses? Should I send letters to both addresses? What would you recommend? Thanks

          Reply

          • I would send it to the address on the top of the last letter you received.

  21. Hi I’ve had sheriff officers today with a decree for an unsecured debt from 2002 , This debt has been sold on numerous times to debt collection companies I have never responded to them stupidly , I live in Scotland and the debt was with a Scottish bank , but now the debt is owned by an English based company , I was told a few years ago it was statue banned by citizens advice so I didn’t reply to letter s , what options have I got now cheers

    Reply

  22. Just thought I would ask. I do think your article is a little bit muddled as you refer to ‘assignment’ and than call it a ‘sale’. if a DCA is ‘assigned’ your debt from the original creditor, then I agree that you original credit agreement is still in force, provided that the original creditor informs you first. If a DCA ‘buys’ your debt, then the original CCA shouldn’t apply ?

    Reply

    • As the article says, this is legally an assignment but it is frequently called a sale.

      The original creditor doesn’t have to inform you first.

      The CCA agreement still applies after the assignment / “sale”.

      Reply

  23. Hi i had an old rent account sold to a debt collector which includes £750 of legal charges? Is this is excessive and what can i do about it?

    Reply

    • Go to your local Citizens Advice with full details of the rent debt and the charges added.

      Reply

  24. Hi Sara
    I have to say the site is very informative. I hope you may be able to help. I was made redundant in 2009. I managed to pay my debts until 2011 when I had two defaults listed against me. The first default was paid off in full a few months ago and had dropped off my credit report in March this year. The second default I had been paying down, as it had been passed to Westcot a number of years ago and I have been paying them, (there are still a few months left to pay to clear the debt) this however was due to drop off my file in May as the six years are up. However when I check my credit report today (Noddle) it no longer shows on my file at all under either closed or open accounts. What can this mean?

    Reply

    • That it has dropped off in May as you expected? Not sure why you think this is a problem.

      Reply

  25. Hi
    I have a CCJ after falling behind with payments. The CCJ agrees a set payment until the debt is settled which I have paid ever since through step change. I have now received another letter from a different DCA saying I have missed two payments (I haven’t). I have not recieved notification from the original creditor or the courts that this debt has been sold on. Where do I stand on this as the CCJ states I have to pay the original creditor the money?
    Thanks

    Reply

    • Contact the DCA, say you haven’t missed any payments and say you will be carrying on paying the original creditor until they tell you that the debt has been sold.

      Reply

  26. Hi Sara

    I recieved a final bill off british gas begining of may (about 30 days ago) when i moved and on saturday i recieved letter from debt coll comp for £20 more than final bill. Can they send it to collectiom company in this short time? Thanks

    Reply

  27. Sara,

    I have had a few letters now from Lowell regarding an Orange account they have brought, and they want £1300+ . I have never had an Orange account and have been with O2 since I don’t know when and can prove this. What should I do???

    Thanks in advance,

    Adam

    Reply

    • Write to them saying just that. This is not your debt, it belongs to someone else and they have wrongly matched it to you is the most likely explanation.

      Reply

  28. Hello Sara!

    I am wondering if you can help me, upon checking my credit report, I have an outstanding debt to Huthcison 3G UK LTD, upon phoning this company, I have been advised the debt as been sold on to Fredericksons debt collection company, I have since called this company and been advised that the debt has been sold back to client, I.E Hutchisons, but they are adamant they are no longer in control of this debt and neither company can help me. All I want is to settle this default. Any advice?

    Reply

    • It is a daft sort of problem, isn’t it. You have to stop phoning them and get these complaints put in writing. I would start with Hutchisons – send a complaint to their data controller, address here https://ico.org.uk/ESDWebPages/Entry/Z5513412, saying if the debt has been sold on to a debt collector then H3G should correct the entry on your credit record to show this and they should inform you of who it has been sold to.

      Reply

  29. Hi Sara

    Thank you for creating this website and your continued posts and replies.

    Has answered questions I had :-)

    There are two points however that I would be grateful if you could clarify.

    From this blog post, I gather:

    POINT 1
    The DC can apply for a CCJ.

    POINT 2
    A debt will become statute-barred six years after you last acknowledged the debt e.g. by making a payment towards it.

    Can you clarify what happens if the debt is 4 years old and the DC gets a CCJ and no full payment is made on the CCJ within the month for it to be removed from file.

    Is the CCJ valid for 6years (from date DC filed) or 2years (time remaining on debt)?

    Asking because a CCJ is 6yrs in length

    Thank you for reading and looking forward to your reply

    Reply

    • After a CCJ the “time remaining on a debt” is no longer relevant.

      A CCJ never becomes statute barred, but after 6 years from the CCJ date it can only be enforced if the creditor goes back to court.

      Reply

  30. Hi, my debt got sold to another collecter however on my credit report i have an outstanding default from the original lender but also one from the new one. Both say outstand 155.00. I am paying this today but who do i pay?

    Reply

    • I suggest you phone the original creditor and ask if the loan has been sold to the debt collector. If they say yes, ask them to set your balance iewed to zero and pay the debt collector. If they say no, pay them and put in a complaint to the debt collector asking them to delete the record.

      Reply

  31. hi, i have just been served with a claim form issued from northampton… i have had this before last year for a different matter and won against lowells… so i know the procedure… What i would like to know is.. is the DCA obliged to include the alleged default date of when i am alleged to have defaulted with original creditor, in the particulars of claim? they have not and i am including this in my defence… will also be asking for deeds of assignment and cca…any help appreciated..Also what is the best template to use in requesting cca and deeds? so many on the net floating around.

    Reply

  32. Hi Sarah, it appears when I left my previous address in 2009 I had an bank of scotland credit card and this must have been the only organization that I didn’t In form of my move as I wasn’t using it. I have just had a letter from Arrow Global who have bought a debt of £139.23 passed on to Capquest to recover. Contacted bank of scotland and only details so far is account was closed in 2013. I can only think New owner of old address was just throwing correspondence away. Interestingly in with the Arrow Global letter is a bank of scotland letter confirming Arrow Global legally own debt with my new address on it so why didn’t they ask for it first. Do I have any rights as I suspect majority of money is built up interest between 2009 and 2013 where correspondence has gone to old address. Regards Stuart

    Reply

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