If you get a letter saying that a debt has been sold to a debt collector you may be very worried.
This article answers common 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?
- what if you don’t owe the money?
Contents
I don’t think this is my debt
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 at all, it is just asking 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.
But I don’t owe this money
When the letter mentions a debt that you don’t think you owe, do not ignore it.
If you have already repaid the debt, tell the debt collector this. Ask them for a Statement of Account for the debt if they say you do still owe money.
If you have never borrowed from that lender, or never used that electricity supplier, reply telling the debt collector to Prove It!
It is the debt collector’s job to show you are the borrower. You don’t have to prove you aren’t. But unfortunately you may need to be persistent about this.
Has the debt really been sold?
A lender will often 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. 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 the sale fair?
Is this even legal? Why wasn’t I asked?
When a sale happens, everything about your debt remains the same, except that you now owe the money to the debt collector who has bought the debt. The T&Cs of the debt haven’t changed – just who the creditor is.
You won’t be asked to agree to the sale. AndYou can’t object to or stop the sale.
You agree to the original terms when you borrowed the money or opened the account. In the small print, there will have been a clause that said that the lender can “assign his rights” to a third-party. This is the legal term for a “sale”.
Your debt can be sold if you are in debt management or you have an arrangement to pay. 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.
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 or critical illness, your debt should not have been sold. Most banks and many major credit cards are subscribers. Go to your local Citizens Advice if you would like help with this situation.
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.
This may seem annoying or unfair, 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.
If 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 This example isn’t an attempt to explain the legal contractual obligations – it is an analogy illustrating why you now have to repay someone else.
I want to carry on paying the original lender
You can’t do this. You don’t owe any money to the original lender anymore.
Has this reset the 6 year period for becoming statute-barred?
No, this hasn’t changed anything about statute barring:
- if the debt isn’t yet statute-barred, the 6 year period carries on, it doesn’t start again after the sale. But if you were hoping the debt would soon become statute barred, the debt collector may push you to make a payment or go to court for a CCJ if you won’t. See “My debt has been sold, just when I thought I was out of the woods” for your options.
- where you have been making payments, this debt will never become statute-barred.
- a debt that is already statute-barred will continue to be so after the sale.
Read Statute Barred Debt – Common Questions because statute barring is complicated.
My debt has now been sold to another debt collector!
This happens. Sometimes several times. There is nothing you can do about it.
Sometimes the debt collector is going out of business. In 2022-3 there was a very big transfer of debts from Hoist to Lowell for this reason.
If you have been paying the previous debt collector, just start paying the new one.
What will the debt collector do?
Will the debt collector be difficult?
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 consumer credit debt collectors behave fairly. All debt collectors handling credit card, overdraft 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.
Unless you ignore the debt collector, it’s unlikely that you will get phone calls at work.
Will they come to my house? send bailiffs?
Bailiffs can’t be sent until the debt collector has got a CCJ (see below) and you are not making the CCJ monthly payments. this is very unlikely unless you ignore the debt collector.
In theory, a debt collector can send someone to your house. They have no more right to enter your house and take your things than the postman has. You don’t have to open the door to them.
As a result, this is pretty rare. It isn’t going to happen unless you ignore the debt collector, and even then it’s pretty unusual.
Can the debt collector take me to court?
Legally, 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 2022, there were nearly 900,000 CCJs. Many of these CCJs are for quite small amounts – much less than a £1,000.
Very few original lenders go to court for a CCJ – they usually sell the debt and let the debt collector take you to court. You may have been ignoring the original creditor and all that has happened has been a few emails and letters. But if you ignore a debt collector they are much more likely to take you to court.
How much can you pay to this debt?
I already have a payment arrangement in place for the debt
If you have a debt management plan, tell the DMP company. They will switch your monthly payment to go to the debt collector.
Where you have set up the payment arrangement, you need to ask the debt collector for their bank account details so you can start paying them.
I can’t afford to pay anything as I have arrears on important bills
Explain this to the debt collector. Most of them will let you have a break from paying if you have priority debts.
DO NOT PANIC and offer too much
You should only offer what you can afford for regular monthly payments. Not the maximum you think you can stretch to next month.
Never borrow money to try to pay a debt collector. This is an already defaulted debt where interest should be frozen. You will make your situation worse by borrowing more money to clear this and paying interest on it.
If you have been ignoring this debt, this is a good point to review your whole situation and your possible debt solutions.
If you aren’t sure what to offer, or feel a debt collector is trying to push you to pay too much contact your local Citizens Advice. Or phone National Debtline on 0808 808 4000,
But 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 with defaults on your credit record. You may be alarmed because that looks bad.
But the debt isn’t being double counted because one of the debt entries says that there is zero owing.
And when your credit rating is calculated, only one of the two debts is counted. So your credit score will not get worse because you now seem to have two defaults.
Options when you cant pay bills & debts
Threats of court – are debt collectors bluffing?
Ask for the CCA agreement for old debts
Raza Choudhry says
Hi Sara.
If a lender does not give a Default Notice can they still sell your account. Thanks
Sara (Debt Camel) says
Yes. Your account can even be sold if you have never missed a payment.
Raza Choudhry says
Thank you.
I guess we are in big trouble. Mortimer has issued us with court proceedings, and I was hoping that not having received a Default Notice may have been something we could use (unfortunately they provided a Cca copy from Lloyd’s 🙁).
The horrible person we spoke to on the phone would not consider the settlement offer they gave to us before (£700) and just kept on saying the matter is now going to court.
Sara (Debt Camel) says
You should have been sent a Default Notice.
Talk to National Debtline on 0808 808 400 and/or post on the Legal Beagles Forum https://legalbeagles.info/forums/forum/legal-forums/court-claims-and-issues/received-a-court-claim about whether you can use this to defend the claim.
Max says
Hi,
In case it helps, Lowell recently abandoned legal action against me for an old debt as Cap 1 could not provide the Default Notice from 2014 that I had requested as part of the pre-action protocol.
Reading the AAD forum, it seems the failure to supply such a document is sufficient to null court action, but as Sara says, best you take professional legal advice.
For the record, it’s been over nine months since Lowell last got in touch, but their letter clearly states the Default Notice is no longer available.
Best of luck,
Max
Raza Choudhry says
Thanks Max that’s brilliant.
In our situation we requested a copy of the Cca, which after a long time they did send.
However never asked for DN as that just didn’t cross my mind.
On speaking to the DC solicitors ( same company basically) the very rude and arrogant individual stated that companies don’t tend to keep copies from 10 years ago etc, trying to suggest therefore it’s not necessary.
We have now requested the DN but I am worried that they have served county court papers on us on 28.04.23.
So worried what will happen if they don’t provide this information in time
Sara (Debt Camel) says
Talk to National Debtline and post on the Legal Beagles forum
Holly says
Hello, I hope all is well I just wanted some advice please. I have a guarantor loan with buddy loans in which I am paying off a payment plan but I missed a payment in 2021 and the debt has been sold to a company . This company are now chasing my guarantor for the payment that I missed in 2021, even though she is not in a financial situation to pay anything towards that. Is there anything I can do??
I’ve only ever missed one payment. I believe it was by accident when I was changing jobs in the payment dates changed, but I have paid every month since
Sara (Debt Camel) says
How bad is your guarantor’s financial situation?
Adam says
Hi,
Thanks for all your help recently.
I have been contacted with a 7 day reply notice to a debt collection agency regarding an energy bill from an energy company that is now bust.
I had an ongoing dispute with the energy provider at the time (2021) as they had put me onto an expensive tariff without my consent and had provided false information on the phone. The energy company acknowledged their fault and I have this in writing in an email.
Although all calls and communication were recorded, with the company going bust, I don’t know how they can resolve this and clear the debt as they may argue my email correspondence is fake?
My question is, I am being chased for £686 with a 50% discount to settle the account but I will have to pay in full, which I can not afford to do.
What are my options and what would you advise?
Sara (Debt Camel) says
So do you think half of that would be a fair settlement? It does sound as though you probably owe some money?
What are the rest of your finances like?
Adam says
Thanks for your reply.
I am happy to pay half as the energy company collapsed before they could completely resolve my complaints however I can’t afford to pay this in one payment, especially within 7 days.
I am worried this will impact my credit score and the last thing I want to do is pay this on a credit card as my finances have gone out now until my next pay cheque.
Sara (Debt Camel) says
is this already impacting your credit score? Would you be able to pay the half next month?
Anonymous says
I had a debt to a company but they refused to speak to me when I was having difficulties because I didn’t have my old bank card details, in the mean time the debt grew, and when I finally got contacted by a debt collector I told them to get lost because it wasn’t fair and they did. Then last week I got told my debt got sold. This doesn’t seem fair at all. I don’t know what to
Sara (Debt Camel) says
Well you can complain they didn’t treat you fairly initially when you saud you had problems. Did you fail to get through security?
But if you refused to talk to them did you really think the debt was going to go away? It doesn’t work like that.
What sort of debt was the original debt?
Martin Wildgoose says
Hi, I have been contacted by Cabot recently about an old Aqua card debt that defaulted in 2017. I contested this about seeing the CCA agreement which they have now given me along with a final response letter. I have contacted Aqua to see if they have any statements of mine but they said they were no longer on file as it was too long ago. I built up the debt gambling and had a few credit limit increases during that period but without anything on record now to prove that I guess I can’t take it any further. Thanks
Sara (Debt Camel) says
When did you last make a payment to this?
Michael says
May I mention that creditors view sites like this and the use of one’s own name, or family name, is often a bad idea. A debtor may undermine their negotiating position by undue disclosure. I believe disclosures elsewhere have been cited in court proceedings. If nothing else, a debtor can reveal their state of mind prior to negotiations, undermining themselves Play safe, use a pen name or just a first name.
Martin W says
April 2018
Sara (Debt Camel) says
ok in that case it can’t be statute barred.
You could send Aqua a subject access request (email dpofficer@newday.co.uk) and ask for a copy of all personal information that they hold about you. It’s a long shot, but if you just asked for statements, then they may no longer have those but still have a list of transactions, charges etc.
Otherwise you need to decide how to deal with this debt. What are the rest of your finances like at the moment ? Do you have other old debts you are hoping will not reappear?
Martin W says
Hi this is the only debt on my credit file, I did ask for any information when I rang them and the only thing they said is I asked for a credit limit increase in 2015
Rachel says
Hi Sarah, I have a debt with 118 money which I took out in 2017. My circumstances changed and the last payment I made was December 2017. I called them to explain my situation and they told me to contact them again when I was in a position to pay the debt. I have not contacted them since, however I have received an email from them this month stating that if I do not make any payments then they ‘May’ sell this debt. My question is, would this debt become statute barred in January? Also are they likely to sell this debt with it being so close to the 6 years time? I am still not in a position to pay anything towards this debt (I am not working at the moment or receiving any income due to reasons I will not go into, my partner provides for us. No benefits etc…
Sara (Debt Camel) says
My question is, would this debt become statute barred in January?
That may depend on when a default was added, see https://debtcamel.co.uk/statute-barred-debt/ and talk to National Debtline on 0808 808 4000 about this.
Also are they likely to sell this debt with it being so close to the 6 years time?
Yes this is VERY likely. And the debt collector buying it may go to court to get a CCJ.
I am still not in a position to pay anything towards this debt (I am not working at the moment or receiving any income due to reasons I will not go into, my partner provides for us. No benefits etc…
Do you have other debts as well? Do you own any assets eg part of a property or a car with over £2000?
Rachel says
Thank you very much.
No I don’t own a car or a property. I am living with my partner in his home.
Regards to the default, is that the date that is showing on my credit record?
Sara (Debt Camel) says
Is that date showing as a default date? Or a missed payment?
Rachel says
It is showing as missed payments from Jan 2018-Sep 2018 then from October 2018 is showing as default on credit report.
Sara (Debt Camel) says
Then you should probably assume that this won’t be statute barred until Oct 24. Talk to National Debtline about this and about your options, as that is a long while and a strategy of hoping it will become statute barred isn’t likely to work.
Katie says
I had a credit card with marbles and this was taken over by Cabot about 2018. No payments were made until recently when they offered 50% off and I set up a payment plan for 3 Payments. I have since had a bailiffs letter from Lowell for the same debt. They have issued a CCJ last year which I didn’t know about. How can they both have same debt? It was for £400
Sara (Debt Camel) says
This is the first communication with Lowell that you have had?
Katie says
Yes I didn’t know they had issued a CCJ. I have been trying to ring number on letter but can’t get through. Do I continue with payment plan with Cabot or do I have to pay this?
Sara (Debt Camel) says
At the moment you have no idea what is happening. Looking at your email address, you beams sound pretty common, so it may be the CCJ relates to another person completely and not you. I would carry on paying Cabot.
Dan says
March 2022 i entered into a DMP for various debts. After a couple of months i received communication from my DMP provider to say one of my debts had been sold, an £1150 overdraft.
Just over a year and a half on Ive discovered that from august 2022 to September 2022 after they had accepted the dmp and had frozen interest the company who had purchased my debt was claiming it was a debt of £6100. I had not recieved any further correspondence from either the DMP company or the company that purchased the debt.
Am i too late to dispute this? Do i have any rights in this situation?
Sara (Debt Camel) says
So how did you find this out – did your DMP company tell you? Have you seen this balance on a credit report? Or did the debt collector tell you?
Rachel says
Hi, I have been contacted by Resolvecall (with no details of the debt). I’m unsure what the debt is and if it’s even mine but it will definitely be much older than 6 years now if it is mine. I called Resolvecall and said I have no details of a debt and it would be statute barred if mine. They said they will close their account and hand it back to the creditor. What doesn’t this mean?
Sara (Debt Camel) says
You shouldn’t hear anything more.
Rachel says
Thanks Sara. As I said, there’s nothing on my credit file regarding this. Is it likely to be added from resolve call or the original creditor in the future or not if the alleged debt is so old?
Sara (Debt Camel) says
as the debt is so old, it shouldnt appear at all. But it’s a good idea to keep an eye on your credit record. If it does pop up again, try to reply in writing eg email rather than on the phone. So you have a record.
John Keating says
I took out a mobile contract, that I’ve never used, to keep my T.V./Internet/House phone bill down.
The mobile provider has informed me that I have an outstanding debt – one monthly payment – of £29.32
They have passed this £29.32 to a debt recovery agent
Will a debt recovery agent really chase and argue this outstanding amount?
I don’t accept the debt, however, regardless, I am surprised this amount would be such a major issue
Is there a debt amount where the recovery costs outweigh the debt and make it unjustifiable to pursue
Sara (Debt Camel) says
Not really. Well possibly less than a pound. All the chasing and contacts are automated.