How long before debt collectors take action?

Debt can quickly creep up on people. Maybe it is because of a period of unemployment, unexpected costs, the breakdown of a relationship or even a lack of understanding of how best to manage your money.

Whatever the reason, if you find yourself facing debt you can no longer manage, do not bury your head in the sand and hope that it will go away.

The debt recovery process:

While not every creditor will follow the exact same debt recovery process and timeframe, in general terms you can expect the following when you miss payment(s):

  1. A friendly reminder – If you miss a payment you will likely be sent a friendly reminder to ask you to pay asap.
  2. Overdue payment reminder – If payment doesn’t follow the friendly reminder your creditor (the person or business you owe), will send you an overdue payment reminder. A missed payment may well appear on your credit score which could impact your ability to get future credit.
  3. Final notice request – At this point it is likely to be some weeks since your initial payment was due, and your creditor will now be pushing for payment with a final demand.
  4. Direct contact from creditors – You may now begin to receive calls and letters from your creditors demanding payment.
  5. Default notice letter – This is a formal letter stating you have 14 days to make payment or your creditor will pursue legal proceedings.
  6. Debt collection agency become involved – Your creditor may choose to pass your debt onto a debt collection agency who will contact you and chase for payment. At this stage you may be able to negotiate a payment plan you can afford.
  7. County Court Judgement (CCJ) process begins–  If your creditor does pursue legal proceedings you may find yourself facing a CCJ. You have 14 days to respond to the court claim. The judgement will tell you how much you owe and when you need to pay it by.
  8. Bailiffs – If your creditor has obtained a CCJ and you have not complied with the ruling, then bailiffs could be sent to your property to recover goods to the value of your debt. Remember, costs and interest will also be added so at this point your debt may have risen significantly.

A missed payment through to goods being seized by bailiffs will take in excess of six months and throughout the process you should have the opportunity to prevent the debt escalating further by negotiating with your creditor(s) a payment plan that suits your circumstances.

If your finances are escalating out of control, take charge immediately. Get organised by taking stock of your finances and finding out exactly who you owe, how much and when payments are due. If you know you cannot make your next payment, contact your creditors and explain the situation. Work out beforehand how much you can afford to pay and propose this to your creditor(s) before debt collectors take action. It may also be worth contacting a debt advisor who can offer free advice on the options open to you.

While debt is undoubtedly stressful to individuals, businesses too can feel its impact. No matter the size or type of business, getting paid what you are owed is vital to your continued success.

While pursuing debt recovery through legal means should be a last resort, if the matter needs to be escalated, our debt recovery team are on hand to support you every step of the way.

Our experienced team are trusted by businesses from across a wide range of sectors and in 2016, pursued debts in excess of £30m.

For more information on our debt recovery services, including Activate, our online debt recovery service, click here.

If you’d like to find out more about the legal services offered by Smith Partnership, don’t hesitate to contact us via Alternatively, speak to a member of our team directly on 0330 123 1229.