Your Money Haven

Bad debts disasters

17 March 2008

With credit agencies now chasing some £21 billion in bad debt across the UK, innocent budgeters on the hit list of debt collection agencies are being advised to know their rights, the Independent has reported.

Debt collectors operate by buying debt from bigger companies for a bargain price and they specialise in tracking down the debtor and taking legal action to recover their money.

Godfrey Lancashire, a representative from the Credit Services Association, says that the law as it stands makes it much more difficult to track down potential debtors and new tenants and owners of a property could find themselves fielding demanding letters or phone calls.

"There's no legal obligation for debtors to tell their creditors when they move. We're one of only three countries in Europe [as well as France and Greece] where this is the case," he told the Independent.

Citizens Advice spokesperson, Alex MacDermott told the newspaper that debt collectors who threaten to repossess your property have no right to do so without a county court order and should be reported for bad practice if they do.

Any unpaid debt in the UK after 60 days is classed a debt recoverable and can go onto a third party.