HERE YOU GO FOLKS, SLING SOME OF THIS AT THEM. Dont let them win and make you feel bad, you can get through this. Just keep telling yourself youre doing your best that you can do. Youre not alone either.
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Right you worms, get ready for turning! It's time to put these collection agencies in their place!
WARNING – LONG POST
This post has been inspired by a number of people who of late, have been reduced to tears and in one or two cases, have even thought about 'ending it all'.
UNDERSTAND THIS, AND UNDERSTAND IT WELL! – YOU OWE CREDITORS MONEY, NOT YOUR LIFE!
Yes, your creditors or their agents are allowed to contact you if you default on a loan repayment or credit agreement. They are even allowed to contact you at work (but they must not discuss your debts with your work colleagues) or call at your home to discuss the matter with you (although you are not obliged to discuss it with them and you are perfectly within your rights to ask them to leave). But what they are NOT allowed to do is to harass you, discuss your situation with neighbours, pretend that they have more powers than they do have, pretend that they have the right to visit your home and take away goods or add collection fees to your debt, call you repeatedly at work or during unsociable hours.
Regrettably, some over zealous collection agencies seem to be flouting the laws because they know that most people are not aware of what they can and can't do. There are a number of laws that protect people in debt from unreasonable behaviour from creditors or their agents, namely, Section 40 of The Administration of Justice Act 1970 and specifically, The Protection from Harassment Act 1997.
Let's be clear about this, it is a CRIMINAL OFFENCE if a creditor or their agent makes demands for money in such a manner that it causes the debtor or his/her family, alarm, distress or humiliation. Specifically, harassment is a criminal offence under Section 2 of The Protection from Harassment Act 1997 and punishment on conviction, is six months' imprisonment and/or a level 5 fine (up to £5,000).
Before we can begin to tackle harassment, I think it is relevant to understand why creditors or their agents use 'questionable tactics' in their endeavours to collect in delinquent accounts. In a nutshell, it is fear. The first thing that happens is that they realise that they are not the only creditor. Upon this realisation it seems to set off an 'every man for himself' reaction and they appear hell bent on forcing as much payment as they can, in as quick a time period as possible, from their 'victim'. The idea here seems to be, damage limitation. “The more we can get in now, the less we are likely to lose in the long run”. In my opinion, this is a very short sighted policy and in fact only serves to worsen the situation and in many cases, actually tips the decision to declare bankrupt.
Let's look at some of the more common threats or tactics used by these 'debt collectors' and analyze them a bit.
1. “We won't accept £25 per month, we will only accept a minimum of £38.50 per month and if you don't pay this, we will take you to Court.”
It's the 'Take you to Court' part that is designed to frighten you and understandably this does get results for them. No-one wants to go to Court do they? Or do they? First of all, the threat of Court action is usually an empty one and this action is usually reserved for people who won't make any kind of payment or who ignore them. If you do what we recommend on this board, produce a statement of affairs and make a realistic offer in line with your ability to pay, there is no way in this world that they would take you to Court. Why? because the likelihood is, that the Judge would absolutely wipe the floor with them for wasting Court time and it is even more likely that the Judge would make an order for payment for LESS than what you actually offered and also it is likely that the Judge would not award them any costs. FACT: the Courts will not permit your income to be lowered below a level which you require to subsist. So, if you can't afford to pay more than you've offered, there is not a Law which will make you do so. Creditors know this but they are banking on the fact that you do not – now you do.
2. “If you don't pay us at least £50 a month, we will send one of our collectors round to your house”
And? Let me know what time he's coming and I'll buy a cake, is it one sugar or two? Again, it is the 'fear' of someone turning up on your doorstep that they are relying on to get you to commit to more than you can afford. Debt collection agencies do have a license to make 'site visits' (within reasonable hours) to your home to attempt to discuss the matter with you although they very rarely do this because it costs them a lot of money. However, they have absolutely no right of entry, they have no right to take anything from you and you are under no obligation to discuss anything with them. Very often you will get more sense from a visitor than you would with someone calling you over the phone so I'm not saying categorically don't discuss anything with a collector if they do turn up, but I am saying don't feel intimidated and don't feel obliged to do so. If you are not comfortable discussing the matter with a visitor, keep cool and ask them to leave, if they refuse to leave, tell them they are trespassing and that if they don't leave, you will call the police. If they remain, call the police, tell them that someone is trespassing on your property and there is likely to be a breach of the peace.
3. “If you don't pay us now, we will send the bailiff around next week to seize your goods” – 99% of the time this is total hogwash. Unless they have a County Court Judgment against you, they can not instruct a Bailiff. Even if they do, contrary to popular belief, you do not have to allow a Bailiff into your home and they cannot force access.
These are the three most common frighteners that they will use. Now if this doesn't have an immediate effect, they will resort to harassment, that is, they will call you on the phone continually, some times being mean and nasty. This means that they are getting desperate and whilst you should recognise it for what it is, there is no way that you should put up with this, so how should you tackle this?
Well, the first and most vitally important thing to do is as I said previously, is to work out your expendable income by deducting all of your essential outgoings from your total income, this will leave you with your expendable income. From this figure deduct £50 per month for emergencies because they do happen (boilers have an alarming tendency to break down in the middle of winter) and with the remainder work out a pro-rata payment plan. This way, the larger creditors get a proportionately larger payment and the smaller creditors get a smaller payment. To do this you first need to calculate the 'Multiple' this is the figure which you will multiply each individual debt by, to determine who gets paid what.
For example, for simplicity's sake, let's say that your total expendable income is £400 per month and you have 3 creditors, creditor 1 is owed £10,000, creditor 2 is owed £7,000 and creditor 3 is owed £3,000. You have a total debt of £20,000 and you have £400 per month to service the debt. First, divide £400 by £20,000, this will give you a Multiple of 0.02. You then multiply this figure by the amount owed to each creditor, so using the above example, creditor 1 would get 10,000 X 0.02 = £200 per month. Creditor 2 would get 7,000 X 0.02 = £140 per moth and creditor 3 would get 3,000 X 0.02 = £60 per month. This would take 50 months to pay off.
OK, now that you have worked this out, you should send by recorded delivery , a copy of your statement of affairs together with your proposal of payment to your respective creditors. It would also be a good idea to send the first payment cheques to them at the same time, as a gesture of good faith It is also a good idea to include in your letter, the fact that you will review the situation every three months and that if circumstances permit, you will increase the payments. If you use recorded delivery, you can prove receipt of your correspondence by using Royal Mail's track and trace facility on their website here:
http://www.royalmail.com/portal/rm If you do this properly, this should make the situation clear to the creditor and even if they don't like the proposal, they will realise that there is nothing more that you can do about it. A point to note here: if £1 per month is all you can afford, do not be tempted to increase the offer because 'it doesn't sound much' if that's all you can afford then that's the end of the matter. The worst thing that you can do is to be intimidated into paying more than you can afford because this will inevitably break down and you will have set yourself a bad track record.
Now the fun starts. Creditor 1 isn't happy that he isn't getting the £400 a month that he's supposed to be getting so he sends for Dennis the Debt collector. Dennis is a real mean sunamabich, 5'2” and seven stone soaking wet but he has the meanest tongue in debtcollectorland. Dennis has learned his trade well and he can use his plastic phone to reduce you to tears in a heartbeat and get you to commit to ridiculous payment proposals so he can get his bonus. Dennis makes dozens of phone calls a day because he knows that he can frighten people by being nasty, telling lies and shouting down the phone. Remember Dennis the next time he calls and realise what he is using to frighten you, it's a piece of plastic, it's not moulded to your ear, if you don't like what you hear in the earpiece guess what? You can put it down and if Dennis rings again, you can go and make a cup of tea (Dennis is paying for the call) and if he's still there when you've had your cup of tea, put it down again. Repeat as often as necessary. You can actually leave the phone of the hook for a couple of hours if you want.
OK, so Dennis starts ringing you at work or starts ringing you regularly, what do you do? Let's play out the scenario:
Phone rings:
You: Hello
Dennis: Hello you, I have been trying to call you all night over this debt that you owe to grabbit and runn
You: Oh really Dennis, why is that?
Dennis: well, we are not happy with your proposal and we want more from you
You: Well I'm sorry but I am just not able to pay any more than I've offered
Dennis: I don't care about that, we want £400 a month or we'll take you to Court.
You: is that so? Well I guess you had better start your proceedings then. I'm sure that the Judge and myself in particular will be very interested in finding out how I am going to be able to conjour up this extra payment when I have made it absolutely clear that I am unable to pay any more. Incidentally Dennis, you would actually be doing me a favour if you did because then, apart from the Judge giving you an almighty rollicking for wasting Court time, he would likely make an order for the payments to be lowered.
Dennis beats a hasty retreat at this point because he has discovered someone who know their rights so he is off to attempt his terror tactics on someone else.
Scenario 2:
You: Hello
Dennis's Mate: Hello you, it's us and we want more money out of you
You: Did you know that I spoke to Dennis last night about this?
Dennis's Mate: I don't care about that, you owe us money and boy, if you don't pay there is going to be real trouble.
You: Look, I am getting tired of this, I have given you my written proposals based on my realistic ability to pay, I am not trying to avoid payment, I am simply not able to pay any more than I have offered.
Dennis's Mate: Yeah well, I've heard it all before and as I said I don't care, if you don't make a payment right now, we are sending someone round to your house tomorrow.
You: Really? Well, let me just make you aware of this. I am now taping the rest of this conversation: (Pause for effect) and I am putting you on notice, that I intend reporting you to the Office of Fair Trading, under Section 40 of The Administration of Justice Act 1970, for Harassment. Furthermore, I will from this point on, only communicate with you in writing and if I receive one more telephone call from you or your organisation, I will see that you face criminal proceedings under Section 2 of The Protection from Harassment Act 1997 and before you say anything further, you may be interested to know that your consumer credit license will not protect you from prosecution. Are we now absolutely clear on the matter?
Then put down the phone and write the following letter:
Dear Sirs,
RE: Your Client – Grabbit and Runn Credit Card
I refer to my correspondence of (date) regarding the debt that I owe to your above named client. A copy of this correspondence is enclosed herewith, for ease of reference.
Since making my financial position clear to you, I have been constantly harassed by your operatives, who have attempted to intimidate me into making payments that I simply cannot afford to make, under my present circumstances.
I wish you to know, that I am aware of my rights and that your constant telephone calls are a breach of Section 40 of The Administration of Justice Act 1970 and any further incidents of this nature constitute a course of conduct, which is a criminal offence under Section 2 of The Prevention from Harassment Act 1997.
Please note, that whilst I take my obligation to you seriously, I will not tolerate such abuse and if I receive any further telephone calls from your organisation, I will have no hesitation in reporting the matter to The Office of Fair Trading, whom you may be interested to know, are currently encouraging reports of this nature.
I would be obliged if you would kindly acknowledge receipt of this letter and confirm that there will be no further attempts to contact me by telephone. I am entirely happy to communicate with you in writing and would be obliged if you would give my proposals, serious consideration.
Yours faithfully
Etc
This should do the trick, but, if it doesn't, keep your cool and report them to the Office of Fair Trading and your local trading standards office.
PLEASE PLEASE PLEASE USE IT
I hope that this will help some of you put things into perspective. Remember keep your cool at all times, don't be intimidated by a piece of plastic, if you don't like what you're listening to, put the phone down and remember the most important thing of all is to put and get things in writing at all times. If you think this will help, print it off and keep it near your phone – have fun.
