Debt Collection Processes & Timeline – What To Expect

If you are facing financial difficulties and worried about being able to pay your bills, knowing how your creditors are likely to deal with you can help make the process feel less stressful. And you’re not alone – more than 170,000 people visit our website every month to get answers to their debt questions.

In this guide, we’ll help you understand:

• What happens when you miss payments to your creditors
• What you should do if you miss payments
• When you should pay debt collectors

If you are seriously struggling to pay your bills or deal with your debts, you might benefit from a debt solution. 

Remember that different creditors will react differently to missed payments or debts, so the following is just a guide. You also need to keep in mind that a debt collection agency can be employed by your creditors to chase you for the debt or can buy your debt from your creditors at any point in the following:

Missed Payments

The first thing that will happen is you miss some payments to your creditors.

You will by now have received letters or phone calls from your creditors telling you that you owe them money. You should be offered chances to make up any missed payments or to bring your account up to date. 

What should you do?

If you are at this point, you need to keep in contact with your creditor. Regular contact might be enough to prevent them from selling off your debt to a debt collector.

Your creditor might be sympathetic at this stage and work with you to avoid debt collectors altogether.

Missing More Payments

If you continue missing payments, your creditors will likely get more firm with their tone. You could also be threatened with further action to get you to pay.

If your debt is regulated by the Consumer Credit Act, your creditor can default your account. This will have a big impact on your credit file and make your finances worse.

You will usually receive a Notice of Default after 6 months of missed payments or 6 months of underpayments. This Notice will give you at least two weeks to pay what you owe. If you can’t or don’t pay, your account will default.

After a default, your creditor can take action against you to collect. This can mean that they get a debt collector to chase you for the debt.

What should you do?

At this point you might be able to negotiate with your creditors and develop a payment plan to help you get back on track. You can try to negotiate reduced payments for a while or a brief payment holiday.

But if your debts are building up and you have no way of paying it off, you might need to consider a debt solution.

If you aren’t sure what to do, you can speak to a debt charity like TDAS for free and impartial advice.

Legal Action

If you still haven’t paid your creditors, you will have received many letters and phone calls about it. Any Consumer Credit Act regulated debts will probably have defaulted by now. You might even be facing legal action.

If you live in Wales, Northern Ireland, or England, your creditors might consider getting a County Court Judgement (CCJ). 

If they do, you could be issued a court order that will tell you how much you owe, how you are to pay it, who you are to pay it to, and when you are to pay it. You can face further legal action if you don’t comply.

What should you do?

If you haven’t already, you need to get some advice if you find yourself at this stage. You need legal advice if a CCJ is brought against you. Debt charities will be able to help.

Will I Be Chased By Debt Collectors?

When you owe a debt to a creditor, they can sell it off or employ debt collectors to chase you. This is when you might be chased by debt collectors. 

Unfortunately, debt collectors each have their own policies and timelines, making it impossible to guess specifics on how or when they will contact you. 

However, pretty much all debt collectors will start off by writing to you or calling you. There are no limits on how often they can contact you as long as this isn’t unreasonable or constitutes harassment. They must also stick to your preferred contact methods if you request. 

If you think a debt collector is harassing you or being unreasonable, you should make a complaint. Use our free letter template to write your complaint if you need guidance. 

Will Debt Collectors Come to My Home?

Debt collectors might do a home visit if you ignore their letters or phone calls for a while. They might also visit your home if you don’t stick to a repayment plan that you had previously agreed. 

You do not have to let them into your home if they turn up. They have no right to entry, and they have no right to take any of your belongings. Only a High Court Enforcement Agent or a bailiff can seize your goods if they have a warrant.

Keep in mind that while home visits can happen, they’re a bit unlikely. The costs of sending a debt collector or two to someone’s house are much higher than writing letters or even making lots of phone calls. 

That said, if you are being chased for a high-value debt, they can make a higher profit from you, so home visits are more likely. 

If you think the debt collectors are being unreasonable or have broken any of the FCA’s guidelines, you should make a complaint. Follow our guide if you are unsure and get some practical hints and tips.

You can also look at our short guide and learn more about debt collector’s rights and, more importantly, their limits when trying to get you to pay.

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What Do I Do If I’m Contacted By a Debt Collector?

If you are contacted by debt collectors, we don’t recommend ignoring them. They’re probably going to contact you more and more frequently and cause more problems down the line. 

First, ensure you are dealing with a legitimate company by checking the Financial Conduct Authority’s (FCA) register. All debt collection companies must be registered to work in the UK. Not on the register? Don’t pay. They might be scammers, and you can report them to the FCA.

Now, you must check that you are liable for the debt. You can use our free ‘prove it’ letter template to get proof that you are liable – you don’t have to pay until you have been shown evidence that the debt is yours. 

Once you have been given a copy of the debt collector’s evidence against you, make sure that it is enforceable. Most unsecured debt that hasn’t been paid in 6 years (5 in Scotland) is statute-barred, and you can’t be made to pay it. 

Is the debt too old to be collected? You might want to write to the debt collectors and explain.

If you are unsure at any point, you can contact a debt charity for free and impartial advice. Debt charities like TDAS will be able to walk you through your options and work out what is the best solution for you. 

Do I have to Pay a Debt Collector?

If you have verified that the debt collectors are working legitimately, that you are actually liable for the debt, and that the debt is enforceable with the above steps, you will probably have to pay.

You might be able to negotiate with the debt collectors and get a reasonable repayment plan in place. Ensure you don’t agree to repayments you can’t afford.

Talking to a debt charity like TDAS might help. They will be able to recommend a debt solution that will help you get your debts paid off and collection agencies off your back.

Will How Much I Owe Change Things?

Yes, the amount you owe will change how debt collectors treat you. Debt collectors can buy debt for as little as 10p for every £1 so they make more money by chasing larger debts. 

Say two people are being chased by the same debt collectors for debts owed to the same creditor – one person owes £50, and the other person owes £2,000. A debt-collection firm could have paid £5 and £200 to buy these debts.

Recovering the first debt will mean a £45 profit. But recovering the £2,000 debt will mean a £1,800 profit. It’s clear which debtor they will put more energy into chasing!

It’s a similar process if your creditor is paying the debt collectors to chase you. The greater the debt being chased, the more the debt collectors can be paid. 

Of course, this example doesn’t take the cost of labour into account. Someone must be paid to write letters to you, phone you, or even make house visits. The cost of labour can mean that you are contacted less frequently for smaller debts – the wages of the debt collectors will eat into their profits so much that chasing you is not worth the hassle.