What can a creditor do if I can’t pay my debt?

Last Modified 16th of February 2021

You might have heard plenty of horror stories on how debt collectors enter people’s homes and demand large sums of money or take their possessions but fortunately it isn’t true for most people in debt. As a debtor, you still have rights against creditors, which could help you pay off your debts with less hassle and stress.

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How to deal with debt collectors

This all depends whether they’re doorstep collectors or bailiffs – the latter have more power but doorstep collectors don’t have a lot of power. Unless doorstep collection agents have special court permission, they cannot access your property by force or any other way and they can’t take any goods from your home. As a general rule, most lenders won’t use doorstep collectors unless it’s the last resort. This is because it costs them more money than it does to call you and send you letters. The doorstep collectors have no more rights than they would if they called you but they tend to be a lot more persistent.

What creditors can do

There are a handful of things creditors can do if you’re in debt. This includes:

  • Chasing you by phone or post
  • Collect money from any connected bank accounts, but they will need to warn you in advance
  • Add interest fees within reason
  • Issue a default notice after 3-6 missed repayments which can stay on your credit file for six years unless you bring your account up to date within 2 weeks
  • Pass debt to a debt collection agency
  • Sending doorstep collectors
  • Apply for a County Court Judgement (CCJ). This is often used as one of the last resorts as it costs time and money. If you do get a CCJ then it’s crucial that you stick to repayments because it will majorly eat into your credit score
  • Issue a statutory demand if you owe over £5,000. This is the first step towards bankruptcy.


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What creditors can’t do

Of course, you do have a few rights. Here are some of the things creditors can’t do:

    • Harass you. This includes calling you non-stop, as well as stalking you on social media. You can request that they only contact you by post. If you do this then it’s important that you actually open any letters from them and respond accordingly.
    • Threaten you with pretend legal action such as sending impersonation court documents or sending bailiffs to your home (they will need court permission to do this)
    • Speak to anyone you know about your debt including family, friends and employers.
    • Add too many interest fees or additional charges. All interest fees must be within reason and adhere to the original contract. They also cannot profit from collection charges such as sending you letters or hiring collection agents.
    • Lie to you or be abusive.