What Can a Creditor Do If I Can't Pay My Debt? Your Rights Explained
Published 20th of September 2016·Updated 16 April 2026
Reviewed by: Reviewed for accuracy April 2026
If you cannot pay your debt, creditors have several legal options available to them - but their powers are more limited than many people realise. They can contact you, add interest, pass the debt to a collection agency, and ultimately apply to a court for a County Court Judgement (CCJ). However, they cannot harass you, threaten you with fake legal action, or enter your home without a court order.
Short Summary
Creditors can chase you by phone and post, add reasonable interest, issue a default notice after 3 to 6 missed payments, and pass your debt to a collection agency. As a last resort, they can apply for a CCJ or issue a statutory demand if you owe over £5,000.
Doorstep collectors have no more legal power than a phone call. They cannot enter your home by force or take your possessions unless they have a court order. Bailiffs are different and do have greater legal authority, but only after a court judgement.
You have the right to request that all contact be made by post only. Creditors cannot discuss your debt with your family, friends, or employer. They cannot lie to you, threaten you with fake bailiff visits, or add charges that go beyond your original contract.
If you are struggling, free debt advice is available from StepChange (0800 138 1111) and Citizens Advice. Speaking to an adviser early gives you more options.
What can a creditor legally do if I miss payments?
Creditors have a range of actions they can take, broadly in order of escalation:
| Action | When it applies |
|---|---|
| Phone calls and letters | From the first missed payment |
| Default notice issued | After 3 to 6 missed payments |
| Pass debt to a collection agency | At the creditor's discretion |
| Send doorstep collectors | Usually a late-stage tactic |
| Apply for a County Court Judgement (CCJ) | Last resort; requires court process |
| Issue a statutory demand | Only if you owe over £5,000; first step towards bankruptcy |
A default notice will stay on your credit file for six years from the date it was issued, unless you bring the account up to date within the notice period (usually 14 days).
What can doorstep collectors do?
Doorstep collectors can knock on your door and ask you to pay, but they have no special legal powers. They cannot enter your property, take any belongings, or force their way inside. Most lenders treat doorstep collection as a last resort because it costs more than phone and postal contact.
If a doorstep collector visits, you do not have to open the door or speak to them. You can ask them to leave and request that all further contact be by post only.
What is a County Court Judgement (CCJ)?
A CCJ is a court order requiring you to repay a debt. Creditors apply for one when other methods have failed. If a CCJ is issued against you, follow the repayment schedule precisely - missing payments on a CCJ causes serious damage to your credit score and can lead to further enforcement action, including bailiffs.
A CCJ stays on your credit file for six years unless you pay the full amount within 30 days of the judgement, in which case it can be removed from the register.
What can creditors not do?
The Financial Conduct Authority (FCA) sets rules on how creditors and debt collectors must behave. Creditors cannot:
- Harass you with repeated phone calls at unsociable hours or contact you on social media to pressure you
- Send bailiffs to your home without first obtaining a court order
- Threaten you with legal action they have no intention of or legal basis for taking
- Discuss your debt with anyone else, including family members, friends, or your employer
- Add excessive charges or interest beyond what your original credit agreement allows
- Lie about who they are or pretend to be from a court or government body
If a creditor or collector behaves in any of these ways, you can report them to the FCA (fca.org.uk) or the Financial Ombudsman Service.
Can a creditor take money from my bank account?
A creditor can use a process called a "third party debt order" to recover money from your bank account, but only with court permission. They cannot access your account without going through the courts first, and they must notify you in advance if they intend to do so.
What should I do if I cannot afford to pay?
Contact your creditor as early as possible. Lenders regulated by the FCA are required to treat customers in financial difficulty fairly, which includes offering breathing space, payment plans, or temporary payment holidays.
If you need independent support, these organisations provide free advice:
- StepChange Debt Charity: 0800 138 1111 or stepchange.org
- Citizens Advice: citizensadvice.org.uk
- National Debtline: 0808 808 4000
Acting early keeps more options open. Ignoring the debt does not make it go away and typically results in more serious action from creditors.
FAQ
Can a creditor send bailiffs to my home without warning?
No. Bailiffs can only attend your property after a creditor has obtained a court order, which means the creditor must first apply for a CCJ and then apply for further enforcement. You will receive court paperwork before any bailiff visit is authorised.
What happens to my credit score if I miss payments?
A missed payment can be recorded on your credit file and will negatively affect your credit score. After 3 to 6 missed payments, the creditor can issue a default notice, which stays on your credit file for six years and makes it significantly harder to obtain credit during that time.
Can I ask a creditor to stop calling me?
Yes. You can request in writing that a creditor or debt collector contacts you only by post. Once you have made this request, they must comply. Keep a copy of your letter and send it by recorded delivery.
Can a creditor take me to court over a small debt?
Yes, there is no minimum debt level required for a creditor to apply for a CCJ, though creditors typically weigh the cost of court proceedings against the debt owed. Even small debts can result in a CCJ if ignored.
What is a statutory demand and should I be worried?
A statutory demand is a formal written demand for payment of a debt of £5,000 or more. It is the first step a creditor can take towards applying for your bankruptcy. If you receive one, take immediate advice from a free debt adviser such as Citizens Advice or StepChange, as you have 18 days to apply to have it set aside.
Will a debt ever be written off if I ignore it?
Most debts become statute-barred after six years in England, Wales, and Northern Ireland (five years in Scotland) if the creditor has not contacted you and you have not made a payment or acknowledged the debt in writing. However, this is a complex area of law and ignoring a debt carries serious risks in the meantime. Seek advice from a free debt adviser before assuming a debt is unenforceable.