2nd May 2012
Debt Advice Scotland Information About Debt Collection Agencies
This week the Credit Services Association has published data regarding the activity of debt collection agencies and debt purchasers around the UK. They’re becoming increasingly busy; currently they’re chasing a staggering total of £58bn from UK consumers (debts owed on 32 million different accounts). On average every adult and child in the UK is being chased for around £1000 by a debt collection agency. This debt advice Scotland article looks into why debt collection agencies are so busy, and the implications for those that are being chased for repayment.
In recent months we have published articles in this debt advice Scotland news section suggesting that the average person in the UK is borrowing less than they were previously, and repaying more of what they owe. This might suggest that the public are bringing their debts under control. Average figures can be misleading however, and the Credit Services Association figures demonstrate that a very significant number of people remain in deep financial trouble. The amount of debt being chased by debt collection agencies has been increasing by £1bn per month and there are four million more debts being chased by DCA’s than there were six months ago.
If you’re being chased for payment by a debt collection agency our debt advice Scotland professionals firstly suggest that you do not panic. DCA’s are very adept at utilising language (both verbally and in writing) that intimates that they have powers vastly in excess of those that they actually possess. These processes seem to be designed to shock people into working with them to set up a repayment plan. Their powers are actually extremely limited, but they do have a job to do and therefore can be very persistent.
People often approach debt advice Scotland agencies when multiple debt collection agencies (or debt purchasers) have become involved in their finances. It can be quite straightforward to deal with a single DCA and set up an affordable repayment plan with them. Once multiple debt collection agencies become involved people often find that they are pushed towards multiple repayment plans that, if you add them all up, aren’t affordable. The DCA’s often take little account of each other and each strive to maximise the proportion of your spare cash that is being paid to them.
In such situation debt advice Scotland advisers (which may be your local CAB or a trust deed firm for example) will take a step back from the competing financial demands of DCA’s (and other creditors) to focus on your ability to repay your debts. The aim is to work out, in total, how much spare cash you have free to repay all of your debts after your essential living costs have been prioritised.
This information is used firstly to advise you about the options open to you (for example a trust deed or the debt arrangement scheme). Secondly it is used to help construct a repayment proposal that you will find manageable and affordable and that your creditors can assess to be fair and reasonable in the circumstances. As well as providing information on debt solutions, debt advice Scotland professionals can also become a buffer between you and the competing (and sometimes aggressive) demands of debt collection agencies.
Threats of legal action can also be brought under control according to the debt advice Scotland forum experts. All of the formal debt solutions in Scotland will prevent legal debt recovery action by included creditors once established. This negates the legal fears of many people that are in debt, and especially those of homeowners who worry about the loss of their house if legal action were to proceed.
Debt advice Scotland professionals are available to answer your questions at Trust-Deed.co.uk. A panel of expert advisers can be found in our debt advice Scotland forum providing advice and insight on debt collection agencies amongst other subjects. Members also share personal experiences of how they have dealt with personal debt and the issues that surround it.
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