Debt Collection Process

What is the debt collection process?

Different lenders have various ways to collect unpaid debts. The faster their act and attitude when they contact you, and the further action they going to take.

This means we cannot tell you when and what will happen if you have fallen into arrears but we can give you an idea of what to expect.

Your creditors will direct you to a free advice agency such as us for impartial debt help. The sooner you get advice the better.

The payments that you miss will get recorded on your credit file so you will find it even more complicated to get credit. But if your financial difficulties are short-term and you can pay off the debt or arrears at this stage, you might be able to keep your accounts open and continue paying them off as usual.


 What could creditors do: Find out what action your creditors can and cannot take and the process they will use to collect debt

 England and Wales court action: If a creditor starts a court action, you will need to act quickly to prevent further action

 Northern Ireland court action: How to deal with a money judgment and the process for recovering unpaid debts

 Scotland court action: What to do if you receive a decree or if you are facing diligence

 Eviction and repossession: If you are falling behind with mortgage or rent arrears you could lose your home.


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Your creditors will start off with the reminders via phone or in writing, asking you to redeem the payments that you have missed out on and bring your account up to date. The approach from your creditors may be sympathetic at this stage. They may ask you about your situation and if anything has changed it will make it harder to pay.
Your creditors may have put more pressure on you by now and you may find the tone of their letters or calls firm. They may start to threaten you with further action. You will probably find that many creditors are still keen to point you for a free debt advice agency for help. If you have not already got advice, get in touch with us.

If your account is regulated by the Consumer Credit Act, you can probably expect a default notice soon, and shortly after that your account will default. This will have a big impact on your credit file and make it a lot harder to get further credit.

You will probably be getting to a point now where your accounts will get closed and further action is getting started. Your creditors are likely to pass your debts to collection agencies, so you may start to get contact from new companies.
By now, you will have countless letters, phone calls and other contact from creditors.

Any regulated debts you have such as credit or store cards, personal loans, payday loans, hire purchase, catalogues or overdrafts are likely to be defaulted by now. These creditors may have taken some further action by this stage.

The most common action after an account has been defaulted is for a creditor to pass it on to a specialist debt collection agency. This has probably happened by now.

Other more serious action could have happened or could potentially be coming soon. For example, some creditors may be thinking of taking your debt to court and applying for a CCJ (County Court judgment).

Your credit file will seriously get affected by now but that shouldn’t be your main concern. If things have gotten to this stage, it is important to get advice and start sorting out your debts. It is never too late to contact us to start getting your finances back in order.

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