How Much Do Debt Collectors Buy Debt for in the UK?

Are you curious about how debt collectors work in the UK? Wondering about how much they buy debt for?

You are not alone. Every month, over 12,000 people come to this site seeking advice on debt topics.

In this article, we aim to explain all you need to know about this process. We’ll explore:

•  Why debt collectors buy debts and why people sell them
•  How you can lower your repayments
•  How to find out if your debt has been sold
•  What happens when the debt is proven to be yours
•  The rights you have when your debt is sold

We understand that dealing with debt can be tough and scary; many of us have been through it. We hope that by sharing our knowledge and experiences, we can help you manage your situation better.

Do you have to pay debt collectors?

You might not have to pay debt collectors.

If you genuinely can’t afford your debt repayments then looking into whether you could have your written off might be just what you need. 

If you want to find out whether you qualify for having debt written off or payments lowered then fill out the short form below.

Why do debt collection agencies buy debts?

Debt collecting is big business in the UK. Especially these days when more people are finding it difficult to make ends meet. It means that debt collection agencies make even more money from other people’s hardships than ever before!

Moreover, there’s more money to be made in ‘buying’ debts from creditors than just chasing you for a payment on their behalf!

For example, a debt collection agency could buy a third-party debt for a fraction of its actual value. So, a successful debt collection could bring in a huge profit for them!

Debt collectors never buy debt for its true value because there’s no money in doing that! They can pay 10p for every pound when they purchase a debt depending on its value.

In short, creditors are good at lending but not so good at ‘chasing’ debtors! They prefer to take less money on a debt to resolve the problem rather than invest more time and money in taking you to court!

Debt collection agencies are experts in recovering money that’s owed and their tactics are often questionable!

Check out what happened to one person below:

Source: Moneysavingexpert

Why do people sell debts?

A creditor sells debts rather than chases people for payments. A debt collection agency or debt purchaser buys debts to collect on the amounts owed. It means the original creditor no longer has any involvement in recovering the outstanding amount.

Can you lower your repayments?

If you’re struggling to pay back your debt, then you might qualify for a debt solution.

Some solutions lower your monthly payments while others write off a portion of your debt. 

To find out whether they could work in your situation, hit the button below.

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How do you know if your debt is sold? 

Chances are the company you owe money to will write telling you the debt is now owned by a collection agency. It’s a legal obligation for the original creditor to let you know they’ve sold the debt.

Following this, you’ll likely receive a letter from the debt collection agency telling you they own the debt! Their letter should provide the original creditor’s name and your account reference details.

If you feel the information regarding the debt is wrong, write back to the debt collector as soon as possible. Ask them to ‘prove’ the debt is yours in writing. 

Don’t just accept the debt collector’s word for it!

Can I ignore letters from a debt collector?

No. Even when you know the details are wrong and you don’t owe any money. Why? Because by ignoring things, you could end up missing out on:

• Discovering the debt isn’t yours and therefore the debt collection agency must stop contacting you
• Finding out the debt is at least six years old and therefore statute barred. It means the debt collection can’t force you to pay. They can ask you to pay but you can refuse. Moreover, you won’t get a CCJ if the debt is statute-barred
• Being offered a realistic repayment plan from the debt collection agency
• Having part of the debt wiped off

That said, you could also end up having to face:

• Court action to recover a debt
• Having default notices registered on your credit history
• Dealing with Enforcement Officers (bailiffs) if the debt collector wins a case in a small claims court
• Having some of your possessions seized by bailiffs
• Having a lien placed on your earnings!

Should you seek debt advice from a charity?

Yes. You should seek advice from a debt charity if you’re confused or unsure about things or the way you’re being treated! Also, discussing the problem with a debt charity helps when it comes to sorting out an affordable repayment plan.

Debt collection agencies must allow you enough time to seek advice and find out about your best options. If they don’t, it could be deemed as harassing unlawful behaviour.

The advice a debt charity offers is free and impartial!

Do your rights change because a debt is sold?

No. You have the same rights whether it’s the original creditor or a debt collector who’s chasing you for payment. Debt collectors have no more power than the original creditor.

Moreover, debt collectors must abide by the law and are governed by the Financial Conduct Authority (FCA). In short, your rights remain ‘protected’ when a debt collector buys a debt from an original creditor.

Do you have to pay the debt collector?

No. Not before they’ve provided written and authenticated proof that you owe the money! You shouldn’t admit, sign, or pay any money to the debt collector until you receive written proof!

So, the first thing to do is ask a debt collector to ‘prove’ the debt is yours when they first reach out to you!

What happens when the debt is proven yours?

You should negotiate a settlement with the debt collection if they prove the debt is yours. For instance, you should offer to pay anything from 30% to 70% of the debt as a final settlement.

If the debt collector agrees, the fact you’ve settled the debt is registered on your credit history.

What debt help is there in the UK?

There are several debt charities in the UK you could reach out to. Their advice is free and it’s impartial which could prove invaluable!

I’ve listed three major debt charities below:

“It will only get worse” 😩

It’s cliché to say, but with debt it’s true; the longer you leave it, the worse the problem gets. 

There are straightforward and effective ways to deal with debt, but you have to know your options. 

Fill out the short form to find out about the debt solutions that could reduce your monthly payments or even write off some of your debt.

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Lastly, how much do debt collectors buy debt for in the UK?

Debt collection agencies are notorious for buying up debts for a fraction of their value. They make more money than when they act on behalf of a creditor when they do!

That said, debt collectors often buy older debts which means some of them could be statute barred! So when a debt collector chases you for payment, don’t ignore the letters.

Instead, write to the debt collector and ask them to prove the debt is yours. Then check if the debt is at least six years old. If it is, a debt could be statute barred and therefore unenforceable!

Thanks for reading this post. I hope I’ve answered the question “how much do debt collectors buy debt for in the UK?” and how to deal with a debt collector when they contact you!