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My debt has been transferred to a debt collection agency

When you’re on a token payment plan (TPP) your creditors may pass your debts to a debt collection company, who take over the debt. If this happens it helps to know how this affects you and your plan.

When a debt is transferred to a debt collection agency they will take over ownership of your debt and you'll owe money to them instead. You'll need to let us know when this happens, so we can make any future payments to the debt collection agency. 

What do I do now? How does this affect my TPP?

Firstly, this is nothing to panic about. This is part of the normal debt collection process, and the new creditor must send you a letter explaining that the debt has changed hands. Any future token payments should be made to the debt collection agency instead.

The letter you receive may ask you to get in touch and arrange payments, or ask you to pay in instalments. However this doesn’t mean you should start paying the new creditor more than you were paying originally.

What do I do next?

You should contact our current client phone line as soon as you get confirmation that a debt has been transferred or sold. Please have the letter available when you do this, as we may need some details from it.

As your TPP provider we need to know when a debt’s been transferred, so we can make sure your payments are going to the right place.

Will a bailiff visit my home?

Debt collection agencies aren’t bailiffs (enforcement agents) and don’t have any special legal powers. They have the same rights as the original creditor, and they usually specialise in collecting debts where the original creditor can’t get arrears repaid.

Collection agencies may tell you that someone could visit you at home. This person will be a ‘doorstep debt collector’ or ‘field agent’ not a bailiff. In practice, this doesn’t happen often and collection agencies will usually stick to contacting you by phone, letter or email.

If a debt collection agent does call at your house, remember:

  • They are not bailiffs (enforcement agents) or a sheriff officers, and pretending to be one of these is a criminal offence
  • You don’t have to open the door or let them in
  • They must show proof of ID
  • They must leave if you ask them to
  • They can’t take anything from your house

If you’re worried about debt collectors visiting you at home, we’d recommend getting in touch with us so we can give you all the advice you need.

What happens to interest and charges?

Usually by the time a debt is passed to a debt collection agency the interest and charges  will have been frozen. In many cases once creditors are aware you’re on a plan with us they may stop additional fees. However we can’t guarantee this.

The important thing to do is to keep up with your TPP payments as by doing this you’re showing creditors you’re serious about dealing with your debts.

Having your debts transferred shouldn’t cause you any sleepless nights. Just let us know the details and we’ll take care of your repayments through your TPP, whoever owns the debt.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2016