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- I have received a letter today from a debt recovery agency who has purchased a debt from a credit card company. This account is in dispute at this time. They say in their letter that they have been 'monitoring my personal circumstances'. What does this mean and under what authority are they allowed to do this?
- The company that wrote to you is a debt purchaser (or debt buyer) rather than a debt recovery agency and they have assumed the rights of the original creditor. You should have been informed that the debt had been bought either by the original credit card issuer or the debt buyer (what is called a good bye or hello letter, respectively). Their rights are determined by the original credit agreement and whether the credit card issuer was a member of a trade association like the Finance & Leasing Association, who has a clear code of practice for its members. The debt buyer will probably be a member of the Debt Buyers & Sellers Group (DBSG) and will therefore extend its conduct to that of the original code of practice. ‘Monitoring your personal circumstances’ normally means assessing your credit history and previous payment performance, which they are perfectly entitled to do provided it doesn’t include a new credit search that would appear on your credit file. Debt recovery enquiries and profiling of newly acquired accounts are recorded differently on your credit file. Where you have a legitimate dispute then you should persevere with the original creditor and also bring it to the attention of the new debt owner. Both are duty bound to deal with reasonable disputes. It may be the case that the debt is returned to the original creditor is there are firm grounds for your dispute. It is not uncommon for the debt buyer to be completely ignorant of the account history prior to sale of the debt.
Last Updated: 02/07/2010 17:52:20
- I am in big arrears with my council tax. I want to fix it, but the council are now asking for my previous addresses, which I cannot give them for fear of involving people who in the past have given me somewhere to live. How do I resolve this?
- I assume they want your previous address to establish if you also owe them Council Tax from those addresses. I also assume that you are concerned that the people you have been staying with may have been claiming the single occupant or other discount.
Whether or not your staying there disqualifies them from claiming the discount will depend on the rules regarding residence - in brief a single occupant discount is dependent on a person's residency - the two are interwined. See section 6 onwards of the Local Government Finance Act 1992. A 25% Single Person discount can only be awarded where the property is the 'sole or main residence' of one person or there are more one occupier and the other occupiers are all disregarded for Council Tax purposes. Whether a person is resident in a property is not definitively defined in legislation has been clarified in case law.
From the context of your question I assume that these previous addresses were, at the time of your stay, however brief, your main residence and therefore your friends would be likely to be disqualified. One thing is clear - lying to the Council in this matter is a criminal offence. My advice is that you speak to your CAB or other local advice centre as a matter of urgency. I also assume that if you have big Council Tax arrears you have other financial problems. The CAB or other local advice centre will also be able to help you develop a payment plan to help repay your Council Tax arrears and other financial problems.
- Having read the story on bailiff activity, I thought the credit industry had taken steps forward with the debt advice sector in laying down guidance to deal with people with mental health disorders who are in debt. Do those using bailiff services not have a duty of care to treat vulnerable debtors fairly?
- It is important that the debt advice, creditor and credit services sector collaborate together to treat vulnerable people fairly where they have unmanageable debts and a mental health condition. The MALG 'Good Practice Mental Health Awareness Guidelines' and the Debt & Mental Health Evidence Form have been produced to facilitate work with those with mental health conditions and are downloadable here. It is advised that these documents are used where there are cases of individuals whose mental health condition is such that they are unable to manage their financial affairs.
- Can a bailiff seize goods from premises if the debtor has not lived at the address for more than two years and the goods in question are not the debtor's property?
- Without knowing the full details behind this question, the initial response would be no - the bailiff cannot seize the goods belonging to someone other than the debtor. In most types of debt, a bailiff can only seize (levy on) the debtor’s goods, though they can seize goods that are jointly owned. If the goods belong to someone else and they have been seized then it is for the real owner to apply to court to have them released. You can swear a Statutory Declaration regarding ownership of goods before a solicitor and present it to the bailiff to resolve the dispute.
- Do bailiffs have the right to force entry into private houses to enforce debt recovery?
- Generally bailiffs do not have the right to force their way into not a domestic property (your home) to seize goods, though there are specific exceptions to this. A bailiff must be legally authorised to collect the debt on behalf of a creditor, local authority, landlord or HMRC. The authority is normally known as a 'warrant', or 'warrant of execution' if the bailiff is recovering money owed under a county court judgment (CCJ). Bailiffs should always show identification and should only call between 6am and 9pm except Sundays and public holidays, though the court may stipulate otherwise.
Forced entry can occur on some occasions:
- Bailiffs from the HMRC are legally allowed to break into your home if they have a court warrant
- Bailiffs collecting unpaid court fees are also allowed to force their way in
- Bailiffs can force entry when enforcing Magistrates’ Distress Warrants for criminal penalties and civil penalties
- When enforcing High Court and County Court (i.e. a CCJ) at non-domestic properties (i.e. a building with no living accommodation, which include sheds, lock-ups and detached garages, separate offices)
- To re-enter properties that have previously peacefully entered, but were then expelled before completing seizure of goods (the Police may well get involved in these cases to maintain the peace)
- To remove goods previously seized. Best practice would suggest that the Bailiff shows a Walking Possession Agreement in these circumstances
Good practice regarding forced entry states:
- Entry has been requested and refused
- The Police have been notified. If the Police advise against this then this must be respected
- A loud verbal warning of forced entry has been given
If in doubt seek professional debt advice, especially with priority creditors like landlords and local authorities.
- I have got into a situation where I cannot afford to pay a debt. I have been told that the next step could potentially be legal proceedings. Now I'm wondering whether they can increase the debt in any way before the actual court case. I have done some research and some people online have been charged extra for extra letters. Also, if I were to lose the case would I be liable to pay for their legal fees?
- Costs and charges that are applicable are largely governed by the original credit agreement. These will be in small print if it is regulated by the Consumer Credit Act. If it is a personal loan or credit card agreement then there will usually be provision for the lender to recover any costs associated with legally enforcing a debt. You are able to dispute debts, but you need to do this promptly. Under the new court rules on ‘pre-action conduct’, the court is keen to see you come to an arrangement with your creditors without court action. If court action is taken, you will not usually have to go to a court hearing. Most of the procedure is done through the post. From April 2009, your creditor should send you a letter before they start court action telling you how to pay and how to contact them to discuss what repayment optionsyou might have. The rules allow you to ask your creditor for time to get professional debt advice if you need to before they take court action. If the creditor goes on to take court action, you will receive a ‘claim form’ from the court. The claim form will include details of the debt, known as the ‘particulars of claim’. If you don’t agree with the amount of the debt the creditor says you owe, fill in the ‘defence form’. In this case, send the form back to the court.
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