How to make debt collectors go away?

You may think, " Should I ignore the debt collector's letters or just throw them away?" We do not recommend either option, as it can worsen your situation.

Keeping hold of any written communication you send and receive from debt collectors is essential. These letters are evidence of your communication with them and will hold vital information. You can read more about this here.

How you communicate with debt collectors is critical, and we must highlight this point as it's really important…

Do not use phone calls to communicate with debt collectors. If possible, do not even entertain the calls. If you can find an email address, contact them this way. If not, then use good old-fashioned Royal Mail. You should be able to find the postal addresses of most if not all, debt collectors in any letters or statements they have sent you. If you still can't find the address, you will need to search for it on the debt collector’s website.

You may receive letters asking you to call the debt collector or system-generated letters. If this happens, look for the sender's address on the letter and resend your original letter to it. Repeat this process whenever you receive correspondence that doesn’t answer your letter. Don’t panic if you haven’t received a response to your letter; it can take time for your email or letter to reach the correct department.

In step 4, we’ll explain what you must do once you receive a response.

Alongside ensuring you keep all written communication, making token payments is the most essential part of the process. As soon as you communicate with the debt collector, you must start making token payments immediately.

We call them ‘token payments’ because it should only be based on what you can afford. Make the monthly token payments even if the debt collector hasn’t responded to your letters or emails. Do not miss any monthly payments.

Here’s why, and it concerns how a debt collector must treat customers:

Section 7.3.5 (3) of the FCA Handbook states the following as an example of treating a customer with forbearance:

Debt collectors must follow the rules, and this guidance provides them with a way to ensure the rules are being followed when a person alerts them that they are experiencing financial difficulty and tries to put a plan in place to address the situation.

Making token payments means the debt collector should not pursue other legal avenues, such as court, which could result in a County Court Judgment.

This is why the token payments are so important.

When you do receive a response to your letter, the debt collector might ask you to call to discuss your situation. Do not call. Simply write in your letters that you "wish to keep all communication in writing". Doing this will give you a clear record of all discussions and agreements.

You may receive a letter with an income and expenditure form attached at some stage. Whether you complete this form or not is entirely up to you. Nothing in Section 7.3 of the FCA Handbook states it is mandatory. The debt collector’s form determines how much you can afford to pay them, so be mindful of this.

If you choose to complete the income and expenditure form, please read the following section carefully.

As we mentioned earlier, the income and expenditure form is the debt collector’s way of determining how much you can afford to pay them.

However, before completing this form, we recommend completing our budget planner so you can retain control and calculate what you can afford to pay. You can print it off and send it to them instead of the debt collector's version.

If you do decide to complete the income and expenditure form, there are some essential pointers to be aware of:

• Only fill out the parts you are comfortable completing. If you are unsure about the requested information, do not feel pressured to complete that part of the form.
  
• The debt collector will look for the figure remaining after subtracting your expenditures from your income. This is the figure they will expect you to pay.
  
• Debt collectors cannot suggest amounts for you to make as token payments. The income and expenditure form shows them how much you can afford to pay each month.
  
• You are not required to send copies of wage slips, copies of bank statements, medical records or similar private sensitive information.
  
• Be aware that luxury expenditures, such as expensive gym memberships, alcohol, cigarettes, etc., may be questioned.

Once you have completed the income and expenditures, keep a copy and send the original to the debt collector.

You should eventually receive a letter or email confirming that your plan is in place. After some time, you may be contacted again for a review.

The debt collector will contact you to review your plan at least once within 12 months; however, this may vary.

Some may review your plan after a month, some after 3 months, and some after 6 months. When you receive a letter requesting a review, do not feel pressured to increase your payment if you cannot afford to. If your circumstances haven’t improved, all you need to do is write back to the debt collector telling them this.

If you can afford to and want to increase your payments, you can do so anytime. However, only pay what you can afford, and never sacrifice your mental well-being to increase your debt payments.

The debt collector may contact you with discounts or offers to settle your debt, such as a reduced one-off payment. You can read more about this here.

The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.