That there is a marketplace for selling bundles of old consumer debt for 1p in the pound as they get to 5 and a half years old. That companies then chase the debt hard, try to get judgements which (I am told) mean that the debt is not wiped clean by a 6 year statute of limitations. That if you can get a judgement this increases the value of the debt significantly, and that they then sell it on to other debt companies for a significant profit. And that the costs to individuals, the court service, or the NHS as GP’s pick up the mental health costs of this process are ignored because we fail to join together the dots and say “hang on, this is a stupid way to run a society.”
Have I missed the tone of this thread? I did learn it today.
Sort of, once the judgement is made the value of the debt is fixed, the debt collection agency cannot levy any more charges onto it.
The exact value of the default debt varies, but it’s more than 1%
Since the loosening of legalisation around debt collection and the opening of the CCJ Bulk Centre in Northampton more and more debt collectors are flouting the rules and attempting to gain ‘judgment in default’ I.E. taking people to court without notice (they’re meant to give you 14 days notice of impending action) hoping they won’t reply to the court letter (it’s sent in a simple brown envelope, second class, not recorded or anything and it’s the only warning you’ll get) if they don’t take action within 14 days, that’s it, they’ve lost – they don’t need to prove a thing the consumer now has a CCJ on their file (basically no credit for 6 years) and will be restricted from certain jobs, and will often fail a background check for non-financial jobs and they’ll use bailiffs to enforce the judgement.
The have a habit of sending out thousands on the first week of the school holidays, Easter and Xmas as they know a good percentage of people will be away, they’re also not against waiting until people move and sending to the old address.
They won’t ‘back down’ automatically if you respond, you start a 2-3 month fight where the consumer (who is usually not particularly wealthy) is pitted against a team of solicitors WHO DO NOT PLAY FAIR. They will politely intimidate and scare people into “making a deal” it’s classic good cop / bad cop, only within a single letter it starts of “scary scary scary” and ends “come on, we’ll help you out”.
In around 50% of cases they don’t have any evidence to back up the claim, they’re often materially wrong, and legally unenforceable, I would say a further 30% sit in a grey area, they may have some evidence, but not all of it and the consumer has to decide on the balance of probability how a court case would pan out – whoever loses is looking at £500-£1000 of costs. about 20% are open and shut cases.
The Debt Collectors / Solicitors play bluff very well, they will tell you that you must act NOW! but they know that a deal can be made up to 1 minute before the time of the hearing. Ultimately they want to either win by default, or convince the consumer to pay as much as possible – either in a lump sum, or monthly, or both without going to court – this is also a win for them, by accepting a deal you accept the debt and it becomes an open and shut win should you fail to pay.
However consumers have 2 allies – firstly – Creditors are expected to accept ‘mediation’ this is a telephone meeting where a mediator speaks on behalf of both sides so the consumer cannot be intimidated, secondly Judges typically side with the consumer and the burden of proof sits with the creditor – consumers don’t have to prove anything.
However, if a creditor doesn’t think it’s open and shut, they won’t take it as far as court.
To add insult to injury, the original creditor (who sold it on) wrote the debt off completely and off-set it against profits for tax, they only have to pay tax on the value of the sale price which often comes with a ‘win fee’ so it might only sell for 5% as is, but if they get any money for it, they pay them more – so it’s win-win for them.
I worked in finance for 10 years, it’s a vile and dishonest business when things go wrong, the banks are supposed to work with people when they have a ‘change in circumstances’ I.E. redundancy, sickness etc and they’re no allowed to lend money to people who can’t afford it, but they do neither of these things and use intimidation and misdirection as it’s more profitable and knowingly make peoples lives very hard and unpleasant because it pays.
If you ever have problems like this – get yourself to LegalBeagles.info be wary of other sites, some of the debt collectors have taken to starting ‘consumer help’ sites which just advise people to call the debt collector and give what you can.
