If you’ve exhaustively chased a customer and there’s still no sign of payment, it’s time to consider the possible legal action you can take. Sometimes, there’s simply no choice but to escalate the situation further to ‘encourage’ a customer to pay.
There are no excuses for failing to make a payment. But there are cases when a customer becomes insolvent and simply doesn’t have the money to pay. In that case, you should use the services of a debt collection agency or a bailiff to recover what is rightfully yours.
Debt collectors and bailiffs are not the same things because bailiffs have the legal authority to collect debts. Although they are both permitted to visit a debtor’s property or premises, it is critical that you understand the differences and the roles they play.
In this article, we’ll look at how these two carry out their debt collection duties.
What is a Bailiff?
A Bailiff or an enforcement agent has the legal powers to collect a debt. Some bailiffs are appointed by the private companies, some are self-employed and some work the council to enforce County Court judgments. The bailiffs will collect your judgment debt, council tax arrears, parking fines, and child maintenance arrears serve your papers, your court costs, your warrant cost, and interest if any from the debtor on your behalf. The term has been in use for over 500 years, but the government recently decided to simplify the enforcement process. So, the Tribunal Courts and Enforcement Act 2007 (Commencement No. 9) Order 2013 was passed and changed the term bailiff with a modern and clearer name of Enforcement Agent.
What is a Debt collector?
A debt collector is employed by a creditor or a debt collection agency. They are also referred to as doorstep collectors or a field agent. Once you send a letter or notice to your debtor and receive no response from their side you can have the debt collector visit their property to collect the debt you owe. Having said that, a debt collector cannot take any goods unlike a bailiff from the debtors’ premises. The most they can do is ask you to make a payment arrangement on the debt. The keyword here is asking, not force.
When can a bailiff collect a debt?
Bailiffs can only visit the debtor’s property after meeting the court action through Magistrates’ Court, County Court, or the High Court. This will depend on the type of debt to be recovered. An exemption is HM Revenue & Customs, wherein bailiffs can be utilized without court jurisdiction. Though this can only happen if the debtor kept on ignoring court orders or fails to secure payment arrangements for your debt.
When can a debt collector collect a debt?
Debt collectors work for a debt collection agency or as part of an in-house collecting team. Debt collection organisations also purchase debts from creditors. These debts have fallen behind in their payments. So, to receive what is rightfully yours you may need the services of a debt collector. The debtor has no choice, either he has to make your payment or face the consequences followed by the debt collector’s visit.
Debts that bailiffs can collect
Bailiffs can collect a wide variety of debts including –
- Council tax arrears
- Parking fines dispensed by the local authority
- Child maintenance arrears
- Criminal fines
- Money owed to HM Revenue & Customs, such as income tax, VAT, National Insurance or tax credit overpayments
What debt can debt collectors collect?
Debt collectors typically collect the following forms of business debt:
- Credit card debt
- Utility arrears
They can collect a wide range of other debts though, from debts to your local council to unpaid loans to an individual.
What can bailiffs do?
Bailiffs can visit a debtors’ property after they have sent a letter to inform, they’ll becoming.
This letter is known as a notice of enforcement, and it must be received seven days before the scheduled visit. Allowing for weekends means the debtor has a minimum of 9-10 days to either pay the debt in full or come to an arrangement to repay the debt in instalments. If they don’t do this, the bailiff will visit.
A bailiff can only enter a residential property through a door and in a peaceful manner with the debtor’s permission. They must present proof of their identity and explain why they are present. Bailiffs are not allowed to force their way into your house or break down the doors. They can’t move their way in or enter the house if just a child under the age of 16 is there.
Once they’re in the property, they can begin making a list of goods that they could later remove to sell at auction. For most types of debts, bailiffs can’t force their way into a residential property.
If a bailiff is collecting a criminal fine, then they can force to enter a residential property. This will only be done as a last resort and this power is very rarely used. Bailiffs who collect debts at businesses have more ability to force access, so if your debtor is self-employed or run a workshop, they might be able to break in.
When the bailiff enters a property, they’ll usually make a list of goods and valuables that could be sold to pay off the debts. Before taking the goods away they will give the debtor a chance to make a payment towards the debt in what’s called a ‘controlled goods agreement’.
If the debtor still doesn’t make the payment the bailiffs will return to take the goods they’ve listed. These will then be sold to raise money to pay towards the debt.
What can debt collectors do?
Debt collectors do not possess any special powers that might aid them in collecting a debt. They may contact your debtor by phone calls and letters, they may also pay a visit in some situations. If the debt collector visits a debtor’s property, debtors may not open the door to let them in. Often the debt collectors are asked to show their ID. They can ask the debtors to make the payments, but the debtors can refuse or settle directly with the creditors. If at all the debtor makes the payment in cash the debt collector has to give a receipt for the same.
The judgment will be based on the facts of the case and the debtor’s financial strength. A reluctant payer may only need a letter or a phone call from a DCA to get the payment made or an agreement reached, however for a “won’t pay” or a debtor with multiple creditors on the case and time is of the essence, prompt court action and enforcement, if necessary, maybe the appropriate course of action.
Contact our team today for a FREE no-obligation call, and we will give you the benefit of our considerable experience on what you can do.
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