In these days of email and social media it can seem we only receive two kinds of letters, greetings on “red letter days”, which we are usually happy to receive, and everything else, we’d quite happily live without, junk mail, some bills – and debt threat letters. Here’s are five tips on how to deal with those.
Don’t ignore them
When you receive a debt threat letter, then you almost certainly need to take some kind of action.
Don’t be frightened of them either
Debt-threat letters are, pretty much by definition, written to be frightening, or at least intimidating, the whole point of them is to pressurise the person into paying up, regardless of whether or not you actually owe the money.
Do check if you actually owe the debt
One of the key points to remember about debt threat letters is that many of them are sent out purely because the recipient’s name and possibly date of birth are a match to someone who may genuinely owe a company some money. Having said that, another key point to remember, is that mistakes happen and individuals can be registered as owing money when they actually don’t. For example, if a computer error causes a payment to be separated from the accompanying documentation, then the payer may not see the payment credited to their account correctly and hence be marked as in debt. Changes to accounts and closures of accounts are also occasions where confusion can arise and people be marked as owing money when in fact they do not. In other words, be aware that a significant percentage of debt threat letters are what the polite would call “sent out in error” and the less polite would call “chancing their luck”.
If you don’t recognise the debt, your first port of call should probably be to check your credit record and see if there is a debt marked on it. If there isn’t you can take this is a sign that you were simply the victim of a mass mailing. If there is, then you need to work out whether or not you actually owe the debt or whether your account has been marked in error. This does happen. Credit reference agencies simply report what they are told and if they are given wrong information, the chances are they will simply put that information into your file without undertaking any further checking. In other words, if a debt still isn’t ringing any bells then you need to keep digging.
Ask the company to provide proof of the debt
Most debt threat letters ultimately boil down to a threat to take legal action against you if you fail to pay up. In court, it’s the prosecution or the plaintiff who has to prove their case, which means that any company has to provide proof that you owe them money in order to get a court judgement against you. Ask them to provide this proof to you. If they are unable to provide any proof that you owe them money then they have zero chance of winning a case in court. If they do provide proof then, again, you need to check it carefully and ensure that the proof does, indeed, apply to you rather than someone with the same name. If you believe that the proof is incorrect then your first point of action should be to make the company aware and explain why and hopefully this will end the matter, but if they persist, as can happen, then you may wish to seek legal advice for example from the Citizens Advice Bureau.
If you do think you owe the debt, look at your options
This may be another time to get advice, for example from CAB. Even if you do owe the debt, if you can’t afford to pay it, you may be able to negotiate to pay a lower amount and/or to pay in instalments. Remember, your creditors can’t get what you don’t have.