Have you ever wondered what happens when a debt is sold? Many people assume they owe money directly to their original creditor forever, but this isn’t always the case. Debt purchasing is a common practice in the UK, and it can significantly impact how you repay what you owe. If you’re facing collection agencies or phone calls from a company you’ve never heard of, it’s essential to understand your rights and options.

What Is Debt Purchasing?

A debt purchaser is a company that buys unpaid debts from creditors, such as banks, utility providers, or loan companies. These debts are often bought in bulk for a reduced price. For example, if a customer owes a lender £100, a debt purchasing company may buy that debt for £70. The new owner then seeks to recover the full amount from the debtor, making a profit in the process.

While this practice is legal and regulated, it can be confusing and intimidating for those affected. If you have been informed that your debt has been sold, you still have rights, and knowing them can help you manage your financial situation more effectively.

Why Do Creditors Sell Debt?

Lenders prioritise issuing loans and managing accounts, but when debts remain unpaid for an extended period, chasing repayments can be costly and time-consuming. Selling of debts allows them to recover some money without further investment in collection efforts.

When a debt is sold, the new legal owner becomes responsible for recovering payments. This does not mean you owe more money, nor does it mean additional costs can be added beyond those allowed by your original credit agreement.

What Happens If Your Debt Is Sold?

If your debt has been sold, you should receive two key notifications:

• A letter from your original creditor confirming that they no longer own the debt and that it has been transferred to a new company.
• A letter from the debt purchaser providing details of how to make payments and contact them with any questions.

Even though the company requesting payment has changed, your legal obligations remain the same. If you are unsure whether a debt has been transferred correctly, contact your original company to verify the sale.

Can You Dispute a Debt?

You have the right to challenge a debt in certain circumstances, including:

• If the debt is statute-barred, meaning it is too old to be legally enforced.
• If you do not recognise the debt or never took out the loan.
• If the debt agreement does not comply with the Consumer Credit Act 1974, which regulates credit agreements in the UK.

If a debt has been sold multiple times, it may be difficult for the new owner to provide the required paperwork proving the debt is valid. Seeking specialist debt advice service before making any payments can be a wise step if you have concerns.

Debt Collectors vs Bailiffs: Understanding the Difference

It is common to feel anxious when contacted by a debt collection agency, but it is important to understand what they can and cannot do:

Debt Collectors:

• They cannot enter your home without permission.
• They cannot seize your belongings.
• They cannot force you to make a payment you cannot afford.

Bailiffs (Enforcement Agents):

Enforcement agents are legally appointed by the courts and have more authority in certain cases, such as collecting unpaid council tax, fines, or county court judgments (CCJs). Unlike debt collectors, they have the power to enter your home under specific conditions.

If you are unsure whether you are dealing with a debt collector or a bailiff, always ask for written confirmation before engaging with them.

How Should You Respond to a Debt Collection Agency?

If a debt purchaser contacts you, follow these steps to protect yourself:

• Verify the legitimacy of the debt: Request written proof before agreeing to pay.
• Do not be pressured into paying immediately: You have the right to seek independent debt advice first.
• Set up an affordable repayment plan: If you acknowledge the debt, negotiate a realistic payment arrangement.
• Understand your rights: Debt collectors must follow strict legal requirements and cannot harass or mislead you about legal action.

Ignoring letters and calls will not make the debt disappear, but knowing how to respond can prevent further stress.

What Happens If You Do Not Pay a Debt Purchaser?

If you do not make payments on a purchased debt, the new owner can take several actions:

• They may continue to contact you via letters or phone calls.
• They may attempt to negotiate repayment plans with you.
• They could take legal action, which may lead to a CCJ (County Court Judgment) being issued against you.

A CCJ can negatively affect your credit score and ability to obtain future credit. However, before any legal proceedings take place, you will be given the opportunity to discuss payment plans.

Can Debt Purchasers Take You to Court?

Yes, debt purchasers can take you to court if you do not repay the debt. If they obtain a County Court Judgment (CCJ) against you and you still do not pay, they may apply for enforcement measures such as wage deductions or bailiff visits. However, before this happens, you will have the chance to defend yourself if you believe the debt is not valid.

Where Can You Get Help?

If you are struggling with debt, there are several free advice services that can support you:

StepChange Debt Charity

• Phone: 0800 138 1111 (Freephone)
• Website: www.stepchange.org

Citizens Advice

• Website: www.citizensadvice.org.uk
• Phone: Visit the website for local contact details.

National Debtline

• Phone: 0808 808 4000
• Website: www.nationaldebtline.org

These organisations provide confidential advice, including:

• How to negotiate with creditors and debt purchasers.
• Whether your debt is enforceable under UK law.
• What repayment plans may be available.

Final Thoughts

If your debt has been sold, it does not change the fact that you still owe money, but it also does not give the new owner additional powers beyond what the original creditor had. By understanding how debt purchasing works, knowing your rights, and seeking help if needed, you can take control of your financial situation.

At We Buy Any Debts, we help people navigate the complexities of the debt collection process and offer solutions tailored to their circumstances. If you have questions about your debt, contact us for guidance on the best course of action.