News: Don’t let debt agencies threaten your business with legal jargon
Rotherham insolvency expert Paul Moorhead is warning that people facing a financial crisis should not feel pressured by the threat of legal action.
Paul, the founder of insolvency practice Moorhead Savage and the 2013 Corporate Insolvency Practitioner of the Year, says he has seen an increase in the number of debts being chased by debt collection agencies in recent months.
But too often, he says, these agencies will use empty legal threats to add extra pressure to an already tense situation.
"They will use tactics that make it look like they have legal powers in the same way that bailiffs have legal powers but generally speaking even court appointed bailiffs only have the right to enter property and remove goods in very specific circumstances," Paul said.
"It's a very complex area and a lot of debt collection agencies will capitalize on the confusion that exists in this area by suggesting or inferring that they have certain powers that they don't have all."
One common tactic is a letter that might appear to be a legal document implying that proceedings for a County Court Judgment have already been started against a debtor, or that a court has already ordered that a sum of money should be paid.
"Dressed up to look like an official notice, it can easily seem that a creditor has already obtained a court order, which they may not have done," Paul explained.
"Using the word "Notice" is particularly common as it gives the impression of being a court document, although a "notice" is merely a notification that could be issued by anyone.
"That's why it is important to know your full rights and to have somebody who completely understands what a debt agency’s correspondence is actually saying, rather than what it appears to say.
"And even if somebody really does have a legal judgment against you, there are still things you can have done to find a sensible and affordable repayment plan.
"Creditors know that the person who shouts loudest usually gets paid, but if there is a bigger debt problem merely paying off the most aggressive creditor isn't going to solve the underlying problem."
Moorhead Savage website
Images: Moorhead Savage
Paul, the founder of insolvency practice Moorhead Savage and the 2013 Corporate Insolvency Practitioner of the Year, says he has seen an increase in the number of debts being chased by debt collection agencies in recent months.
But too often, he says, these agencies will use empty legal threats to add extra pressure to an already tense situation.
"They will use tactics that make it look like they have legal powers in the same way that bailiffs have legal powers but generally speaking even court appointed bailiffs only have the right to enter property and remove goods in very specific circumstances," Paul said.
"It's a very complex area and a lot of debt collection agencies will capitalize on the confusion that exists in this area by suggesting or inferring that they have certain powers that they don't have all."
One common tactic is a letter that might appear to be a legal document implying that proceedings for a County Court Judgment have already been started against a debtor, or that a court has already ordered that a sum of money should be paid.
"Dressed up to look like an official notice, it can easily seem that a creditor has already obtained a court order, which they may not have done," Paul explained.
"Using the word "Notice" is particularly common as it gives the impression of being a court document, although a "notice" is merely a notification that could be issued by anyone.
"That's why it is important to know your full rights and to have somebody who completely understands what a debt agency’s correspondence is actually saying, rather than what it appears to say.
"And even if somebody really does have a legal judgment against you, there are still things you can have done to find a sensible and affordable repayment plan.
"Creditors know that the person who shouts loudest usually gets paid, but if there is a bigger debt problem merely paying off the most aggressive creditor isn't going to solve the underlying problem."
Moorhead Savage website
Images: Moorhead Savage
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