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selling the debt without telling the debtor

It seems that creditors have no obligation to tell the debtor that they have sold the debt - is there any particular reason why a creditor would choose to stay silent?

More importantly, if the debtor is making token payments, and does not know that the debt has been sold, then where will the token payments go?

Finally, the creditor has to give 30 days notice of filing a default, and in my case, that will be after several months of reduced/token payments - presumably the idea is that I will have a final chance to clear the debt, if I possibly can.

It seems to me that as soon as I receive the 30 day notice, the first thing I should do is cancel my token payments - or is it possible that there would be some advantage to me in continuing them?

Comments

  • Tixy
    Tixy Posts: 31,455 Forumite
    Creditors should inform their debtor if they sell the debt on, though in practice that doesn't always happen.
    They often/usually don't inform the debtor if they have just passed the debt to a debt collector to collect but have retained ownership of it themselves.

    Regarding
    It seems to me that as soon as I receive the 30 day notice, the first thing I should do is cancel my token payments - or is it possible that there would be some advantage to me in continuing them?

    Not totally certain what you mean - do you mean stop paying permanently? if so the reason to continue would be to hopefully stop them possibly starting court proceedings against you.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • My worry would be that, if I continue to make my token payments after the debt has been sold (without my knowledge), then the payments would not be passed on to the purchaser of the debt
  • Tixy
    Tixy Posts: 31,455 Forumite
    A creditor is required to tell you when a debt is sold. Its often a long time after a default has been added that a creditor will actually sell the debt on to anyone else. If for some reason they didn't inform you they'd sold the debt and you made further payments then they'd have to send them on to the new owner of the debt. As long as you can prove the payments were made there shouldn't be an issue.

    If the debt is not sold/just passed over for collection then it wouldn't matter that you were still paying the creditor not the debt collector - you'd just need to ensure that the debt collector was aware of those payments and made sure they reduced them from the balance you were chasing.

    When a debt collector sells on a debt to a secondary debt collector debtors often aren't informed by the first debt collector (though they should be), but generally when its a high street bank selling to a first debt collector the debtor is informed.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • OK, thanks, that's reassuring. But I have seen more than one reference on here to debts being sold on without informing the debtor. My own credit company have told me that the debt might be sold on at some point, but they haven't stated that I will be notified if that event takes place
  • Tixy
    Tixy Posts: 31,455 Forumite
    Its against debt collection guidelines (section 3.7g)
    See this link UPDATED OFT Guidance on Debt Collection - READ IF YOU ARE BEING HASSLED UNFAIRLY
    extract
    g. failing to inform the debtor 30 when responsibility for recovery of a debt and/or the legal right to recover a debt has been transferred or assigned to a (named) third party 31

    30 As and when the debtor has been located/identified.
    31 See section 82A of the Act for responsibilities following assignment of rights and chapter16 of the guidance produced by the Department for Business, Innovation and Skills (BIS) 'Consumer Credit Regulations: Guidance on the regulations implementing the CC Directive' August 2010 (see Annexe D for link to BIS guidance).

    It does happen occasionally - and merits a complaint if it does. But your money won't disappear and not been put against your debt - though it could take a letter or so to get it corrected.

    I really wouldn't just stop making token payments at the point you are given a default notice - that could trigger them to take court action against you.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • Thanks again for you help. I am actually quite hopeful that I will be able to come to some amicable arrangement during the 30 days notice period - I tried to negotiate with them when my circumstances unexpectedly changed, but they more or less said that they don't start negotiations until a default situation has been reached, and that in the meantime, I should simply make token payments. I'm actually paying around £50 a month, but I think they would have been just as happy with £1!
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