Potential costs for ignore debt collectors

gck303

I owe a gym a 80 GBP final membership payment.

There is an ongoing dispute of whether this is owed. I recon a decision could go 50:50. The details of this are not important.

If a debt collector takes me to court and wins, how much will I have to pay?

mynameistallulah

The costs they have incurred in trying to enforce the debt prior to applying to the court, then court costs of around £90 (if it goes to hearing), so probably around three times what you currently owe.

I would say "the details" are very important!

KingElvis

Don't do it on principal.....It will be far far cheaper to just pay the £80 and move on.

gck303

>> I would say "the details" are very important!
My question is not about the details.

>>.It will be far far cheaper to just pay the £80 and move on.
No, it will be somewhere between 1/3 of the cost, and much less depending on an outcome. If they ever take someone to court.

>> three times what you currently owe
Is this a guess, or based on fact.

Has anyone ever not paid a debt collector off? Or has everyone 'chickened' out and paid.

I think I might call their bluff on this...

RobertoMoir

gck303 wrote: »

>> I would say "the details" are very important!
My question is not about the details.

The answer as to whether or not this is a good idea lies very much in the details.

Has anyone ever not paid a debt collector off? Or has everyone 'chickened' out and paid.

If you invested just some of your time looking at the forum you'd see examples of people trying both those things. With varying degrees of success depending on the details... oh that word again.

I think I might call their bluff on this...

Why ask if you've already decided?

HappyMJ

gck303 wrote: »

>> I would say "the details" are very important!
My question is not about the details.

>>.It will be far far cheaper to just pay the £80 and move on.
No, it will be somewhere between 1/3 of the cost, and much less depending on an outcome. If they ever take someone to court.

>> three times what you currently owe
Is this a guess, or based on fact.

Has anyone ever not paid a debt collector off? Or has everyone 'chickened' out and paid.

I think I might call their bluff on this...

I have chosen not to pay a debt collector off. Once it ended up with me getting a 7 day suspended sentence....OK lesson learnt make sure you pay your court fines as the number 4 priority (just below rent, electric and food). The other one was the water company...they just went and got a CCJ...nasty...paid that off quick and racked up another £900 in water bills since. Another one was a debt which they could not find the CCA for and is now gone unpaid for 6 years and fallen off my credit report and another debt collector not paid off was the one chasing council tax. They have given up on that one and nothing has happened since.

Good luck....

gck303

HappyMJ wrote: »

I have chosen not to pay a debt collector off. Once it ended up with me getting a 7 day suspended sentence....OK lesson learnt make sure you pay your court fines as the number 4 priority (just below rent, electric and food). The other one was the water company...they just went and got a CCJ...nasty...paid that off quick and racked up another £900 in water bills since. Another one was a debt which they could not find the CCA for and is now gone unpaid for 6 years and fallen off my credit report and another debt collector not paid off was the one chasing council tax. They have given up on that one and nothing has happened since.

Good luck....

Thank you, that is a helpful response.

However, my debt is not one that can affect your credit rating. Ie not water, council tax etc.

Yeah, not paying court fines and court mandated payments I can imagine will get you in trouble. That is NOT what I am proposing to do!

vax2002

The dispute will be if you have taken the services charged for or not, they simplify things down in court.

Emmzi

it will affect your credit rating if they get a CCJ. It'll totally hammer it.

ciderboy2009

gck303 wrote: »

>>
>> three times what you currently owe
Is this a guess, or based on fact.

Assuming the claim is for £80 then the court fees (from memory) will be:

Issue fee: £25 or £30 (depending on how they issue the claim)
Hearing Fee: £25

However, if they go as far as issuing a claim then they're likely to add other costs onto it.

If you lose the case then these fees will automatically be added to the judgment.

gck303

Wow.

I just found this article which talks through the options to a business for collecting outstanding debts.

http://www.lawdonut.co.uk/law/commercial-disputes/debt-recovery/debt-recovery-22-faqs#21

>>It may be best simply to write off small debts (say, less than £100), although you should consider whether this would create a precedent which encourages other small debtors not to pay. For larger debts, you need to investigate why the customer has not paid. If there is a dispute over the goods you supplied, it will be difficult to recover the debt without resolving it. If the customer is in cashflow difficulties, you may want to try to negotiate part payment and reschedule the debt.<<

Reading it makes you realise that if a debtor chose not to pay how very, very, very difficult if could be to force them to pay up and settle the debt.

I guess this is why debt collection agencies use such strong tactics: if someone decides to not pay, then even with a court judgement it is going to be really difficult to get a payment made.

Furthermore the business has to pay the court fee upfront, which will be a very significant investment that they may never get returned.

My conclusion:
- always contest the debt/contract and create a dispute. This will stop a statutory demand being issued
- hang tight and ignore the demands
- once a court date has been scheduled, then you know the creditor is serious. They have made a financial investment to get it to court
- Settle the debt at the very last minute before a court hearing

Hey, hold on...

This is EXACTLY the process that is used by banks when they are disputing excess overdraft fees!