Debts which have been sold

sophielou81

Hi,

I have a lot of debt relating to a nasty divorce and my ex declaring himself bankrupt and leaving me to deal with it all. I'm struggling to meet the payments, but have managed to arrange a payment plan with around half of the creditors.

What I would like help with, is when a company has purchased my debt from my original creditors. What exactly does that mean, and what are my rights with this?

Thanks for your help

xx

Tixy

Creditors are allowed to sell (assign) debts to a third party. If they do that legally you then owe the third party and they take over the right to collect the debt (including the ability to consider court action).

In some instances the third party who purchased the debt also take on the reporting of the debt to the credit reference agencies, in other cases this remains with the original creditor. Either way you have a right for your credit file to accurately reflect the true position of the account (e.g. the third party must not change the default date and they must make sure your credit file is updated regularly to reflect the current balance on the account).

When a debt is owned by a third party you still have a right to ask for documentation in relation to the debt from the third party (e.g. you could do a CCA request under the consumer credit act, or a subject access request under the data protection act).

Often the third party can continue to charge interest / charges etc in line with the original credit agreement.

You do not have a right to know how much the third party paid your original creditor for the debt.

sophielou81

thank you Tixy. So the other question I have is... what happens if you've continued to pay the original creditor as you didn't realise that the debt was sold? This has happened with one of mine, as the debt must have been handed over around the same time as I moved... I have carried on making payments to the original creditor as I never received notification that it had been sold, and recently have received letters from the new company showing the amount I owed before payments were made.

Tixy

The original creditor should pass on the payments you have made to the new owner.

You may need to contact both sides to chase them up on this and ensure these payments are reflected on the outstanding balance you are now being chased for.

sophielou81

Ok thank you, I'll try contacting the original creditor and ask them to pass it on.