Do debt collection agencies go to court?

robatwork

I'm wondering what the criteria are for debt agencies who buy "bad loan" books to bother getting a judgement. When I moved into my house 6 years ago I got loads of letters for a former resident. Literally hundreds. Despite sending back and in some cases calling, they still get sent today. 

The council tax bill resulted in a CCJ sent, followed by a bailiff. None of the many personal loans ever ends up with any court paperwork sent here. This one today was Cabot financial- a last desperate throw of the dice. Are there consequences to not paying a personal loan if they just give up the ghost like this?

sourcrates

About 12% of defaulted consumer credit debt goes to court, so only a very tiny fraction ever sees a court room.

This is for mainly commercial reasons, the cost/time involved, I don`t personally know what criteria is applied to decide who to take to court or why, but usually debts just get re-sold or re-assigned to different debt purchasers to keep on chasing.

Council tax is different, as its a statutory tax, councils use bailiffs to collect non paid accounts under a liability order.

Brie

It won't affect you or your credit history as those are done by name not address.  So unless you are unfortunate to have the same name as the previous resident things will be fine.  Just pop everything back into a post box with Not At this Address or Moved on them.  Or if that gets too tiresome just bin them.  

Should a bailiff show up don't let them in even if there's torrential rain.  Just state the person they are looking for moved years back, no longer live here and none of their possessions are here either.  Should they get pushy pull out your phone and state recording their behaviour - they know the rules and will back off very quickly.  Some people go the extra mile and show their driver's licence to prove they are not the one the bailiff is after but this shouldn't be needed.  If they persist, call the police.  

And in answer to your question....a few bills might end up in court but the majority eventually just go away.  Most would cost too much to bother with the extra money court would entail.  Council tax is different in that the council are obliged to do their best to collect the ££.  

Nasqueron

A debt buyer can go to court yes - the CCJ is an indication that someone did. Remember they buy debt for pennies in the pound. If Cabot bought the debt of £2961.85 for say £200 (maybe they bought it when it was less and the interest has made the balance higher) then it's a profit for them if they get the payment after sending a couple of letters.

After 6 years if there is no acknowledgement the debt is statute barred so cannot be enforced hence getting a CCJ before 6 years allows them to keep chasing and marks the credit file for longer. That debt was maybe taken out in 2018/19 so a final Hail Mary letter might get them a bit of cash.

As to your last question - morally yes, but technically no. If you don't care about future credit and have the means to avoid being traced then borrowing and not paying for 6 years you could get away with it depending on the amount and how much the firms are willing to spend to find you. There is highly likely to be an internal blacklist though that would decline future credit applications from you for that group unless you also went to the trouble of changing your name and avoided association with the old one.

robatwork

Brie said:

It won't affect you or your credit history as those are done by name not address.  So unless you are unfortunate to have the same name as the previous resident things will be fine.  Just pop everything back into a post box with Not At this Address or Moved on them.  Or if that gets too tiresome just bin them.  

Should a bailiff show up don't let them in even if there's torrential rain.  Just state the person they are looking for moved years back, no longer live here and none of their possessions are here either.  Should they get pushy pull out your phone and state recording their behaviour - they know the rules and will back off very quickly.  Some people go the extra mile and show their driver's licence to prove they are not the one the bailiff is after but this shouldn't be needed.  If they persist, call the police.  

And in answer to your question....a few bills might end up in court but the majority eventually just go away.  Most would cost too much to bother with the extra money court would entail.  Council tax is different in that the council are obliged to do their best to collect the ££.  

Indeed I've no problem with credit file, or even the bailiff who came. I found him polite and understanding.

It's amazing how many letters this company have sent, and rather than go to court they'll just let someone off 90% of their debt if you wait long enough. Not a great lesson on responsibility.

sourcrates

robatwork said:

Indeed I've no problem with credit file, or even the bailiff who came. I found him polite and understanding.

It's amazing how many letters this company have sent, and rather than go to court they'll just let someone off 90% of their debt if you wait long enough. Not a great lesson on responsibility.

Its the scale of the problem that`s the issue, if lenders took every debtor who defaults to court, the entire legal system would collapse overnight, its simply impossible to take court action over every defaulted debt, the grand total of the personal debt owed by the British population as of June last year was £1,84 trillion.


The debt collection process is by no means perfect, however it works on a numbers basis, the more debtors they can get to pay up by using cheap methods such as calls and letters, the better for them.

That does mean a lot of debtors slip through the cracks, but that`s the system we have.