Solicitor letters and debt collection
If you are in arrears likely, you’ll eventually start getting solicitor letters about your debts, but it does not mean you’re definitely going to court.
Why am I getting solicitor letters?
A solicitor (or seemingly a solicitor) may contact you about your debts for one of several reasons.
In-house collection departments
The solicitor could be part of the creditor’s collection department using a different trading name and branding but is the same company. It should be made clear, often is it not.
Debt collection agencies
Some solicitors and legal practices also work as debt collection agencies. Your original creditor may by using their services or may have sold the debt to them. If asked to pay the solicitors directly, then the debt is likely to have been sold.
Why would anyone sell a debt?
Debts are sold at a certain percentage of the value, say 40%. If the new creditor collects on average say more than 60% of such debts, that’s how they make their money.
A letter or notice before action
The creditor may be using a solicitor because they’re taking you to court by sending a notice before action letter. This is not statutory (required in law), but the court generally expects it before legal proceedings start. The required process is that creditors must send you a letter of claim in the post before sending any court forms.
Creditors must also follow the Pre-action Protocol for Debt Claims as set out by the Department Of Justice. Just because you’ve missed a couple of payments, you won’t be taken to court out without the due process being adhered to.
What can solicitors do to collect a debt?
A solicitor letter from, or seemingly from a legal practice cannot make any additional demands from you than if it were sent directly from your creditors; they have no extra powers.
I’ve received a letter from a solicitor, what should I do?
Solicitor letters and calls about your debts are usually a sign that your financial situation is getting worse; so you need your options explained.
If a solicitor has contacted you and you’re not sure what you need to do, call us.