I Received a Call From a Collection Agency Collecting an Account I had In Another Country.
You took a leap of faith, a job offer in another country, packed up the family and moved to Beverly…..I mean, packed up and moved to a new new and different country.
You settle into the new country, learn the nuances and customs, and in time get yourself a credit card in that country, and maybe a car on finance, or possibly a loan of some sorts.
You immerse yourself in the new life and country.
Then suddenly…..the world shifts, the carpet is pulled out from under your feet, you lose your job!
Your job is your life, it is also your Visa to stay in the new country.
Without a job, you are forced to move back to your home country, which may be the UK.
By moving back and being without work, it also means you cannot afford to pay the payments on your credit card, your car loan, or any other loan/debt you may have.
But so be it, you will repay these once you are back home and working again.
A Knock At The Door
As time moves on, as it does, you forget about the credit card, car loan or personal loan you left behind. You have moved on, and are back home, hopefully working and getting back to the life you once knew.
It could be months, it may be years later, but there is a figuratively knock at your door.
This “knock” is in the form of a notice from a collection agency or law firm here in the UK, stating you owe money.
Your initial reaction is, I don’t owe anyone any money???
However, upon more inspection of the notice, and your memory serves you better, you remember….oh yes, I had some debts I left behind in (insert country here).
How can they be collected here in the UK? How did a collection agency or law firm here in the UK find me and why are they asking me for payments on an account in (insert country here)?
I will tell you why.
This is what allows an account to be collected in a country that the account may not have originated in.
In the terms and conditions of a loan agreement there is a clause that allows the account or debt, to be collected no matter where you may now live. This does not give authority to the bank or lender to collect in the country you live in.
You take out a loan in Dubai, then move to the UK. The bank in Dubai does not have authority to collect the debt in the UK. They can email, phone, and send notices to you demanding you make payment, but they have no real authority.
However, if the terms of the loan have the above clause, they can assign the account to a collection agency in the UK to be collected, and that UK collection agency does have authority to collect the account/debt here in the UK.
Follow me now.
The rub to all this is that the UK collection agency has to collect the account in accord with the rules and laws we have here in the UK.
The bigger rub is that you now have all the debt management and insolvency options here in the UK to deal with the account.
They can collect it, you can sort it.
All this means the following:
- The UK collection agency can collect the account originated in another country.
- The UK collection agency can seek out a CCK, make you bankrupt, and use all the UK collection tools available to them to collect the debt.
- You can make a payment arrangement in agreement with what the collection agency will accept.
- You can go bankrupt and include the account in your bankruptcy.
- You can include the account in a Debt Management Plan or an IVA.
The Selling of Debts
Oddly enough, debt or debts are an asset.
They are a receivable, money expected to come in each month almost like a wage, and as such, are an asset. And assets can be sold. So debts can be sold as well.
Think of unpaid accounts or debts as a non-operating asset. You are owed the money on paper, but you do not have the money in-house.
So yes, debts are sold. They may be sold for pennies on the pound, but they are sold.
An example may be you owe a loan of £2,000, and have defaulted. This loan may have originated in the UK, it may have originated in a country halfway around the world. But you have a debt somewhere.
The original lender is not making any money off this loan, so they sell it to a collection agency; which may or may not be in the country you now live in.
You get a notice saying instead of owing the Bank of Wherever £2,000, you now owe ABC Collection Agency £2,400.
ABC Collection Agency bought the £2,000 account/debt, and they may have bought it for £1,000, or possibly even less.
So the original bank has £1,000, which is more than what they had prior, and you still owe the debt, but now to the collection agency.
Debts are regularly sold, and can be sold in batches or large groups of accounts.
Do you now owe ABC Collection Agency the £2,000, yes, you do. However, you may be able to settle the account, paying less than the £2,000 originally owed to have the account paid in full.
More on settling a debt here.