Receiving a letter from a debt collection agency may be a source of worry, especially if you’re not entirely sure what it means. It’s important to understand what the debt collection process involves to you are able to make informed decisions about your financial future.

The main thing to remember is not to ignore the letter. If you’ve missed several payments on your loan and your creditor is struggling to recover the funds, they will often enlist the help of a debt collection agency such as Wescot.  The creditor may simply employ the agency to recover the debt or they may sell the debt to them. In this case you would owe the agency rather than your creditor.

In your initial notification from the debt collection agency, they will outline how much you owe and encourage you to make the payments. They may contact you via letter, telephone, or sometimes at your home (although this is rare).

At this stage you can still negotiate with the debt collection agency. The agency will be eager to recover the money so they should be willing to consider a repayment plan which is manageable for you.

It’s important to understand that a collection agency is not the same as a bailiff – a bailiff will only be involved following a court order or an unpaid council tax bill. However, this does not mean that the situation should be taken lightly.

Defaulted debts will be placed on your credit record which may make it more difficult for you to obtain credit in the future. If you co-operate swiftly with the collection agency you may be able to negotiate with them to remove the mark on your credit record. In any instance of debt, you should always take action as promptly as you can.

Dealing with a collection agency doesn’t have to be a stressful or unpleasant process. The worst thing you can do is to ignore your debt, so try and work with the collection agency and figure out a way of making the payments as efficiently and manageably as possible.