How to Challenge Alleged Debts? 

If you have received a letter or a phone call from a creditor or a debt collection agency about a debt that you don’t recognise or that you think is incorrect, you may be wondering how to challenge it. Challenging an alleged debt means disputing its existence or amount and asking the creditor to provide proof that you owe it. 

Why Should You Challenge an Alleged Debt? 

Challenging an alleged debt can help you avoid paying money that you don’t owe or that is unfair. It can also prevent the creditor from taking further action against you, such as reporting the debt to credit bureaus, sending bailiffs, or issuing a court claim. 

How to Challenge an Alleged Debt? 

The first step to challenge an alleged debt is to contact the creditor or the collection agency and ask them for more information about the debt. You should do this as soon as possible, preferably in writing, and keep a copy of your correspondence. You should ask them to provide: 

– The name and address of the original creditor 

– The date and amount of the original debt 

– The details of any interest, fees, or charges added to the debt 

– The date and amount of any payments made towards the debt 

– A copy of the original credit agreement or contract 

You have a legal right to request this information under the Consumer Credit Act 1974 if your debt is regulated by this law. The creditor or the collection agency must respond within 12 working days, otherwise they cannot enforce the debt until they do. 

If the creditor or the collection agency fails to provide this information, or if you find any errors or discrepancies in their documents, you can dispute the debt and ask them to stop contacting you until they resolve the issue. You can also complain to the Financial Ombudsman Service if you are not satisfied with their response. 

If the creditor or the collection agency provides this information and you still believe that you don’t owe the debt or that it is incorrect, you can challenge it on various grounds, such as: 

– You were underage when you signed the agreement 

– You never signed the agreement or consented to it 

– You were coerced or misled into signing the agreement 

– You didn’t understand the terms and conditions of the agreement 

– Your name or other details are wrong on the agreement 

– The agreement is incomplete or invalid 

– The debt is statute barred, meaning it is too old to be enforced 

You will need to provide evidence to support your challenge, such as copies of your identity documents, bank statements, receipts, correspondence, etc. You should also explain why you dispute the debt and what outcome you want, such as cancelling the debt, reducing it, or setting up a payment plan. 

You should send your challenge letter to the creditor or the collection agency by recorded delivery and keep a copy for your records. You should also ask them to confirm in writing if they accept your challenge and close the matter. 

What If They Don’t Accept Your Challenge? 

If the creditor or the collection agency doesn’t accept your challenge and continues to pursue you for the debt, you may need to seek legal advice or contact a debt charity for help. You may also need to prepare for a possible court action if they issue a statutory demand or a claim form against you. 

You should not ignore any letters or documents from the court, as this could result in a default judgment against you. You should respond within the time limit and follow the instructions on how to defend yourself. You should also gather all your evidence and documents related to your challenge and present them to the court. 

Challenging an alleged debt can be a complex and stressful process, but it can also help you protect your rights and avoid paying money that you don’t owe. If you are unsure about how to challenge an alleged debt, you should seek professional advice or assistance as soon as possible. 

Contact the DRAM Team now, if you do not have anyone to turn to!