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Dealing with Debt

How we deal with debts can depend on a variety of factors including the client’s circumstances, what their financial statement says, what the client wants and the type of debt owed and stage of recovery. 


In essence we deal with priority debt first.  We also consider whether there is any possible dispute before identifying debt options and exploring the implications with the client further.


Dealing with Priority Debts

There is no set way of dealing with priority debts.  Action taken depends on the stage of debt recovery and the consequence, what the client wants, the existence of other priority debts.  We also look at the level of balances owed, how much income is available, whether interest and charges are accruing and the age and health of the client. 


Visit Advice Guide website for more information about dealing with priority debts

Challenging Debts

The options for challenging debts are not exhaustive. Sometimes there can be different options identified based on a client’s personal circumstances or the details of their debts.  If there is any doubt, always refer to a debt adviser.


For more information please visit the Advice Guide website:


How to Dispute a Debt   What to do if you can't pay back a debt  


If your client or service user indicates that the following may apply, please seek further specialist debt advice.

Making a Complaint

This can be about anything from charges and interest, balance disputes, liability disputes and how the debt is collected.  If it sounds unfair, then it could be.  Refer your client to debt advice.  If a creditor refuses a complaint, your client can take their complaint to the independent Financial Ombudsman Service.


Useful Links and Information about making a complaint:



Visit the Financial Ombudsman Service website about how to complain to them and also to see some of their previous decisions.


The Limitation Act 1980 – A time limit for recovering debt

This poses a limit of 6 years on recovery of credit debt, as long as the debt has not been acknowledged within this time.  Acknowledgement can include a letter, sending a financial statement or making a payment. Do not take any action unless court forms have been received.  If your client says that the debt is old always refer for debt advice.  You do not want to be acknowledging a debt for a client on their behalf.  


Could the agreement be unfair? Irresponsible Lending, being misled and complaints

Lenders must show that they have lent responsibly; that they have checked that the borrower can afford to repay what they lend. 


If your client obtained credit that they would not have been able to afford to repay back, they may be able to complain to the lender.  Creditors must also be clear about the terms of the agreement. 


If your client has been misled or are charged unreasonably high charges, they may be able to complain (see also complaints above).  Refer clients/service users to a debt advice agency.


Debts after death

There are some exceptions (such as joint debts) but some debts do not pass on after death so refer for debt advice to check this as some creditors may try. 


Young People

Young people under the age of 18 should only be able to enter into credit agreements for ‘necessaries’.  If a client obtained credit for a ‘luxury’ item when under the age of 18 and they gave their correct age, refer for advice.

Capacity to Contract

If a client could not have understood the terms of a contract at the time of entering into the agreement AND the creditor knew, or ought to have known this, then the debt may be challenged; seek debt advice.


Information about those who have mental health or learning difficulties or are under the influence of drugs or alcohol when they entered into the credit agreement:

Undue Influence

If a person has taken unfair advantage of their influence over another then the debt could be challenged. This can be actual influence or presumed.  If there is a possibility of undue influence, please refer in for debt advice.



A debt can be challenged if your client did not enter into the agreement. This can have wider implications for the client if a credit agreement was opened by family or friends. Contact Action Fraud and refer to advice.

You can search ‘credit fraud’ on the Advice Guide website for information options on this.


Advice on fraud can also be obtained from Action Fraud who can also give a crime reference number.

Consumer Credit Act 1974

The Consumer Credit Act imposes various requirements on creditors that make an agreement enforceable. This includes the information included on a credit agreement, the paperwork that a client should receive and any notices sent.


If a client says they have received little paperwork or the paperwork is wrong, refer for debt advice.


Reclaim Payment Protection Insurance

Your client may be able to reclaim this for a previous agreement if your client would not have been able to claim on their policy.


See the Advice Guide and Money Saving Expert websites for more information about Payment Protection Insurance and claiming this back:


A lender will sometimes ask for a second person to sign a guarantee that the money will be paid. This person is called a guarantor.  If the borrower doesn’t pay as agreed, a guarantor will be responsible for the debt instead.  If a creditor has not properly explained the risks to a guarantor then the guarantor may be able to challenge their liability.  If this is a possibility, please seek further advice.

Advice Guide has more information about how lenders agree whether to lend you money and about your rights when you borrow money:



When you act as an agent (usually for a catalogue company) you should set up a separate account for each of your customers to pay their money in.  If you don't do this, you can be held responsible for any money your customers don't pay.  If there is a dispute about liability relating to agents, please refer for debt advice.