Additionally there is no doubt that this whole subject is one huge grey area and in a lot of cases depends upon whether the persons contacting you are either collecting the debt on behalf of someone else or employed by the Creditors themselves directly. In the United States if the Collector is employed directly then the Fair Debt Collections Practices Act does not apply to them and conversely if the collector is trying to collect on behalf of someone else then the Act does apply. Make sense?

The relevant legislation that covers this area for the United Kingdom and the United States is as follows:

United Kingdom

Consumer Credit Act 1974

The Administration of Justice Act 1970 (Section 40)

The Protection from Harassment Act 1997

USA

Fair Debt Collection Practices Act

The bottom line as in all cases is that it is a CRIMINAL offence if a Creditor or their Agents contravene any of the above relevant acts and that contravention causes the debtor or their family alarm, distress or humiliation. Specifically, harassment is a criminal offence under section 2 of the Protection from Harassment Act 1997 and if convicted, the transgressor could be liable to six months imprisonment and/or a level 5 fine (up to £5,000 fine).

In part two of this series we will go into the above legislation and the practical ramifications in more detail but let me stress here and now that this series is not all about trying to coach people into debt avoidance. The principle of Credit and Debt is as old as time itself and to act as some form of proponent for the abolition of one of the corner stones of Capitalism and the Free Market Economy would be nothing more than economic suicide and highly irresponsible but there comes a time when as far as some individuals are concerned, enough is enough.

As Shakespeare said To err is only human, to forgive divine, well I am not trying to imply that all types of successful debt consolidation rely upon divine intervention (though there is many an Insolvency practitioner who would concur that some Individual Voluntary Arrangement applications would need divine intervention to make them succeed) rather that we consider why it is that some of the less fortunate amongst us have difficulty in dealing with their debts.

The really intriguing aspect of all of this is that the profile of those who are now filing for either Bankruptcy or an IVA is changing almost daily. Gone are the old fashioned stereotypes and welcome to the world of everybody. Today a news item reported rather tragically of a UK Student who took his own life because his bank was not prepared to help him with a £1200 overdraft facility.

The Debtors they are a changing, (apologies to Bob Dylan) and so must be the way that we deal with them.