Being in debt takes an emotional toll. One of the hardest things is not knowing if someone will appear on your doorstep or your place of business to collect a debt.
Fortunately, bailiffs are heavily regulated. They have to act according to a set of guidelines and your rights are protected.
The first thing you need to know about debt collection is the subtle but important difference between bailiffs and debt collectors.
Also known as enforcement agents, bailiffs have certain legal powers to enter your home in order to pay a debt.
Bailiffs can be used to recover lots of types of personal debt. For individuals, this can include:
Bailiffs have a legal right to visit your property and remove or sell your goods to pay off a debt.
In most cases, a bailiff can only be sent to your property after court action has been taken against you. The exception is with HMRC, who can send bailiffs to collect income tax and other outstanding taxes without taking you to court.
Debt collectors are slightly different. They have no legal powers to remove items to pay down a debt. But they may come to your home and ask you to make payments.
What do bailiffs do?
A bailiff will only visit after they have sent a letter to inform you they will been coming. This letter has to be received seven business days before a visit, so if you can afford it, you will have some time to pay before the bailiffs visit.
For most kinds of debt, a bailiff can only enter your home through a door and in a peaceful way, with your permission. If you invite a bailiff in or leave a door open, they can enter.
A bailiff can’t push past you to gain entry and they can’t enter if the only occupant of a house is under the age of 16.
Bailiffs must let you know who they are and why they are there. They will probably ask you to make a payment as this is the easiest way of recovering a debt.
If you have let them in, they can start itemising your property which they could later remove and sell at auction
If you have allowed a bailiff into your home once, they have a legal right to return and remove items to sell at auction.
If a bailiff is collecting a HMRC debt or a criminal fine, they are allowed to use force to enter your home, but this power is rarely used.
What items can a bailiff take?
For personal debts a bailiff will look for anything of value that they can sell to pay off a debt.
One general rule is that they can only take goods that they can physically touch. So if you don’t let them into your home, they can’t take goods if they see them through a window or letterbox.
A bailiff’s main target will usually be a vehicle, as long as it’s not on a hire purchase agreement or owned by somebody else.
If you own your own car or van, you may want to remove it from your drive or park it away from your house to stop bailiffs finding it.
Bailiffs will also target electrical goods and jewellery. But there are some things that they can’t take.
They must leave you with basic household essentials like a microwave, cooker, fridge and washing machine as well as bedding, a phone, a dining table and appliances to heat or light your home.
Bailiffs can’t take goods that belong to someone else. But they can take goods that you own jointly with another person.
They also can’t take pets or tools, books and other equipment that’s necessary to your work or study as long as its up to a maximum value of £1,350.
For businesses, bailiffs can be called in to collect business rates, rent, VAT and other debts
If you or your business owes tax, bailiffs don’t need a court order before they can visit to take control of goods.
If you have business premises, a bailiff may try and take control of goods there. You can still try and refuse entry to bailiffs, but this may be difficult if your company is open to the public.
Bailiffs have wider powers to gain access to businesses, so they may be able to force their way in.
Self-employed business debt
If you are a sole trader or a partner in a partnership, you will personally own part or all of any assets in your business.
There is no distinction legally between your business assets and your personal assets, so a bailiff may also arrive at your home to collect business debts.
Bailiffs are allowed to take a broad range of items from sole traders including:
Limited company debt
Most of the time, individual directors are not liable for company debts. This means that bailiffs can only take goods that legally belong to the business.
This can include:
As a director, you may be liable for debts if you have provided a personal guarantee for business borrowing.
For FREE professional and confidential help please contact Umbrella Insolvency Call: 0800 611 8888 or visit www.umbrella.uk