Receiving a letter from an unfamiliar company claiming to own your debt can be alarming. Understanding what has happened, what your rights are, and how to deal with the new owner is the first step to taking back control.
For general rights when dealing with debt collectors, see the Debt Rights and Protection hub.
What Happens When a Debt Is Sold
When a creditor sells a debt:
- They sell it to a debt purchaser (a company that buys debt portfolios)
- The legal right to collect the debt transfers to the purchaser
- You must receive written notification of the assignment
- The original creditor no longer has any interest in the debt
- The debt remains on your credit file under the original creditor’s entry — the purchaser may add their own entry
The debt is sold at a discount — typically 10–30p in the £1 depending on the age and type of debt. The purchaser profits by collecting more than they paid.
Your Rights When a Debt Is Sold
| Right | What it means |
|---|---|
| Right to written notice | You must be informed of the debt sale in writing |
| Right to request original agreement | You can request a true copy of the original credit agreement under the Consumer Credit Act |
| Right to dispute the debt | You can dispute the amount, the validity, or whether the debt is yours |
| Right to fair treatment | The purchaser is FCA-regulated and must comply with the Consumer Credit sourcebook |
| Right to complain | If unfairly treated, you can complain to the Financial Ombudsman Service |
Requesting a Copy of the Credit Agreement
Under Section 77/78 of the Consumer Credit Act 1974, you can request a copy of your original regulated credit agreement. The debt purchaser has 12 working days to provide it. During the time they are in default of this request, the debt is unenforceable through court — though it does not disappear.
Send the request in writing (keep a copy):
“I am writing to request a copy of the executed credit agreement under Section 77/78 of the Consumer Credit Act 1974. I enclose a £1 statutory fee.”
(Note: the statutory £1 fee applies to older agreements. Modern agreements may have slightly different rules — check current Citizens Advice guidance.)
Negotiating a Full and Final Settlement
Because debt purchasers buy debt at a discount, many will accept a partial settlement. There is no set formula for how much to offer — it depends on:
- The age of the debt (older = bought cheaper = more room to settle)
- The purchaser’s own policies
- Whether they believe you have assets or income to pursue via court
How to negotiate safely:
- Do not offer what you cannot afford — any amount paid resets the statute of limitation clock
- Get the settlement terms in writing first — including confirmation that the remaining balance is written off and will not be sold on
- State the offer is in full and final settlement — explicitly in all correspondence
- Pay by traceable means — bank transfer is best
- Keep all correspondence permanently
Impact on Your Credit File
When a debt is sold:
- The original creditor’s entry on your credit file remains for 6 years from the default date
- The debt purchaser may add their own entry
- The 6-year clock runs from the original default date — not the date of sale
- Settling the debt (in full or in part) does not remove the entry early — but it is marked as satisfied, which lenders view more favourably