Can Debt Collectors Blacklist You?

If your debt is in collections, you may have wondered whether debt collectors are allowed to blacklist you. The answer? Yes and no.

Debt collectors are allowed to send you letters of demand and request a judgment against you. If they do this, no credit provider will lend you money, as legally they’re not allowed to – it’s classified as reckless lending – and you’ll be too high a risk.

There’s no such thing as a blacklist: some list of names that financial services providers refer to when conducting assessments. Rather, they look over your credit record and check whether you have derogatory marks and can afford the loan or credit. If you have derogatory marks like judgments, lenders won’t grant you credit. So yes, in a sense, debt collectors can “blacklist” you, but not in the way that most people traditionally think of a “blacklist”.

In this post, we’ll debunk the mythical “blacklist” and discuss how debt collectors can stop lenders from lending you money, effectively “blacklisting” you.

The Myth of the Elusive “Blacklist”

Firstly, there’s no such thing as a “blacklist”. There is no list from the credit bureaus detailing which people lenders should and shouldn’t lend money to. If a debt collector has told you they’ll blacklist you, they’re lying and you can report them to the Council for Debt Collectors (CFDC) for harassment.

Debt Collectors Can Ruin Your Credit Record

Even though there’s no such thing as a “blacklist”, debt collectors can ruin your credit record and stop lenders from lending you money by placing a judgment or other derogatory mark against you, such as an involuntary sequestration.

In fact, as soon as a debt collector begins to engage with you, your credit record probably shows that the account mandating debt collection is in collections, which could also make lenders nervous about lending you money.

Judgments

Debt collectors are allowed to send you an S129 (collection letter). If you choose not to respond to the letter and not to show up in court, you could have a default judgment placed against your name. This derogatory mark may mandate that you pay for your debt collector’s legal fees and pay your debt as ordered by the court.

You could also face a voluntary judgment. This is when you show up in court and defend yourself but lose the case. In both cases, you’ll have to pay your debts as ordered by the court.

Garnishee Order

A garnishee, or enoulments attachment order, is when the court can order your employer to dock part of your salary for debt repayments. This also leaves a grotesque mark on your credit report and can stop lenders from granting you credit, as it will be considered reckless credit.

What Is Reckless Credit?

Reckless credit is when a creditor grants you credit without first conducting an affordability assessment or disregards the fact that you can’t afford the credit. Reckless credit is an offence. If a creditor is found to have granted you credit recklessly, a court may order that they write part or all of the debt off. Debtco Group can help you assess whether you’ve been recklessly lent credit.

Let Debtco Group Be of Assistance

We can stop debt collectors from contacting you through a process called debt review. Once you’re under debt review, you won’t have to be in contact with any of your creditors or debt collectors, ensuring peace of mind. You’ll also obtain reduced interest rates, lower repayments, and legal protection. To find out more, contact Debtco Group today.