What is classed as a bad debt?
A Bad Debt can be considered a debt that has not been paid and is a debt which is considered by the original lender that may not ever be paid.

But the lender himself may not be left with nothing. He can sell the debt to debt agencies who are soleley there to speculate on whether they can get you to pay up or not.

How a Bad Debt Agency Works.
The buy the bad debts for a fraction of their on-paper price and then they try to recover the full amount from you. Even though they may not be convinced that you will pay the full amount, they will still make a good profit on even a partial collection of the bad debt.

The original lender also benefits as at least they have something back on the original debt.

For more on how bad debts are handled by lenders and how to improve your credit standing , the Complete UK Credit Repair Guide provides valuable information to help you to get new loans and credit cards. For details about the guide please click here