Court action may be started after 5 or 6 payments have been missed. If your debt regulated by the Consumer Credit Act (covering reputable sources of lending), the creditor must have sent you a ‘default notice’ and given you at least 14 days to reply before they can start court action.
By this stage, you’ll have already had lots of contact from your creditor. Your case may have been passed to specialist debt collectors.
The law varies around the UK and you can read about the process that will affect you below.
THE COURT PROCESS IN ENGLAND
After your account has been classed as ‘defaulted’ by your creditor, if you live in England you’ll receive some court forms in the post. These will explain what you owe and ask for information about your circumstances. You must reply straightaway.
In response, the court will give their judgement on your case, called a County Court Judgement (CCJ). This will tell you how much you should pay and on which dates.
Bear in mind that if you ignore their request for information, they’ll still give you a CCJ – and they may demand payments which are too high for your circumstances.
THE COURT PROCESS IN SCOTLAND
In Scotland, the documents you receive in the post from the Sheriff Court will depend on how much money you owe. If your debt is less than £5,000, you’ll receive a ‘simple procedure notice of claim’ (form 6A). If it’s more, you’ll receive an ‘initial writ’. Both will explain what you owe and ask for information about your circumstances. You should also receive a form called ‘The Simple Procedure Time to Pay Application’ or the ‘Application in writing for a time to pay direction’. Both give you the option to pay off your debt in affordable instalments.
Remember: it’s important to reply within their deadline, usually 21 days.
In response, the court may issue a Decision or a Decree. This stays visible on a public register for six years.
- If the court agrees to your instalments, you’ll either get a Decision with an ‘order for time to pay’ or a Decree with a ‘time to pay direction.’ When you stick to this, your creditor can’t take any more action against you.
- If you haven’t returned your instalment form or it was late, the sheriff will order you to pay the full amount.
- If the creditor doesn’t agree to your instalments, the court may ask you to come to a hearing, in order to set a regular payment amount.
THE COURT PROCESS IN
If you live in Northern Ireland, your creditors can apply for a money judgement from the court.
The money judgement will tell you how much you need to pay. Next, you must get in touch with your creditor, either paying off the debt in full or reaching an agreement on instalments.
If you can’t or don’t do this, the creditor can ask the Enforcement of Judgement Office (EJO) to collect the debt – and this could involve extra charges, too.
The EJO will send you a ‘custody warrant,’ meaning you can’t sell any of things you own because they’re now under the control of the EJO. To recover the money owed, they can take a variety of actions, ranging from seizing part of your wage or bank account to taking some things you own. In some circumstances, the EJO decides you have no way to pay back the debt in a reasonable time and issues a ‘Certificate of unenforceability.’
Get BacktoBlack. Talk to us today
Or, take your first steps to debt freedom
X CLOSE X
with our online form