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Dealing
With Loan Arrears: |
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Most
loans that you have which aren't on a hire-purchase
agreement, and aren't secured on your home
(e.g. mortgages), are what are called 'regulated'
credit agreements. If you have several debts,
any loans are 'non-priority' debts. This
is because you can make an arrangement through
the courts to pay the loan back at a rate
you can afford. Provided you continue to
pay what you've agreed, and payments are
on time, the creditors cannot use methods
like bailiffs to get your belongings.
If you receive a 'default notice'
from the creditor make sure you get expert
advice, because this means that they can then
take court action against you should call our
advisers on 0800 881 8879 (FREEPHONE) or
email us at: debtadvice@24-7finance.com.
This is a confidential and free service.
Time order
If you have a regulated credit agreement and
the creditor has sent you a default notice,
you can ask the court for a 'time order'.This
means the court can reduce or even stop the
interest that is adding up on the money you
owe, and reduce the instalments you pay to
a level you can afford. But you have to show
the court that you have real difficulty making
the original payments. You may also have to
show that you would be able to pay the full
instalments again at a later time.
If you get a time order, the missed
payments will still be listed on your
credit reference file, so you may have trouble
getting credit in the future.
If you do want to apply for a time order, you
must first write to the creditor explaining
what you want, how much you think you can afford
to pay and over what time period. If the creditor
refuses your offer, you can apply to the county
court for the time order, and it will decide
whether what you have offered is reasonable.
Alternatively, you can simply go ahead and
pay the creditor what you've offered. If it
still doesn't think that what you're paying
is enough, it has the option of taking you
to court. You can apply for a time order at
this point. The advantage of this route is
that it would be the creditor, not you, who
pays the court fee
(currently £ 120).
Should you want to discuss your debts or need urgent advice call our advisers
on 0800 881 8879 (FREEPHONE) or email us at: debtadvice@24-7finance.com This
is a confidential and free service.
Dealing with debt: Your
legal rights
What the creditor can do to get their money |
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Enquiry: |
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If you don't apply for a time order
(or the court won't grant you one),
the creditor's main legal option to
get its money is through a 'money-only'
claim in the county court.
If a creditor succeeds in a 'money-only'
claim, you will have a county
court judgment (CCJ) registered
against you.This will go on your credit
file and will affect your credit rating-probably
making it more difficult for you to
get a loan or credit card, for example,
in future. It will also increase the
amount you owe, because you will have
to pay the creditor's costs awarded
against you. You must pay what the
court orders or the creditor can use
bailiffs and other measures to make
you pay. If you own your own home,
the debt could be secured against it
by means of a charging order (see 'Charging
order', for more about how this
works).
But there are advantages to
a CCJ, if you really can't
come to an agreement with the creditor
to pay back the money. In most cases
it should mean that they stop adding
interest to what you owe and the court
will generally set out a repayment
plan that you should be able to afford.
As long as you keep to the plan ordered
by the court, the creditor can't use
enforcement, like bailiffs, against
you.
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The'money-only'claims
procedure
The 'money-only' claims procedure starts
when the creditor (the 'claimant')
asks the court to send a 'claim form'
to you (the 'defendant').
At this stage, you have two choices:
Defending the claim
You can choose to defend the claim
in several situations including:
• if you have already paid the money;
• possibly if the creditor has already agreed to allow you to make lower
payments; or
• possibly if the creditor has refused to discuss your offer of lower
payments.
But don't defend a claim without getting
expert advice first. If you lose your
case, you may have to pay the creditor's
court costs, which could mean that
your debt becomes even bigger.
Should you want to discuss your debts
or need urgent advice call our advisers
on 0800 881 8879 (FREEPHONE) or
email us at:debtadvice@24-7finance.com.
This is a confidential and free service.
If you aren't going to defend
the claim, you might want
to ask the county court not to make
you pay any court costs.This is up
to the judge. He or she will decide
taking into account if the creditor:
• has behaved badly towards you, for example; or
• hasn't followed the proper procedure in getting the money you owe.
Admitting the claim
If you admit the claim, you should
come up with a payment plan, based
on what you think you can realistically
afford. If the creditor accepts this
offer, it will be recorded by the court
and you will have to stick to it. But
if the creditor turns down your offer,
then a court official will generally
consider what you have offered, what
the creditor wants, and then decide
how much you should pay (though there
is no hearing in court).
If you don't agree or the creditor
doesn't agree with the court's payment
plan, you have 14 days to ask for the
decision to be 're-determined' by a
district judge. If the court
Should
you want to discuss your debts or need
urgent advice call our advisers on 0800
881 8879 (FREEPHONE) or email
us at: debtadvice@24-7finance.com
This is a confidential and free service.
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24-7 Finance endeavour to bring
your the widest choice of financial resources.
Please visit one of our debt help links
below for more information:
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