What is debt?

How did we get here?

Prevention

Facing Facts

F.A.Q.

Link to Us

Advice

Bills Due

Mortgages

Credit Cards

Bank Loans

Bank Accounts

Court Action

Debt Collectors

Bailiffs

IVAs (Individual Voluntary Arrangements)

Bankruptcy

Pensions

Benefits

Savings

Relatives

Treasures

Case Studies

What do I do?

Credit Status

Useful Links

Your action plan

Court Action

You are taken to court for debt if the creditor (the person or firm whom you owe money to) feels they can recover that debt plus the costs of the action.

If the debtor (the person owning the money) cannot be found, the creditor many engage a tracing agent, but this may potentially be throwing more money after bad, so court action should be started with some certainty the defendant is still at the address known and has assets or other means to pay.

The course of events

• You will have received notices and/or telephone calls concerning non payment of the debt or instalments.

• You will have failed to discuss the problem and reach an agreement for lower payment over a longer period or reach an impasse with your creditor. If you have made a reasonable offer based on your circumstances this may seem unfair it is refused.

• He will serve on you a court summons claiming the debt in fall, court and legal costs and potentially interest on the debt until paid. This will give you a few weeks before the court hearing. Usually this is in the your local county court.

• At this stage you can do one of several things;

  • Engage a solicitor to argue your case (costing more money you potentially do not have) assuming you have an argument!!!

  • Pay the money in full

  • Pay the money into court and argue the case on some factors where you dispute the claim.

  • You write to the court and explain you cannot pay but offer to pay in instalments

  • Ideally you should attend the court, preferably with a friend for support.

  • Often large creditors do not attend the court and assume neither will you and they will get an automatic judgement. By attending you show keenness to meet the obligations and may well secure a favourable judgement. If you have valid reasons of argument the case may be thrown out and the creditor meets the costs of the action. Turning up may get the case thrown out if the creditor fails to attend.

  • If a judgement is awarded you can (if possible) settle the judgement in full or a Bailiff will call to your home or business and repossess goods to cover the debt and costs.

  • The judgement is recorded and lies on file, eroding your credit status. If the case is thrown out there is no record and your credit status is unaffected.

  • Once you have paid the judgement check with the court for a settlement and ask it to be removed. Credit Reference agencies may also need to be advised (with copy of the court settlement) so your credit report can be updated.

Summary

Court action is expensive so creditors tend to pursue other routes of negotiation first. Paying event small token amounts will stave off the issue of court proceedings, failure to pay anything may force the creditor to act.

Many tend to use debt collectors after a month or so of arrears as an alternative to court action, the choice is theirs as such. 

Even when proceedings are issued mistakes occur in court documents by getting wrong addresses and names of debtors so as such invalid the claim against you. Read documents carefully. If a judgement is secured under a wrong name at your address ask the court to remove it, as it will impair the credit status of people at the property - the costs will be borne by the creditor of the action, and they must refile the action if they wish to proceed.

Useful web sites

http://www.debtquestions.co.uk/legal_court_summons.php3

http://www.debtquestions.co.uk/legal_county_court_judgment.php3

http://www.debtclinic.co.uk/county_court_judgement.php