Some resources that can help you manage your debts
Are you worried about repaying loans, credit cards, mortgage payments and bills? Not sure how much you owe to your creditors or what you can afford to pay back to them monthly?
If you are behind with your payments to your debts, it is common to receive what is known as a DEFAULT NOTICE. But what does this mean? How does it impact on your credit rating and what can be done about it?
What is a default notice?
A default notice is the creditor’s way of officially informing you that you are behind on your repayments, and the account is about to default. You have to have missed at least 3 months payments, but for some companies it can be up to 6 months before you receive the notice. You are given a deadline (at least 2 weeks) and instructions on how to rectify the situation. If you are able to clear the arrears this will stop your account defaulting.
Issuing a default notice is the first step creditors need to take if they want to refer your debt for collection.
How do I know if I have received a default notice?
A default notice will clearly state on it-
‘Default notice served under section 87(1) Consumer Credit Act 1974’
There is no requirement for the creditor to prove you have received the notice, so it is possible that you may have received the notice to a previous address. You could also obtain a credit report to check to see if you have received one.
What happens if I cannot afford to pay?
If you are unable to clear the arrears, your account defaults. This means that the agreement that you had with the creditor is cancelled, and they will inform credit reference agencies. They will start to ask you for the full amount you owe them rather than the instalments you have missed. At this point they may also pass your debt to a collection agency, or take further court action.
How does it affect my credit rating?
Default notices stay on your credit file for 6 years. Even if you repay the debt afterwards, the debt will show as satisfied or settled but the default notice will remain on your file. This could mean that lenders are less likely to lend to you, or that you only have access to higher interest lenders rather than the ones offering the best rates. This could also mean that you struggle to get mobile phone contracts or you have to pay more for your house / car insurance as these also use credit agreements if you wish to pay in instalments.
What should I do?
If you are able to bring your account up to date, it is better to do this if possible. If you are not able to, it I sensible to agree a payment plan with the creditor which you can afford and they agree is acceptable. If you cannot agree a sensible payment plan with the creditor and you have other unmanageable debt, there are solutions such as debt management, IVA’s, bankruptcy or debt relief.
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available.
The Insolvency Service website has helpful information on https://www.gov.uk/options-for-paying-off-your-debts/overview to support those who find themselves in financial difficulty during the recession.
If you have been issued with a County Court Judgment (CCJ), it can often be a frightening and worrying experience. Usually, a CCJ is combined with an underlying debt problem, so you should seek help and advice if you find that you are struggling to make your contractual payments.
What is a County Court Judgement?
CCJ stands for ‘County Court Judgement’. It is an order made by the court against someone who owes money (defendant) to another person or company (claimant). The judgment is entered on the ‘Register of Judgments, Orders and Fines’.
Organisations such as banks, building societies and credit companies use the information on the Register when someone applies for credit such as a loan or overdraft. It helps them decide whether or not that person would be able to pay the debt back to the company.
How does the person I owe money to obtain a CCJ against me?
Firstly, in order to obtain a judgment, you must owe the person or company money. Generally the collection process will start with creditors sending reminders to pay and if these are ignored the debt is often referred to a debt collection business. Some creditors have in-house collection departments who will chase you for payment. Generally they will give you a time limit to pay the debt and following which they will issue a Notice of Default (NOD) which will stay on your credit record for 6 years from the date of issue. This will affect your credit rating.
If during this process you agree to a payment plan which is acceptable to the creditor, they are likely to cease further collection action as long as you stick to the agreed plan. If you do this early enough you could avoid getting a default notice.
If for whatever reason you don’t communicate with the creditor, they will step up their collection efforts. This could include referral to a specialist debt collection business who will use e-mail, phone and letters to contact you and remind you to pay.
What should I look out for when being issued with a CCJ?
The process begins with a claim form being sent to you. This form will have been stamped by the court and is usually blue in colour (but this can vary from each court).
You will also get a response pack that will include the following forms:
Defence and Counterclaim Form (N9B) – you should complete this if you disagree with the claim.
Admission Form (N9A) – if you complete this form, you are admitting to owing the full amount or amount you specify on the claim.
Acknowledgement of Service – this form is to be used if you wish to defend the claim and require time to put together your defence.
On the Claim Form there will be specific details about the case explaining what the creditor says you owe to them, the payment deadline and the details of which you need to pay.
There is a time limit in which you will need to reply to the Claim Form. This is 14 days from the date of issue.
If you get one of these letters or notices you should try to make every effort to reach an agreement with your creditor to pay back what you owe.
At The Debt Advisor, we are able to help you negotiate with your creditors if you are in debt and are struggling to maintain your contractual payments.
Once issued with a CCJ, what are my options?
When you receive your Claim Form you need to respond within the time period given. Whatever you do, don’t ignore the claim or miss the deadline. If you do this, the company claiming against you can request a default judgment. If the default judgment is granted, the courts will set a monthly repayment, or you may be ordered to pay the money in full at once.
Pay the amount you owe within 14 days of the judgment (plus any interest and court fees shown). If you do, you don’t need to send the forms back. There won’t be a court hearing and you will not have a CCJ recorded against you.
Ask to pay the amount later or in instalments. If you do decide to offer this, you will need to complete the N9A form and set out how you would like to pay. A CCJ will still be issued.
Dispute the amount owed. If you think that you owe less than claimed, you need to send the forms back explaining why. You should pay what you think you owe straight away or alternatively ask for time to pay. The court will decide whether you or the creditor is right. If the court decides that the creditor is right, they will issue a CCJ against you.
Dispute the claim. If you don’t think you owe anything, return the Defence Form that is sent to you within the Claim Form pack to the court explaining why you are disputing the claim.
Claim against the creditor. If you think you are owed money instead (i.e. if an electrician sues you for non-payment, but you think he owes you money for breaching the contract) you’ll need to fill out the Counterclaim form included within the Claim Form pack.
How do I pay my CCJ?
The judgment form will indicate how you should repay your debt. It’s important to make sure you have proof of your payment. So you should keep a record of your payments – and make sure that you repay what you owe within the deadline.
What happens if I can’t pay the CCJ?
If you can’t afford to make the payments ordered by the Court you can obtain a form from any County Court or online and make an Application to Vary an Order (N245). This allows you to tell the court how much you can reasonably afford to pay back to your creditor every month once you have taken into account every day living expenditure (i.e. bills and food). If the creditor doesn’t agree to the amount you have stated, then the court will decide how much you’ll repay.
What happens if I don’t make the correct payments on time?
If you don’t make the correct payments on time, then the creditor can ask the court to enforce payment using one of the following methods:
A Warrant of Execution
This gives a county court enforcement agent the power to visit your home or business to collect the money you owe, or see whether you have any goods to the value of the money which you owe.
If your creditor has asked for a Warrant of Execution, you will usually be sent a letter explaining that if you pay the amount of the warrant to the court within seven days, the enforcement agent will not come to your home or business.
A Charging Order
This is court order placing a charge on your property, such as a house or piece of land. The charge will be for the amount owed to the creditor.
A charge on a property usually means that if the property is sold, the charge has to be paid first before any of the proceeds of the sale can be given to you. However, this charge DOES NOT force you to sell your property.
If you are struggling to make your contractual payments on time and would like to seek advice, please call us on 0800 0851 825 and one of our advisors will be happy to discuss the options with you.
How do I find out if I have a CCJ registered against me?
You can search the Register of Judgments, Orders and Fines by post or in person. You can also make a request by email. There is a fee of £4.00.
You can also apply for a copy of the information held by the credit reference agency that your lender used when you applied for credit. This costs £2. Some credit reference agencies offer a superior standard of report, as well as the basic version. This might give additional information or a faster response time, but will cost more. However, if you ask them, the credit reference agency must still provide all the information that they hold about you for the basic fee of £2.
Registry of Judgments, Orders and Fines
Tel: 020 7380 0133
How does a CCJ affect my credit rating?
If you apply for credit, it may be refused and you won’t always know why. One of the reasons could be that a county court judgment (CCJ) has been made against you.
As soon as a CCJ is made, it is usually entered in the Register of Judgments, Orders and Fines.
When a creditor is deciding whether to lend you money, they will usually check on your financial situation with a credit reference agency. The credit reference agency will hold details of your CCJ, taken from the Register of Judgments, Orders and Fines. This may be the reason why credit was refused.
If you have been issued with a CCJ form or have a CCJ that you can’t afford to repay, please call us at The Debt Advisor on 0800 0851 824 or complete our quick contact form and one of our advisors will call you back. If you are self employed and struggling, our team at The Business Debt Advisor will help provide advice on your options. Please call them on 0800 781 0990.
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. The Debt Advisor complies with the Consumer Credit Act and you have the right to a cooling off period of 14 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.
Company Registration: 06248441 |Data Protection: Z9973946 | The Debt Advisor Limited is regulated and authorised by the Financial Conduct Authority Reg No : 606669
An enforcement agent (bailiff) is an individual who has a legal power to collect certain debts by either asking you to pay what you owe or taking and selling your belongings to raise the money.
What debts can they collect?
Bailiffs can be instructed to collect on a wide range of debts, including:
- Business Rent
- Council tax
- Parking penalties
- Business Rates
- Child Support
- Child maintenance
- County Court Judgments (CCJs)
- Magistrates court fines and compensation orders
- High Court Judgments
- Income Tax
- National Insurance
How to avoid a Bailiffs visit
If you’re behind on payments or owe money, it’s important that you deal with these debts before bailiffs are instructed to act against you.
Being visited by bailiffs can be very stressful and upsetting, but it can usually be avoided if you speak to the organisation you owe money to about your situation. Try to come to an agreement in which you can pay back your debt at an affordable rate.
If you are struggling with debts owed to numerous creditors and you simply cannot afford the sums they require, you may want to consider a formal solution including an IVA, Debt Relief Order or Bankruptcy all of which will stop creditor action.
If Bailiffs come to your home
They can only gain entry by “peaceable” means and cannot force themselves in, but they can enter via unlocked door, open window, over fence to go in via back door. There are some exceptions to this when:
- the bailiff is chasing up unpaid magistrates’ court fines;
- the bailiff wants to enter your trade or business premises to chase up unpaid county court judgements (CCJs) ) or High court judgements;
- the bailiff has been given a court order allowing them to use reasonable force to enter your property to collect debts owed to HM Revenue and Customs;
- the bailiff has been given a court order allowing them use reasonable force to enter other premises where they believe you may have deliberately taken your belongings to stop them being seized;
In these situations, a bailiff is allowed to use reasonable force to get into the premises.
- forcing a door open by breaking the lock or hinges;
- forcing a gate open;
- cutting through a padlock and chain that has been put over a door, gate or loading bay;
- breaking down a vehicle barrier.
- pushing you or anyone else out of the way;
- breaking a window to get in;
- taking up floorboards to access part of your property;
- climbing over a fence or wall.
You do not have to let a bailiff into your home, even if they say that you do. If you want to stop bailiff action, you will need to take steps to deal with the debt you owe. You could do this by contacting your creditor, speaking to the bailiff through the letterbox or a window, or leaving your home to talk to the bailiff outside.
- Ensure that all doors and windows are closed and locked at all times – bailiffs are allowed to get into your home through a usual means of entry, such as an unlocked door. It is advisable to keep your windows closed as it will make you feel more secure and protect you from illegal bailiff action.
- Make everyone in the house aware to keep windows and doors locked and not to answer the door unless it’s someone they know.
- Do not open the door to a bailiff – if there’s a knock at the door or the doorbell goes, ask who’s there before opening the door. If a child under 16 will be alone in your home, make sure they know to tell the bailiff they are under 16 and home alone, as this will mean the bailiff has to leave.
- You may choose to have a friend or a relative with you in the house for support, especially if you know the bailiff will be coming at a certain time.
- Do not let the bailiff in, even if they ask to use your toilet or say they just want to talk. Once the bailiff is in, your belongings may be taken. The bailiff may tell you that they have a right to enter your home to take control of your belongings. This is technically correct, but you also have a right not to let them into your home. The bailiff can only enter peaceably and with your permission, unless they have the court’s permission to use force.
- Speak through the door or letterbox. Ask to see their authorisation, proof of identity or evidence of the court’s permission to force their way into your home – they can put it through the letterbox or under the door.
- Ask the bailiff to leave, keep calm and polite and tell them you will contact the creditor directly to arrange a repayment plan for the debt.
- if you want to pay them, offer what you can afford to pay. If the bailiffs accept, ask to talk to them outside. Go out, close the door behind you and pay them outside – don’t let them into the house to pay. Make sure you get a receipt for the payment.
Moving goods to 3rd party property
As long as correct orders in place they can take your possessions from anywhere in England and Wales.
Bailiffs can take a vehicle wherever it is parked. They cannot take a car on HP but you need to prove it is a subject to HP.
Bailiffs need a license from the Security Industry Authority to clamp your car. Ask for proof of SIA registration.
Fees for taking goods
If County court has issued a warrant of execution you have to pay the fee for this whether or not good seized. Council tax is charged for 1st and 2nd visits even if goods are not taken.
What happens if Bailiffs get in?
- They can search your home.
- Bailiffs acting for County Court cannot take protected goods – clothing, bedding, furniture, household equipment or provisions for basic domestic needs.
- Bailiffs cannot take tools of trade used personally in employment, business or vocation.
- Bailiffs cannot take 3rd party goods, but you will need to prove they are owned by someone else.
- They cannot take rented goods, assets on finance, fixtures and fittings and children’s belongings.
- Bailiffs should only take goods which raise the amount you owe. However, generally personal possessions are unlikely to realise a great deal at auction which is why Bailiffs will generally look to take assets of highest value.
- When a bailiff has decided which of your belongings should be taken into control, you will be given a list containing the details of all the objects, called an inventory.
- The goods themselves will be treated as controlled goods, meaning they are now under the control of the bailiffs and you’re not allowed to sell them, remove them from wherever they are stored, or pass them onto someone else.
- You will be given a notice explaining this, called a notice after entry or taking control of goods.
- You may still be able to get your belongings back at this stage, providing you follow the right procedures that are set out in the information the bailiff gives you.
- You may be able to negotiate more time to find the money to pay what you owe by entering into a controlled goods agreementwith the bailiff. This is where you agree that you won’t get rid of or give away any of the goods the bailiff has taken control of while you pay back what you owe. If you break the agreement at any point, the bailiff can come back to take these belongings and use force to get in if necessary.
If the Bailiff has called and not been able to get in or if you have agreed to pay in instalments which you cannot afford, contact The Debt Advisor on 0800 0851825 and we will help you complete an application for suspension of a warrant and/or variation of an order.
If you have debt issues and would like to speak to an experienced advisor, do call The Debt Advisor today on 0800 0851 825.
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. You have the right to a cooling off period of 14 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.
The Insolvency Service website has helpful information on https://www.gov.uk/options-for-paying-off-your-debts/overview to support those who find themselves in financial difficulty during the recession.