“This Sunday (6 April 2014) will see the rules for bailiffs change substantially for the better”, comments Bev Budsworth, an insolvency practitioner and managing director of The Debt Advisor based in Old Trafford, Manchester.
Bev added: “The laws relating to bailiffs and their powers have been very complex and confusing and were made up of numerous statutes and common law developed over the past 400 years. The language used was archaic, confusing and frightening – distress, execution, writs of Fieri Facias . The Tribunals Court Enforcement Act 2007 sees part 3 come into existence which includes the Taking Control of Good Regulations 2013 as well as the Taking Control of Goods (Fees) Regulations 2014. This only applies to the way bailiffs collect debts in England and Wales. Bailiffs will now be known as ‘enforcement agents’.
“These laws will help to clean up the industry and ensure bailiffs play by the rules. They will also make sure businesses and public bodies can collect their debts fairly.”
“The Government has taken action following a consultation in 2012 on aggressive bailiffs. The new measures will:
- Stop bailiffs entering homes when only children are present
- Ban bailiffs from visiting debtors at night – they will only be allowed to enter between 6am and 9pm
- Ban landlords from using bailiffs to seize property for residential rent arrears without going to court
- Prevent bailiffs from taking household items, such as a cooker, microwave, refrigerator or washing machine, because they are deemed to be reasonably required to satisfy the basic domestic needs of the debtor
- Ensure a notice period of seven days is given to the debtor before bailiffs take control of the debtor’s goods
- Ban bailiffs from selling goods removed from a debtor, unless seven days have passed from the date the goods were removed
- Make bailiffs responsible for proving to a court that there are, or are likely to be, debtor’s goods on the premises before being granted the power to use reasonable force to gain entry. Before a warrant is granted, bailiffs must provide the court with information on the likely means of entry, the amount of force required and how the premises will be left in a secure state afterwards.
“There is much more clarity on fees especially when this relates to council tax arrears. There is a non-refundable fee of £75 payable to the Enforcement Agent (EA) as soon as the debt is handed over to them following a liability order. The EA must then give seven days’ notice of their intention to attend someone’s home to collect the debt.
“If the EA does attend the person’s home, a further fee of £235 becomes payable. This is payable only on the first attendance and only one enforcement fee can be charged no matter how many times the EA visit (This applies even if there are numerous liability orders). Also, there is a further fee of 7.5% of the portion of the debt value that exceeds £1,500. If the EA makes a list of the debtor’s possessions, they must again give seven days’ notice of the intention to remove the items.
“If, after seven days, the EA does remove the goods, a further fee of £110 is payable plus a further 7.5% of the portion of the debt value that exceeds £1,500. Therefore, if a person has a debt of £1,600 and goods are seized and sold, they will then be liable for fees of £660 on top of the council tax arrears. Clearly, it’s still a very expensive exercise if individuals fall into arrears and fail to set up payment plans.
“If the EA gets in wrong, no fees are payable. However, guidance is needed on what is involved in ‘getting it right’. The information on www.gov.uk needs to updated on the procedure to complain about an enforcement agent who does not comply with the new laws.
“Even if the EA enters into a controlled goods agreement (previously a ‘walking possession order’) it is not too late to do something. Clearly if you can pay the debt, in the seven days grace period before the EA takes your goods away, this is recommended.
“Generally the EA will try to get the debt paid as quickly as possible. It is important that you do not agree to pay instalments that you cannot afford. If you do, and the controlled goods agreement is suspended and you miss a payment, the creditor will ask the court to ‘reissue’ the agreement. The EA will call again and may take your belongings to sell at auction.
“If the EA has called and not been able to gain access 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. The form is N245 is to:
- Make an offer of monthly payments
- Complete a signed statement of their means.
“This is sent to the court that issued the warrant together with a fee of £40. The creditor will be notified and they then have 14 days to object, setting out their reasons. If the creditor does not object, a court officer will make an order suspending the warrant on the terms requested.
What happens if the creditor objects?
If the creditors objects to the terms of payment, a court officer will
- Determine the date and rate of payment
- Order the warrant to be suspended on those terms.
“If the creditor objects on other grounds and they require the EA to execute a controlled goods agreement, the court will fix a date of hearing before the district judge. It is important to attend the hearing and justify why payment by installments should be granted. The creditor will also be invited to attend. After listening to evidence from both parties, the district judge will make an order.
Reconsideration of suspended controlled goods arrangement
“Where a suspended controlled good arrangement is suspended by order of a court officer either party may apply for the order to be reconsidered. The application will be heard before a district judge who will make an appropriate 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.
The Debt Advisor is a commercial debt solution provider regulated by DEMSA and The Debt Resolution Forum which means that they must adhere to regulators codes of practice.