Case ref: CL-00000001. Joe Bloggs. Interview by Joe Bloggs

1.1 Interview date

1.2 Actions Taken In Appointment

1.3 Client next steps

1.4 Advisor Next Steps

1.5.1 Do you require an interpreter or Language Line Services?

1.5.2 Do you have a Support Worker who attended the appointment? – Yes / No

1.5.3 Do you have any Accessibility needs

1.5.4 Please give details of needs and adaptations needed

And the client confirmed that the following adaptations are needed: Afternoon appointments because of the effects of medication. Simple communications - letters etc - with clear actions

1.6.1 Name

1.6.2 Case number

1.6.3 Photo ID Provided?

1.6.4 what ID

The photo ID that the client provided was passport

This confirmed the client's identity Y
 

1.7.1 What is your goal regarding your debts and money management?

Become debt free or have a manageable way to deal with debts

1.7.2 What does the client want from the advice session?

2.1.1 Does the client have any emergency or urgent issues?

2.1.2 Details

2.1.3 Are Enforcement Agents (Bailiffs) visiting?

2.1.4 Details

2.1.5 Do you have an eviction date?

2.1.6 Details

2.1.7 Are you being disconnected from their gas and/or electric?

2.1.8 Details

2.1.9 Do you have a possession hearing?

2.1.10 Details

2.1.11 Do you have any other court dates?

2.1.12 Details

2.1.13 Are you being threatened with committal?

2.1.14 Details

2.1.15 Are there any other emergencies?

2.2.1 Do you have any of the following health conditions? – tick all that apply.

• Mental Health Issue

2.2.2 Please give details of health problems and any other relevant information (e.g name of condition)

Borderline Personality disorder

2.2.3 How does their mental health condition affect their ability to manage your money or engage with debt advice?

Can cause difficulties budgeting due to issues with concentration. 

Their BPD can lead to erratic spending, particularly spending large amounts on clothing and technology.

2.3.1 What is your immigration status?

2.4.1 Who else is living at the property with you? (Relation and age)

The client lives alone

2.4.2 Client’s Housing Status

2.4.3 When did you move into the property?

2.4.4 Who is your landlord?

2.4.5 What type of tenancy do you have?

2.4.6 Details

2.4.7 How many bedrooms do you have?

2.4.8 Is your tenancy at risk?

2.4.9 Details

2.4.10 How much is your total rent?

2.4.11 How much Housing Benefit / Local Housing Allowance / UC Housing Costs do you get?

2.4.12 Are you subject to the under-occupation charge (bedroom tax)?

2.4.13 Details

2.5.1 Do you think their current financial and personal situation is stable or unstable?

2.5.2 What are the main reasons for their current financial difficulties? (tick all that apply)

• Sickness
• Managing affairs generally
• Difficulties budgeting

2.5.3 Are there any underlying issues

Client has told us that their mental health is the biggest contributor to their financial difficulties. 

2.5.4 Are the difficulties likely to be long term or temporary?

2.5.5 Why are the difficulties long term?

• Long term illness or health condition

2.5.6 Is their situation likely to get better, get worse or stay the same? – Get better / Get worse / Stay the same

2.6.1 Are you new or returning to the debt advice service?

2.6.2 Details

2.6.3 What actions have you taken so far about their debts?

No action taken. Client told us they have 'buried their head in the sand' and have not contacted any creditors or made any payments

2.6.4 Have you had any formal insolvency options (DRO, IVA, bankruptcy etc.) before?

2.6.5 Details

2.7.1 What type of income are you receiving? (Tick all that apply)

• Benefits & Tax credits

2.7.2 Details

The client confirmed that they were working and so they provided the following information:

The client works XXX hours per week.

The client earns £XXX

The client receives £XXX bonus or overtime.

The client has worked for their employer for:

2.7.3 Details

The client confirmed that they were in receipt of benefits and so they provided the following information that:

they are in receipt of: Universal Credit 

The client confirmed that they are in: LCWWRA

2.7.4 Do you have a pending claim for any of the following benefits?

• Personal Independence Payment

2.7.5 Any deductions from their benefits?

2.7.6 Details

The client confirmed that they have deductions for benefits for UC advance payment and they are not sure if there are any other deductions as they have not looked at their UC journal recently

2.7.7 Is the deductions for (tick all that apply)

• Universal Credit Advance
• Don't know

2.8.1.1.1 Equity in home yes/no

2.8.1.2.1 Savings yes/no

2.8.1.3.1 Vehicle yes/no

2.8.1.3.2 Vehicle details

Ford Fiesta 2003 - estimated £500 value. Currently SORN.

2.8.1.4.1 Pension Fund yes/no

2.8.1.5.1 Compensation yes/no

2.8.1.6.1 Backdate of Benefits yes/no

2.8.1.6.2 Backdate of Benefits details

Potentially if client is awarded PIP - the client would be awarded a backdated payment of an unknown amount

2.8.1.7.1 Redundancy Payment yes/no

2.8.1.8.1 Pending insurance/PPI claim yes/no

2.8.1.9.1 Other Assets yes/no

3.1.1.1 Do you need a Tax Code check?

3.1.1.2 Details

3.1.1.3 Benefit check carried out

3.1.2 Is their bank account at risk and you need information about basic bank accounts?

3.1.3 Details

We considered if the client’s bank account was at risk and whether thy needed information on basic bank accounts and the client’s bank account was at risk because they have a debt with their current account provider.  We advised that as the client owes money to their bank or building society, it is important to make sure that any income, such as their wages or benefits, does not go into that account. This is because in some circumstances, banks and building societies can take money from an account the client has with them to pay towards a debt that they owe them. We advised that this could leave the client with too little money to pay their essential bills, such as rent, gas, electricity, and food shopping.

We advised that a safe bank account is an account with a bank or building society that the client does not owe any money to. This includes money owed to credit cards, loans, and overdrafts.

We advised that when anyone applies to open a new safe bank account, the bank will usually check if they are eligible for their current account first. If the client is eligible, the bank is likely to offer them this type of account.

We advised the client that if they open a current account and don't want to get into debt with the bank, request that they are not given an overdraft facility. This is because if they have and use an overdraft facility, the bank is likely to start charging interest on their account. An overdraft is also repayable on demand, so their money would no longer be safe, and they would be in a similar position to where they are now.

We cautioned that it is also important to know that some banks belong to the same banking group, such as Royal Bank of Scotland and NatWest. When opening a safe bank account, we advised the client to avoid using a bank within the same banking group as a bank that they owe money to. If they do not, their money may still be at risk of being taken.

Unfortunately, there is not a central list of all UK banks and their membership available for anyone to search. However, we advised that there are several websites that give useful information about different banking groups. For example, the Lending Standards Board website lists its membership and shows which other banks they are linked to. For more information, go to wwww.lendingstandardsboard.org.uk and click on 'Our registered firms'.

We directed the client to The Money Advice Service website which has useful information on how to open an account, including account features, what identification they will need and things you should think about.  We suggested the client goes to www.moneyadviceservice.org.uk and searches for ‘How to open, switch or close their bank account’ or call 0800 138 7777.

We advised that most banks have a guarantee that will let people switch accounts within seven days. This is called the Current Account Switch Guarantee. Banks will also guarantee that payments in and out of the new account are switched over in time so that any regular bills and pay are not missed.

We advised the client that they may not qualify for a current account if they have missed payments on their bills or debts. If this is the case, a bank should offer them their basic bank account instead.   A main advantage of a basic bank account is that this type of account has no fees attached to it. As basic bank accounts do not provide an overdraft facility, we advised that the client will not be charged interest on the account and fees are not added for returned direct debits or standing orders.

We advised that the largest banks have been required to offer fee-free basic bank accounts. These include Barclays, Santander, Royal Bank of Scotland (including NatWest), HSBC, Nationwide, Co-operative, Lloyds (including Halifax and Bank of Scotland), TSB, Clydesdale, and Yorkshire Bank. 

A fee-free bank account with the above banks will usually have fewer features than a current account, but we advised that the client can still do the majority of things that they would need to. This includes setting up direct debits and standing orders, using a debit card to pay for items and withdraw money from a cash point, having their income paid into the account, checking their balance at a bank, at a cash machine or online.

We advised that other banks may also offer basic bank accounts, but they may not include all the features listed above or may include charges. We stated that it is important that the client checks what features an account offers and what charges the bank can add before opening a basic bank account with them.

Again, we noted that the Money Advice Service has useful information on how to open a basic bank account. Their website also has links to several banks' basic bank account information pages. This gives extra information about a particular bank's basic account, such as what identification the client needs to open an account. Go to www.moneyadviceservice.org.uk and search for 'Fee-free basic bank accounts' or call 0800 138 7777.

Finally, we advised the client that The Financial Conduct Authority says that, from September 2016, you are entitled to open a basic bank account if you are ineligible to open a standard bank account, unless it would be unlawful for the firm to open the account. If you cannot open a basic bank account, the bank should tell you why you have been turned down. If they do not, or you feel you have been turned down unfairly, you may be able to complain to the Financial Ombudsman Service.

3.1.4 Do you have any entitlement to child maintenance that is not being received?

3.1.5 Details

3.1.6 Do you have any entitlement to Marriage Allowance that is not being received?

3.1.7 Details

3.1.8 Do you have any entitlement to help with Council Tax that is not being received? (tick all that apply)

• Severe Mental Impairment

3.1.9 Details

We advised the client that they may be entitled to a Single Person Discount of 25% reduction in their Council Tax bill. This is because they are the only person over 18 in their home.  We advised the client that they will need their council tax number to apply and to contact their local authority as soon as possible.

3.1.10 Details

We advised the client that due to the adaptations at their property because of their health condition, they may be entitled to a reduction in their council Tax of 1 band.  As the client lives in the property as their own home, they need to have either an extra bedroom or kitchen for the use of the person with the health condition, a room for a special purpose or extra space for wheelchair use.  A council inspector will visit the property to check that the criteria has been met.

3.1.11 Details

We advised the client that due to their mental health condition, they may not be required to pay council tax.  This is called Severe Mental Impairment and as such they do not count on a council tax bill and so if they live in a couple then their partner could be entitled to a Single Person Discount of 25% reduction in the Council Tax bill. We advised the client that they will need their council tax number to apply and to contact their local authority as soon as possible.

3.1.12 Details

3.1.13 Details

3.1.14 Are you in receipt of Discretionary Housing Payment?

3.1.15 Details

3.1.16 Is an application suitable?

3.1.17 Details

We advised that a claim for Discretionary Housing Payment is an extra payment to help people who claim Housing Benefit or Housing costs as part of Universal Credit and are struggling to pay the rent but usually is not a payment towards any existing arrears.  We advised that it was not suitable because they do not have a shortfall in their rent.  A DHP may be claimed by completing an application form to their local authority. 

3.1.18 Details

3.1.19 PIP

3.1.20 PIP details

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3.1.21 Does the client require advice about non-dependent contributions?

3.1.22 Details

3.1.23 Does the client require advice about Budgeting and Saving?

3.1.24 Details

concluded that the client does require budgeting and saving advice.  We advised the client that Budgeting is important because it helps to see what money is coming in; to see what money is going out; to pay essential bills on time; to work out payments to any debts and plan any future spending.

We advised that the first stage is to work out a personal budget. We completed this during the appointment and provided the client with a copy of a budget sheet.

We advised that if the client cannot afford to pay their existing debts, taking out more credit will often make the situation worse. It might mean missing payments on their on­going household bills and other debts. It could make it harder to negotiate with their creditors, and can cause problems with some debt options, so we told them to think very carefully before doing this. We said that their personal budget will tell them if they have enough money left over to pay the monthly payments.

We said that it is a good idea to save some money each month if possible. This helps someone to plan ahead. We said that it can be hard to stick to repaying any debts, or essential bills, when an important expense needs paying. This could be that the car needs fixing, or an urgent house repair. We advised that they could spread out these payments, and make budgeting much less stressful, if they regularly put a bit of money aside to pay for expenses such as these.

We continued and said that other costs come up occasionally, such as MOTs, birthdays and Christmas. It is important to save regularly for these things, so the money is there when needed. We advised to set aside a monthly amount in the personal budget for these sorts of costs.

We directed the client to the money advice service website at https://www.moneyadviceservice.org.uk/en/categories/budgeting-and-managing-money for more budgeting and saving tips.

3.1.25 Does the client require advice about their TV Licence?

3.1.26 Details

3.1.27 Does the client require advice about Switching Energy Supplier?

3.1.28 Details

3.1.29 Does the client require advice about Warm Home Discount?

3.1.30 Details

concluded that the client would benefit from advice about the Warm Home Discount.  We advised that they could get £140 off their electricity bill for winter. We said that the money isn’t paid to them - it’s an annual one-off discount on their electricity bill, between September and March.  We said that they may be able to get the discount on their gas bill instead if their supplier provides them with both gas and electricity. We told them to contact their supplier to find out.  We advised that the discount won’t affect their Cold Weather Payment or Winter Fuel Payment.

3.1.31 Does the client require advice about Crisis Fund application

3.1.32 Details

3.1.33 Does the client require advice about Downsize/Lodger?

3.1.34 Details

3.1.35 Does the client require advice about Best Deals - Phone Calls?

3.1.36 Details

 concluded that the client would benefit from advice about best deals on their phone.  We advised the client to check their phone contract as if they are not tied into a fixed term then they may be able to make savings if they switch phone companies, for both landline and mobile phone. 

We advised that even if the client does not want to change their phone company, there are other ways to cut down on their phone bills.  The first is to pay by direct debit.  The client could also talk for free using software such as Facetime, Skype, Viber or WhatsApp, sop long as they use wi-fi.  We advised the client to check their contract as there may be extras like voicemail or an “unlimited package” that they do not need and are being charged for.  We advised the client to ask if their phone company has a social tariff. This may be helpful for people on certain benefits and only use their phone occasionally.

We advised the client to see if they can switch to paperless billing as this could save some money.  We advised the client that if they use directory enquiries, re­dial on the number they have found for them, instead of asking them to transfer the call.

We advised the client that if they have a bill that they cannot afford to pay and they want to keep the phone line, ask their phone company if they can pay by instalments. The phone company may be more likely to agree if the client sets up a monthly payment plan, perhaps by direct debit. They may also agree to let the client have only incoming calls for a short time to help reduce bills. When the arrears have been cleared, the client may then be able to go back to their normal phone package.

3.1.37 Does the client require advice about Best Deals - Broadband?

3.1.38 Details

concluded that the client would benefit from advice about their broadband costs.  We advised that there are lots of companies offering broadband so shop around for the best deal. We advised that the client usually also must pay for line rental, and many companies offer digital television packages too. Check to see if they can get a better deal paying for these separately where possible. Make sure any usage cap is suitable to avoid further charges. If their current contract is finishing, do not be afraid to ask for a better deal.  Ofcom recommend a number of price comparison websites, see www.ofcom.org.uk.

3.1.39 Does the client require advice about Help with Water Bills?

3.1.40 Details

concluded that the client would benefit from advice about their water bills. We advised that the client may be able to reduce their water bill or get help with water debt.  We advised that their water company has social tariffs, schemes to reduce bills and schemes to help with arrears.

We also advised that Water Meters only charge you for the water you actually use and this could make bills cheaper. We advised that the client can ask their water company for advice or use the water­meter calculator on the Consumer Council for Water's website www.ccwater.org.uk. We advised the client that if they can't fit a water meter, then to ask their supplier about an assessed charge.

3.1.41 Does the client require advice about Reducing/Help with Travel Costs?

3.1.42 Details

concluded that the client would benefit from help with their travel costs.  We advised the client that if they use public transport, they may be able to save money by buying a weekly, monthly or annual travel pass. With some bus companies, you can buy ticket using a phone app (free to download) or get a smart travel card then weekly bus cost is cheaper. Some employers have schemes to make it easier to pay as well.

Cycling is free but bicycles can be expensive. Some employers may use a scheme to help reduce and spread the cost.  Running a car can be very expensive including costs such as road tax and MOTs. We advised that it is important to save regularly, so putting money away to pay for any repairs that are needed.

3.1.43 Does the client require advice about Help with Prescription Costs?

3.1.44 Details

3.1.45 Does the client require advice about Charitable Trust Funds?

3.1.46 Details

concluded that the client would benefit from advice about charitable trusts.  We advised that Charitable funds give grants to people in financial need who meet their eligibility criteria, using a sum of money that the grant-giving charity has set aside for this purpose.

They are generally run by charities or organisations (such as energy companies) that have grant giving as part of their aims and objectives.  Although some grant-giving charities have only one fund, others run more than one fund that give money for different purposes.

Each charitable fund is very individual in the way that it works and the types of support it gives. Although the financial help offered is usually through grants, many funds also have other services.  Charitable funds often give financial help to people in need who qualify for their help in the form of a grant. This may be a sum of money, given as a gift or award, so it doesn't have to be paid back.  Grants may involve regular amounts of money to help you with bills and other living expenses. This may be given for a limited time or as ‘on-going’ support.  They may also be one-off grants (sometimes called specific gifts) to help pay for an essential item. This is often given as money or white goods and furniture.  They can be Educational awards to help with the costs of educational and training courses.   They may also be Vouchers or an amount paid in credit to a shop to allow you to obtain specific items you need, such as food or clothing.

If charitable payments are made or due to be made regularly then the payments are disregarded as income and do not reduce benefits.  If you get goods instead (payments in kind), then this is ignored as income.  We advised the client to go to the Turn2Us Website for more details and search for grants.   

3.1.47 Does the client require advice about Foodbank Vouchers?

3.1.48 Details

3.1.49 Does the client require advice about School Meals?

3.1.50 Details

3.1.51 Does the client require advice about Child Care Costs?

3.1.52 Details

3.1.53 Does the client require advice about sale of non-essential items?

3.1.54 Details

concluded that the client would benefit from advice about sale of non-essential assets.  We advised the client that if they have non-essential assets then these can be sold to generate money to be able to repay debts.  We dealt with this in the options advice.

3.1.55 Does the client have home contents insurance?

3.1.56 Details

they said that they did not currently have contents insurance but were aware of it.  They knew that if they were destroyed through an accident or incident such as a fire or theft then they would be able to claim on this for replacements but have chosen not to make a payment out for this insurance.

4.1.1 Are you disputing liability for any of the debts?

4.1.2 Details

4.1.3 Any potential challenge under Debt & Mental Health?

4.1.4 Details

concluded that there could be a challenge under Debt & Mental Health.

We decided this because the client has BPD.  We advised about this as an option with the other debt solutions.

4.1.5 Any debts statute-barred?

4.1.6 Details

4.1.7 Is client guarantor or have any debts with a guarantor?

4.1.8 Details

4.3.1 Do you have any rent arrears?

4.3.2 Details

The client said that they have rent arrears of £1000

4.3.3 Recovery Action

4.3.4 Do you have an agreement for payment of the arrears?

4.3.5 Details

have an agreement with their landlord

The payment agreement is:

4.3.6 Details

The arrears are £1000 and for: client did not pay their rent when they moved to UC as they had always been in receipt of HB and their mental health made paying rent regularly difficult. 

4.3.7 Any arrears disputed?

4.3.8 Arrears due to housing benefit/LHA issues?

4.3.9 Any of the arrears not rent?

4.3.10 Any disrepair at the property?

4.3.11 Details

We enquired about any disrepair at the property and the client said that there was disrepair at the property.  We therefore advised the client that they would benefit from seeking specialist Housing Law advice and so we referred the client to Shelter on 0300 330 1234.

4.3.12 Details

4.3.13 Notice Seeking Possession received?

4.3.14 Details

4.3.15 When?

4.3.16 Details

4.3.17 Details

We advised the client that it is important that them to understand that their full rent needs to be paid to ensure that they keep their home. This is whether the rent is covered by Housing benefit, Universal Credit, Discretionary Housing Payments or payments from wages or any third parties.

We advised that for the arrears, the council will expect that the client makes either an arrangement to repay the arrears at an affordable amount, usually no less than £3.70 per week, or that they engage with another option to deal with their debt, such as an insolvency option or applying for a Discretionary Housing Payment (DHP).

We highlighted that current tenancy arrears are a priority debt as the ultimate sanction is that the client could lose their home if they don't pay them or take no action.

To enforce the arrears, we advised that the council must issue the client with specific statutory notices and follow a 'Pre-Action Protocol. Reference CPAG DAH https://askcpag.org.uk/?id=-217552.

The first step in the possession process is to issue a Notice Seeking Possession (NOSP). This is a statutory letter that:

       Sets out the reasons (grounds) they want to evict the client;

       Tells the client when the council can start court action

       The client usually get at least 4 weeks' notice of court action but the council can apply to court immediately in some cases of nuisance or antisocial behaviour.

We advised that on issuing the NOSP and before issuing court proceedings, the council should follow the pre-action protocol which requires them to:

•        Contact the client as soon as reasonably possible to discuss the reason for their arrears, their financial circumstances (including any benefit entitlement) and repayment of their arrears by affordable amounts based on their ability to pay. The council should advise the client to seek debt advice.

•        Provide the client with quarterly rent statements that they can understand.

•        Take steps to ensure the client’s rights are protected if the council is are aware that the client is under 18 or otherwise vulnerable. We advised the client that if they consider themselves vulnerable, they should ensure that the council know this.

We advised that the council should work with the client to resolve any problems the client is having with any outstanding housing benefit (or Universal Credit) claims. In most cases, the council should not issue possession proceedings while such issues are being resolved. To do so may arguably be 'Unreasonable' in any possession hearing.  Reference CPAG DAH https://askcpag.org.uk/?id=-217552.

We advised that after serving a NOSP, the council should continue trying to contact the client to discuss the matter. If the client makes an arrangement with them to pay their ongoing rent and a sum to their arrears, the council should agree to postpone further action. We advised the client that should they fail to make an arrangement, then once the notice period expires, the council can begin court action to repossess their home.

We advised the client that upon receiving a Possession Claim hearing Form N119 they should respond to the claim using the Form N11R. As we are not specialist housing advisers, we advised the client at this stage to contact Shelter on 0300 330 1234.should they need advice on completing the form. We advised that the client should attend the hearing so that they can make their case. Failure to do so may result in a possession order being made.

We advised the client that they should get at least four weeks’ notice of the court hearing date. This hearing will be in a County Court (can also be called a Civil Justice Centre) and is not a criminal hearing.  There will be no wigs, gowns and the hearing will be held in private in a judge’s room with just the judge, representatives of the council and anyone the client wants to take with them including for support and/or representation. 

Further we advised that at least 10 days before their hearing, the council must provide them with an up to date rent statement, confirm details of the hearing and of the type of order that they are seeking and advising the client to attend.

We advised the client that the types of order that can be granted by the judge at the hearing are:

•        An order Dismissing the council's action: For example, if all the arrears have been paid off before the hearing date or if the council has failed to bring the claim correctly.

•        Adjournment: This puts off the case for a specified period to give the client time to provide extra information to support their case, or to pay off arrears in full, for example, by sorting out a claim for Housing Benefit.

•        Suspended possession order: which means that if the client keeps to the court’s order to pay their full rent plus a set amount towards the arrears each week or month, the council will not be allowed to evict them. If the client fails to comply with the order, the council can then obtain a warrant of possession allowing bailiffs to evict them.

•        Outright possession order: This means that at the end of a set period, usually four weeks, the client must vacate their home and give possession of the property back to the council otherwise the council could obtain a warrant of possession allowing bailiffs to evict them.

We advised the client that if the outright possession order has been made and the time to give possession up has expired or if they have not made the payments as required under the suspend ed possession order, the council can apply to the court for a Warrant of Possession.  They do not usually need to give you warning of this or need another hearing to do this.  This empowers County Court bailiffs to evict the client from the property and change the locks.

We advised that if the client receive a warrant for possession then it is still possible for them to stay in the property, but they must apply to the court for the warrant to be suspended before the date of the eviction.  The notice of eviction (Form N54) informs them about this. The client should complete Form N244 and apply to suspend the warrant of possession as early as possible before the eviction date. There is a fee for this of £50 but help towards costs can be applied for using court form EX160 if the client has a low income or receive certain benefits. The court will likely set a new date for a hearing and therefore it is recommended that they attend. We also recommended to the client that they seek specialist housing advice from Shelter on 0300 330 1234.

4.3.18 If yes, how much of the arrears are disputed?

4.3.19 Secured Loan Arrears

4.3.20 Council Tax Arrears

4.3.21 Details

The client stated that they have Council Tax arrears. 

The client said that they have arrears of £1200

4.3.22 Recovery Action

4.3.23 Do you have an agreement for payment of the arrears?

4.3.24 Details

4.3.25 Are you receiving the single person discount?

4.3.26 Any arrears from previous years?

4.3.27 Details

4.3.28 Is any Council Tax Reduction received?

4.3.29 Has a Liability Order been made?

4.3.30 when?

4.3.31 Are Enforcement Agents involved?

4.3.32 Do the EAs have a controlled good agreement?

4.3.33 Gas and electricity arrears

4.3.34 Recovery Action

4.3.35 Hire Purchase Arrears

4.3.36 Magistrates Court Fine

4.3.37 TV Licence

4.3.38 Child Maintenance Arrears

4.3.39 HMRC arrears

4.3.40 Tax Credits Overpayment

4.5.1 Non-Priority Debts

4.5.2 Do you have any other debts?

4.5.4 DWP Overpayments

4.5.5 Details

We advised that DWP benefit overpayments are a non-priority debt and these can be recovered by the following means:

•          Overpayments are usually recovered by making deductions from your ongoing entitlement or from other relevant income based benefits that you receive, such as ESA, JSA, Income Support or Universal Credit. However, if you are not currently receiving a benefit from which deductions can be taken, the following methods of recovery can apply:

o          (only if 9.1.1 selected) As you are working, your employer can be ordered to take deductions direct from your wages.

o          By using debt collectors who may add additional costs to the debt. Your credit rating may also be affected.

o          By getting a County Court order for debt recovery. This can result in the following enforcement action:

          (Only if 6.1.1 or 6.1.2 selected)A charging order as you are a homeowner, securing the debt to your home.

          (Only if 9.1.1 selected) An attachment of earnings order as you or a joint party are working.

          A third party debt order (Where an order is made against a person who owes you money, such as the DWP if they owe you backdated benefits, or from a bank holding savings for you.)

          Making you bankrupt if the debt owed is £5000 or more.

4.5.6 Housing Benefit Overpayments

4.5.7 Details

We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.8 Details

We advised the client that they have missed payments under their agreement, received a Default Notice and the debt has now been passed to a debt collection agency or sold to a debt purchasing company.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that the debt has been passed on to a third party, the third party will try to collect the debt through reaching agreement with client for a payment amount.  If this is not possible, the next step would be for the creditor to issue county court proceedings.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started. The court prefers that court action is avoided whenever possible and the protocol is designed to help with this. Where court action cannot be avoided, both the client and the creditor should try to act in a fair and reasonable way. This is to try and avoid causing costs and delays that are not necessary.

Before the creditor starts court action by sending the client a claim form they should send the client a letter of claim.   The letter should tell the client the amount of the debt and whether interest is being added.  If there was no written agreement, the letter should tell the client who made the agreement, what was agreed, and when and where it was agreed.  If there is a signed agreement, the letter should give the date of the agreement, details of anyone else who signed it and tell the client that they can ask for a copy of the written agreement from the creditor.

If the debt has been sold on to a debt collection agency, the letter should give you details of the original debt and creditor, when it was sold on and which company it was sold to.

We advised that if payment by regular instalments is being made or offered, the letter should explain why a court claim is still being considered.  The letter should give details of how the client can pay the debt, such as where and how to pay, and how the client can discuss payment options. 

The letter of claim should be sent by post, either on the date shown at the top of the first page, or if that isn’t reasonably possible, the following day. If the client requested that the creditor doesn't post information to them, and have provided other contact details, the creditor should use those details to send the letter of claim to the client.

The letter of claim should also include helpful information and other forms.

•          The information sheet - this is a guide which explains the client's rights and gives the client a step-by-step guide on what to do next.

•          The reply form – the client needs to send this back to the creditor within 30 days. Use the reply form to tell the creditor whether the client owes the debt or not, to request more information or to let them know the client is seeking advice.

•          A statement of means form – this is similar to a financial statement and should show the client’s income and expenditure as well as any other debts.

The letter of claim should:

•          include an up-to-date statement of account for the debt;

•          include the most recent statement of account for the debt and inform the client of any additional interest and charges added since; or

•          tell the client the amount of interest and charges added since they took the debt out, if no statements have been provided.

We advised the client that if they receive a letter of claim they should also receive a reply form with it. They need to send the creditor the completed reply form within 30 days of the date at the top of the letter, even if they are not able to complete all of the sections.

Section 1 allows the client to say whether they owe all of the money, some of it, none of it, or that they don’t know if they owe anything.

Section 2 must be completed if the client agrees that they owe all or some of the money being claimed.  This section allows them to say whether they can afford to pay the whole amount immediately, or if they will need to pay by instalments.

Section 3 allows the client to explain if they are receiving, or planning to seek, debt advice on whether they owe the debt or whether they can afford to pay the debt back.

Section 4 is used to ask the creditor to send the client more documents or send the creditor more documents such as proof of payment if some payments are missing from the account.

We advised the client that if they ask for a document or information the creditor must either provide it, or explain why it is not available, within 30 days.

When thinking about how to reply to a letter of claim it’s a good idea to think about whether there is still time for the claim to be made.  The Limitation Act 1980 sets out the rules on how long a creditor has to take certain actions to recover a debt. The time limits are different depending on the type of debt.

We advised the client that if they confirm that you owe the debt when they reply to the creditor they may re-start the time limit the creditor has to start a court claim and so they should only do this after seeking specific advice from us.

We advised the client that if they come an agreement with the creditor over repaying the debt, they should not take court action as long as the client keeps to the agreement.

If the creditor makes a court claim, the court will expect both the client and the creditor to follow the protocol. The court will look at whether the main points have been met. If some minor details were not met by either the client or the creditor, the court may still find this acceptable.

We advised that it is important for the client to follow the protocol because if the client does not reply within 30 days, or they do not follow the pre-action protocol in any other way, the creditor can ask the court to increase the debt with additional interest. They do not have to do this and are unlikely to do so if the client agrees they owe the money. But if the court feels the protocol was not followed closely enough, it can add an extra amount of interest to the debt, on top of any interest already claimed by the creditor.

If the creditor does not follow the protocol and they eventually win their court case, the court may reduce the amount of any interest added to the debt.

Further if the client does not follow the protocol, the court may decide that the client has to pay all of the court costs. If the creditor does not follow the protocol, they may have to pay all of the court costs.

We advised the client that if they reply to the letter of claim but cannot come to an agreement with the creditor, the creditor should give the client at least 14 days' notice that they intend to start a court claim.  The creditor should not start a court claim within either 30 days of receiving the completed reply form, or 30 days of providing the client with the documents they asked for.

We advised the client that if a claim is then issued and is not defended, a County Court Judgment is obtained.  This will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments and the Default Notice will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a County Court Judgment be obtained then this will have an even greater impact on the client’s credit file.

4.5.9 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

Attachment of earnings order (only if 9.1.1 selected)

The creditor can only apply for an attachment of earnings order if:

•                                         the client is employed; and

•                                         the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

Charging order (only if 6.1.1 or 6.1.2 selected)

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.10 Details

We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.11 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.12 Details

Attachment of earnings order

The creditor can only apply for an attachment of earnings order if:

•          the client is employed; and

•          the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.13 Details

We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.14 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.15 Details

We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.16 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

Attachment of earnings order (only if 9.1.1 selected)

The creditor can only apply for an attachment of earnings order if:

•          the client is employed; and

•          the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.17 Details

We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.18 Details

Attachment of earnings order

The creditor can only apply for an attachment of earnings order if:

•          the client is employed; and

•          the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.19 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

4.5.20 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.21 Details

We advised the client that they have missed payments under their agreement.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor, after following the Debt Pre-Action Protocol, to issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments for personal debts will not usually show on the client’s credit reference file, however should further action such as a County Court Judgment be obtained then these will have be registered and have an impact on the client’s credit file.

4.5.22 Details

We advised the client that they have missed payments under their agreement and a claim has been made in the county court and a judgment made against the client.  

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.23 Details

Attachment of earnings order

The creditor can only apply for an attachment of earnings order if:

•             the client is employed; and

•             the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.24 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.25 Details

Attachment of earnings order

The creditor can only apply for an attachment of earnings order if:

•          the client is employed; and

•          the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.26 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information..

4.5.27 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information..

4.5.28 Details

We advised the client that they have missed payments under their agreement but have not yet received court action.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.29 Details

We advised the client that they have missed payments under their agreement, a claim has been made in the county court and a judgment made against the client. 

We advised that the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.30 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.31 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.32 Details

We advised the client that they have missed payments under their agreement but no court action has been taken.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show not usually show on the client’s credit reference file, however, should further action such as a County Court Judgment be obtained then these will have an impact on the client’s credit file.

4.5.33 Details

We advised the client that they have missed payments under their agreement, a claim has been made in the county court and a judgment made against the client. 

We advised that the creditor candemand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.34 Details

Attachment of earnings order

The creditor can only apply for an attachment of earnings order if:

•             the client is employed; and

•             the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.35 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.36 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.37 Details

>We advised the client that they have missed payments under their agreement but have not yet received a default notice.  We advised the client that there is, therefore, still an opportunity to contact the creditor to reach an agreement with them or explore the other options that are available to them.

We advised the client that if no further action is taken then the next stage would be for the creditor to issue the default notice.  This gives the client 14 days to catch up with payments and if they do, the account will carry on, but if they cannot then the account will default.  If the account defaults, the creditor will then be able to demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client. 

We advised the client that the debt is at an early stage and so there is opportunity to prevent any court action, however this is the ultimate sanction and if a County Court Judgment is obtained, this will add additional costs to the debt and can then be enforced.  A County Court Judgment can be enforced through a number of methods including Attachment of Earnings Orders, Charging Orders, County Court Bailiffs, High Court Enforcement or a Third Party Debt Order, depending on your circumstances at the time of the enforcement.

We advised the client that any missed payments will show on the client’s credit reference file and may impact on the client’s ability to obtain credit in the next 6 years, however,, should further action such as a Default Notice or County Court Judgment be obtained then these will have an even greater impact on the client’s credit file.

4.5.38 Details

We advised the client that they have missed payments under their agreement, received a Default Notice, a claim has been made in the county court and a judgment made against the client. 

We advised that when they received the Default Notice, they had 14 days to catch up with payments but as they were not able to do this, the account has defaulted.  As such, the creditor can demand payment of the debt in full, pass the debt to a debt collection agency, sell the debt to a debt purchasing company and/or, after following the Debt Pre-Action Protocol, issue a claim against the client in the county court to obtain a County Court Judgment against the client.

We advised the client that as they have informed us that a claim had been issued against them in the county court and a judgment has been obtained.

We advised the client that before a creditor can issue a claim, they have to follow the pre-action protocol which describes the way the client and the creditor are expected to behave, and the actions the client should take, before a court claim for payment of a debt is started.

We advised that the client that as part of the claim they would have received a ‘claim form’ from the court and they would have had the opportunity to reply to make their offer of repayment. This is called the ‘admission form’ or N9A.

We advised that if the creditor accepted the offer, the client received a CCJ from the court telling them to pay in monthly instalments.  If the creditor did not accept the offer, the court would decide (or ‘determine’) what the client should pay each month. 

We advised the client that if they client cannot afford what the court has decided should be paid, the client can apply to the court to look at the offer again. This is called a ’re-determination’. There is no fee for this. The client must do this within 14 days of getting the order.  The client can do this by simply writing a letter to the County Court. Quote the case number. Attach the budget summary and explain why the client disagrees with the order the court has made.

The re-determination will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. The client can ask for a hearing when they write to the court and ask them to look at the case again.

If a District Judge made the original order without a hearing, then the re-determination of the offer must be decided at a hearing.  If there is a hearing, the case will automatically be transferred to the client’s local County Court hearing centre so the client can attend. The court will send a hearing date which the client must attend.  We advised the client that they should send the payments to the creditor, not the court. Keep a record of what they have paid and when. We advised the client that they could ask the creditor for a payment booklet to make it easier to pay or set up a direct debit or standing order.

If a District Judge made the first order on how much the client should pay at a hearing, the client cannot apply for a re-determination but must apply for the monthly payments to be reduced, or 'varied'.

We advised that a CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on the client’s credit reference file. The information will stay on their credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless the client pays the CCJ in full within one calendar month.

If the client pays the CCJ in full after one calendar month, they can ask for the entry to be marked as ’satisfied’ if the client provides proof of payment, but the CCJ will still stay on the client’s credit reference file. This is likely to affect the client’s ability to get credit.

The monthly payments you have been ordered to make may be reduced if your circumstances change or if you can’t afford them. You can apply for a reduction using form N245 which you can get from the local County Court hearing centre. There is a fee to pay. If you are on a low income or certain benefits, you may not have to pay the fee. If you have missed a payment because your circumstances have changed, you can use an N245 to apply for a reduction in your payments. If successful, this may stop your creditor from taking further action. See our Varying a CCJ fact sheet for more information.

There will usually be a fee to pay with the application but this this may not have to be paid if the client is on a low income at the time of the application.

Enforcement

The creditor will have to pay a fee to County Court for applications to enforce payment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

The creditor may be able to take further action against the client to enforce payment through the court. They can only take certain types of enforcement action if the client has not paid the CCJ as the court ordered. The methods of enforcement are explained in the following sections.

Information order

Before using enforcement action, a creditor may ask the client to go to a court for an interview about their income, outgoings and any assets they have, such as their house. This is called an ‘information order’.

Creditors can ask the court to arrange an information order interview at any time and not just when the client misses a payment. The interview consists of a set of standard questions and the client may be asked to bring things like pay slips, outstanding bills and credit agreements to the interview.  We advised the client that if they are asked to go to court for an information order interview, it is a good idea to work out a personal budget before they go.

It is very important that the client goes to the interview or tell the court if they cannot go. The court can send the client to prison for not cooperating with the process, so they must act if they are sent an interview date.

4.5.39 Details

Attachment of earnings order 

The creditor can only apply for an attachment of earnings order if:

• the client is employed; and
• the client has not paid the CCJ as the court ordered.

This means that the court can order the client’s employer to deduct a regular amount from their wages to pay back the debt. The creditor has to make an application to the court and the client will be sent a form to fill in and return to the court outlining the income and outgoings. The court then sets the amount that will be taken from the client’s wages. The client can ask the court to suspend an attachment of earnings order if their job will be affected.

4.5.40 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

4.5.41 Details

Charging order

The creditor can ask the court to put a charge on the client’s home which secures the debt. This means it should be paid off when the house is sold.

If your creditor applies for a CCJ on or after 1 October 2012, they can apply for a charging order even if the client keeps to the payments that the court ordered the client to pay.  If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if the client has not kept to the payments that the court ordered the client to pay.

A charging order application is a two-stage process. If the client objects in time, there must be a hearing in front of a judge before it is made final. Having a final charging order does not mean the client will lose their home. A further application has to be made asking the court to order a sale of the client’s home.

Most creditors are prepared to wait for the client to sell their home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

Bailiffs

If the client has not paid their CCJ as the court ordered, the creditor can ask county court bailiffs (also known as enforcement officers) to call at the client’s home with the aim of taking the client’s goods. Bailiffs do not have the right to come into the client’s home unless the client has let them in before. Do not let them in. The client may be able to get a bailiff’s warrant suspended using a county court form called an N245.

Third party debt order

The creditor can instruct someone who owes the client money to pay the creditor instead. The creditor can only use this type of enforcement if the client has not paid the CCJ as the court ordered.  The most likely way a third party debt order would be used is where the creditor finds out the client has savings in the bank and wants the bank to pay your savings to the creditor. It is a fairly unusual procedure which involves a hearing in front of the District Judge and a court order freezing the account.

High Court

If the CCJ is for a debt which is not regulated by the Consumer Credit Act 1974, your creditor can enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. ‘Taking control of goods’ involves High Court Enforcement Officers (HCEOs) visiting you. HCEOs are High Court bailiffs. See our High Court enforcement fact sheet for more information.

5.1.1 Client provided proof of income & expenditure

5.1.2 What proof of income & expenditure provided

Bank statements

5.1.3 What proof of income/expenditure still outstanding

UC statements for last 2 months

5.2.1 Did you complete a financial statement with the client? (inc. explanatory notes)

5.2.2 was it a completed or draft version?

5.2.3 Draft SFS details

5.2.4 what do you need from the client to complete sfs?

To be able to complete the statement we need the following from the client: UC awards

5.2.5 Variable Income/expenditure averaged?

5.2.6 Missing expenditure items?

5.2.7 Expenditure items high or low?

5.2.8 Deficit budget?

5.2.9 Large surplus budget?

5.2.10 Has a credit report been requested?

5.2.11 From where have the credit reports been requested?

The credit report has been requested from Experian, TransUnion and Equifax

5.2.12 Evidence on file to verify debts

5.2.13 Have any Square Peg Debts been altered on SFS

5.2.14 Has Housing Benefit been recorded as income on the SFS?

6.3 Informally Negotiated Arrangement

6.4 Details

If available but unsuitable = This option is available, but it is not suitable because the amount of time it would take the client to repay the debts (based on disposable income in the SFS) is not reasonable.

6.5 Full and Final Settlement

6.6 Details

6.7 Write Off

6.8 Details

If available and suitable = We advised a client that a Write Off was an available and suitable option.

We advised the client that it is not easy to convince creditors to give up their ability to collect a debt owed to them and agree to write their debt off. Most creditors are commercially-minded and will want to look at the options they have to collect their debt. We advised that the client needs to convince a creditor that writing off the debt is in their best interest as well as in the client’s. Usually, this means showing them why there is no likelihood of them getting enough money back to make it worth pursuing the debt any longer.

Although a write-off on a debt is not easy to get, it is possible and has clear benefits:

• The client is released from the burden of the debt;
• recovery action stops;
• stress and anxiety are reduced; and
• a fresh start.

Most creditors are able to consider writing off their debt when they are convinced that the client’s situation means that pursuing the debt is unlikely to be successful, especially if the amount is small. Even when writing off a debt is not an option for them, perhaps for legal reasons, they may decide not to recover the debt and effectively stop pursuing it.

(1 para below only if 6.1.1 or 6.1.2 is selected) Home owner

As the client owns their home, a creditor could try to make them bankrupt. This is to see if the sale of the property would pay back some or all of the debt, but this is rare. More commonly, they might try to secure their debt to the property with a charging order. If they do this, they might be able to get their money back once the property is sold. Applying for a write-off in such circumstances might put the client’s property at risk of being sold eventually to pay for the debt.

Client’s situation

Creditors may recognise that they have little chance of recovering their debts in particular situations. There are some examples listed below.

• Client rents their home, client has no surplus income after paying for basic needs, no savings and no available assets that the client could sell.
• Client has a serious or terminal illness, long-term ill health, or have a disability which means that client has little chance of getting or keeping a job.
• Client is getting benefit income only and need the support of a regular carer because they cannot manage on their own.
• Client is a pensioner, or is nearing retirement age, is on benefit income and likely to remain on a limited income.
• Due to the client’s circumstances, there is no realistic prospect that the client will be able to make a worthwhile payment to the creditor, either now or in the future. The situation may get worse.
• Other creditors have agreed to write their debts off.
• The person owing the debt has died without leaving any property, money or other assets to be passed on to family and friends.

In these situations the creditor may accept that it is not in their interest to pursue recovery of the debt. We advised that the client can also point out that if the creditor applied for a court order the court is likely to accept that you can only pay a token amount, for example £1 a month. It is unlikely to be worth employing a debt collector to try to recover the debt, as it may cost the creditor more to pay the debt collection agency than they get back.

Creditor refuses to write off

If the creditor at first refuses to write off the debt, ask them to explain why they have refused if they have not given any reasons.

Effects of a write-off

Getting a write-off on the debt is likely to have a negative impact on the client’s ability to get credit in the future for up to six years.   If a creditor writes off a debt, it means that no further payments are due. In addition:

• the balance should be set to zero on credit reference agency reports;
• the debt will be registered as a default on credit reference agency reports; and
• they can add a flag to the account to indicate that a write-off or a partial write-off was agreed.

Advantages

• It relieves stress and anxiety where you are in an exceptionally difficult situation.
• It allows you to make a fresh start.
• Your creditors accept that it is not appropriate to take any further action because of your situation.

Disadvantages

• Creditors do not normally agree to write off the debt.
• It will still show up on your credit file and affect your ability to get credit in the future.
• Some creditors choose not to pursue the debt but do not put this in writing.
• There is no guarantee they won’t chase you for the debt in the future.
• Some creditors may refuse whilst others agree.

6.9 S.13A Write Off

6.10 Details

6.11 Details

If available and suitable = We advised the client that s.13A write off is an available and suitable option. Clients with severe financial difficulties (ie deficit budgets) can apply for discretionary relief from council tax under Section 13A of the Local Government Finance Act 1992. Councils must consider each case on its merits and should not refuse on grounds of financial impact for the council. Appeals can be made to valuation tribunals. Local authorities have complete discretion and should be encouraged to use it in all cases which fall outside the exemption, discount and council tax reduction scheme rules. You can apply directly to your local authority or ask your debt adviser to make an application on your behalf, which should include a copy of your financial statement.

6.12 Debt & Mental Health Evidence Form Write Off

6.13 Administration Order

6.14 Details

6.15 Time Order

6.16 Details

6.17 Free DMP

6.18 Details

6.19 IVA

6.20 Details

6.21 Bankruptcy

6.22 Details

If available and suitable = A.   We advised a client that Bankruptcy was an available and suitable option.

            We advised that Bankruptcy is a way of dealing with debts that you cannot pay. While you are bankrupt any assets that you have might be used to pay off your debts. After a period of time (usually one year) most of your outstanding debts are written off and you can make a fresh start. This is known as discharge from bankruptcy. The effects of going bankrupt are the same whether you apply yourself or a creditor makes you bankrupt.

How to go bankrupt yourself

If you wish to make yourself bankrupt, you must apply online. There is no minimum amount of debt you have to owe before you can apply for bankruptcy.

Do I have to pay a fee?

You have to pay a total fee of £680 to go bankrupt. You can pay the fee online when you apply. If you cannot afford to pay the full fee all at once, you can pay the fee by instalments of at least £5. However, you must pay the full fee before you can complete your application. You can also pay the fee in cash at certain banks. However, if you choose this method, you cannot pay by instalments and you must pay the whole fee at once. If someone has agreed to make the payment for you, they can pay online when you apply.

What happens after I have applied?

Once you have completed your online application, it is sent to the adjudicator at the Insolvency Service. You do not have to go to a court hearing. The adjudicator will check your application to make sure that you cannot pay your debts as they fall due. They will also check that England or Wales is the correct place for you to go bankrupt. The adjudicator will decide whether to make a bankruptcy order within 28 days of receiving your application.

If the order is made you will then have an appointment to see the official receiver who deals with your bankruptcy. Sometimes this will take place over the phone. They will want to go through a long questionnaire with you to look at some personal and financial details. This includes things such as your National Insurance number, details of any pension policies you have, details of any assets you have, and looking at your income and outgoings.

Can my application be refused?

If the adjudicator refuses to make a bankruptcy order, they will send you a notice to tell you this. This is called a ‘notice of refusal’. This notice must tell you why the adjudicator did not make you bankrupt. You can ask them to review their decision, but you must do this within 14 days of the notice of refusal being delivered.

When the adjudicator reviews their decision, you cannot provide them with any new information. You must give reasons for asking the adjudicator to review their decision, but they can only consider the information you provided with your original application. If the adjudicator still does not make you bankrupt, they must send you a notice to confirm this. You can appeal to the court against their decision, but you must do this within 28 days of getting the second notice which confirms the adjudicator has refused your application. If you appeal to court and lose, you may have to pay extra court costs.

If you want to appeal to the court against an adjudicator’s decision, you will need extra help.

A creditor makes you bankrupt

A creditor can make you bankrupt if you owe £5,000 or more to that creditor and you have not been able to agree how to repay the debt. Creditors can ‘club together’ to make you bankrupt but this is rarely done. You can also be made bankrupt if have an individual voluntary arrangement (IVA) that fails.

Before applying to make you bankrupt, a creditor usually needs to send you a ‘statutory demand’. A statutory demand is a formal demand for a debt of at least £5,000. It requires you to either:

• pay the demanded amount;
• offer to secure the debt against any property you own (create a voluntary charge); or
• offer to pay the debt in a way that the creditor agrees to (for example by instalments).

Statutory demands can be hand delivered or posted.

You can apply to have a statutory demand ‘set aside’ in certain circumstances – for example if your debt is below £5,000 or there is a significant dispute about the money owed. There are strict time limits for doing this.

The creditor can apply for a bankruptcy order through the County Court if:

• 21 days have passed since a statutory demand was served; and
• the debt is still at least £5,000.

A hearing will be held if a creditor applies to make you bankrupt. It is important to attend the hearing if you want to try and stop a bankruptcy order being made. Contact us for advice if a bankruptcy hearing has been set and you want to defend against being made bankrupt.

Being made bankrupt without a statutory demand

In certain circumstances, for example you have an IVA that has failed, your creditors do not have to serve you with a statutory demand before making you bankrupt. If you have an IVA that has failed, or have received a statutory demand, contact us for advice.

Assets

The official receiver in your bankruptcy may be able to sell some of your assets. In certain circumstances (for example if you own a lot of valuable items) a separate insolvency practitioner may be appointed to deal with your assets. The person who deals with your assets in bankruptcy is known as the ‘trustee’.

Certain goods are not treated as assets. These are things such as clothing, bedding, furniture and household equipment for basic domestic needs.

Items necessary for you to carry on your employment such as tools, books or vehicles can be excluded. If you have valuable household items such as antiques, or expensive electrical equipment, then these could be sold in order to raise money. Your car might be sold if it is valuable, but it may be exempt if it is necessary for your employment. It can also be exempt if it is essential to meet the basic domestic needs of you and your family. Even if your car is exempt, you may have to buy a cheaper replacement depending upon its value. The effect of bankruptcy on your car can be a complicated area.

Your home

The only asset treated differently is the house where you live. See the later section Property.

If the official receiver decides you have assets then they will usually be sold as soon as possible.

If you are discharged from bankruptcy before any assets are dealt with, they will not belong to you on discharge. Your assets will continue to belong to (or ‘vest’) in the official receiver until they are dealt with.

Hire purchase agreements

There may be a clause in the hire purchase agreement that allows the hire purchase company to end the agreement if you become bankrupt. In this situation, you may have to return the item.

If your agreement is not ended, the official receiver may decide to sell the item depending upon how much is left to pay on the agreement and the value of the item. There may be some situations where you can keep an item if a third party takes over the agreement for you. In some limited circumstances, you may be allowed to keep making the payments under the agreement yourself.

Pensions

If you have a personal or workplace pension fund, it will not usually be affected by bankruptcy. You are likely to be able to keep it except in rare cases where you have paid very large amounts into your pension to try to stop creditors taking your savings.

If you have a personal or workplace pension fund that you have claimed, the official receiver will look at the income you get from it. They will take this into account when they decide how much you should pay into your bankruptcy.

Property

The value (or ‘equity’) in a property can be worked out by taking away from the value of the property the amount you owe under any mortgages and secured loans. We use the term ‘beneficial interest’ to describe your share of the equity. If the property is solely owned by you, your beneficial interest will usually be all of the equity. If the property is jointly owned with someone else, your beneficial interest will be part of the equity.

If you own property then this might be sold depending on whether it has any equity in it. If you or your spouse and any children live there then there are rules about how quickly this can happen.  Once you have gone bankrupt, your beneficial interest in your home is transferred to the official receiver or trustee.

If you are the sole owner then the whole of the value in the property is transferred to the official receiver or trustee.

With jointly owned property the official receiver or trustee is usually only entitled to the bankrupt person’s share of the equity (that is their ‘beneficial interest’).

Depending on your circumstances, you may be considered to have a beneficial interest even if you are not named on the mortgage.

It may be possible for the joint owner or family and friends to make an offer to the official receiver or trustee to buy out your share of the equity. This can be particularly helpful if there is little or no equity.

How long does the official receiver or trustee have to deal with my family home?

The official receiver or trustee has a maximum of three years from when you went bankrupt to deal with your family home. However, this action may be taken before three years have passed.

The term ‘family home’ means:

• the place where you normally live;
• the place where your spouse or ex-spouse normally lives; or
• the place where your civil partner or ex-civil partner normally lives.

Other properties (such as those you rent out) will not be dealt with under the rules described in this section. If you have a beneficial interest in a property that is not classed as your family home, such as a buy-to-let property.

Within the three years, the official receiver or trustee could:

• come to an agreement with you about the property;
• sell your beneficial interest to a joint owner or other third party;
• apply for an order of possession of your home;
• apply for an order for sale of your home; or
• apply for an order to give them security over your home (known as a charging order).

If they do not deal with your home within the three year time limit, it will automatically pass back to you.

If your beneficial interest is less than £1,000 when it is finally reviewed, no action will be taken and your beneficial interest will automatically pass back to you.

If your beneficial interest is more than £1,000 when it is finally reviewed, the official receiver may apply for a charging order against your home. Alternatively, a separate insolvency practitioner may be appointed to sell your home.

Is there a special scheme that can be used to buy back my beneficial interest?

If the official receiver is acting as your trustee and your family home is in joint names, you may be able to use a ‘property conveyancing scheme’ run by the Insolvency Service. This scheme helps to keep the cost of the process low.

However, you will not be able to use this scheme if:

• your property is in your sole name; or
• a separate insolvency practitioner is acting as trustee.

If you are not able to use the Insolvency Service’s property conveyancing scheme, the costs relating to the process of buying your beneficial interest are likely to be a lot higher. In any case, you will need independent legal advice from a solicitor. They will charge you for their services. Any third party who wants to buy back your beneficial interest will also need legal advice. Contact us for advice on how to search for a solicitor.

Keep paying your mortgage

If you have a mortgage or secured loan on the property, the ongoing monthly payments still need to be maintained to stop your lender taking possession action.

What if I rent my home?

If you have rent arrears from before the date of your bankruptcy order, your landlord can still take court action to evict you from your home. However, they cannot get the arrears back from you because they are a debt that will be included in your bankruptcy.

If you build up any rent arrears after the date of your bankruptcy order, your landlord can take action to evict you and get the arrears back.

The official receiver will work out whether you should pay anything towards your debts from your income. See the later section, Payments from income. You will not normally be allowed to include payments towards your rent arrears in this calculation.

The situation is more complicated if your landlord:

• has already taken court action against you;
• is threatening to take court action against you; or
• is asking you for payments towards the rent arrears.

Payments from income

The official receiver will look at your income and expenses to see if you have any spare income (or ‘surplus income’) after paying for essential living expenses. Usually if your surplus income is above £20 per month, the official receiver will expect you to pay it all into your bankruptcy.

Essential expenses such as your mortgage, rent, household bills and food will be taken into account when working out what your surplus income is. The official receiver will have an opinion on what they consider to be reasonable expenses to meet the needs of you and your family. If the official receiver thinks an expense is not reasonable, you could be asked to pay that money into the bankruptcy instead. For example, if the official receiver thinks a monthly mobile phone payment provides you with more allowances than you need, they will ask for the cost of the extra allowances to be paid into the bankruptcy.

Income payments orders and income payments agreements

Most bankruptcy orders will end after one year. You may be asked to sign a legally binding agreement to pay monthly instalments from your income to the official receiver for three years from the date of the agreement. This is called an ‘income payments agreement’. If your circumstances change then you need to tell the official receiver, as the agreement can be looked at again. If you do not pay, the official receiver can ask the court to order you to pay the instalments. This is called an ‘income payments order’.

If you do not make a voluntary agreement then the official receiver can ask the court to make an ‘income payments order’. This will run for three years from the date of the order. You can ask the court to look at this order again if your circumstances change.

If you receive only state benefits

If your only source of income is state benefits, an income payments agreement or order should not be made.

Negative equity

Be careful if you live in mortgaged accommodation, have secured loans on your home and your home is in negative equity. Negative equity means that if your home were to be sold, not all of the mortgage and secured loans would be repaid. In this situation, the official receiver may not take into account payments to the secured lenders when they work out how much you should pay under an income payments agreement.

Effects of bankruptcy

Your bank account

You will usually have to close your bank or building society account when you are made bankrupt. You may be able to open another one as long as the bank or building society allows you to. You must tell the bank or building society that you are bankrupt. You will usually have to wait to open the account until after you have gone bankrupt. It is up to the bank to decide if you can open an account with them.

Most high street banks allow undischarged bankrupts to open a basic bank account. The bank will usually check your eligibility for their current account first. If the bank decides that you aren’t eligible for a current account because you are an undischarged bankrupt, they should offer you their basic bank account.

Utilities

Gas, electricity and telephone companies usually want you to pay in such a way that involves you not having credit. If you live with a partner you could transfer the account into their name. Sometimes a deposit is also asked for as security.

Employment

Possible risk to employment

If you handle money, your employment could be at risk. If you work in the finance industry, you will lose your consumer credit licence.

Depending on the type of job that you do, your employment may be affected. Always check your contract of employment to see if bankruptcy is mentioned. You can also ask your staff welfare officer or trade union if you are uncertain. If you belong to a professional body which does not allow you to be bankrupt, you could be struck off. For example, this may affect solicitors and accountants.

Self-employment

If you are self-employed with a business that is currently trading, bankruptcy may affect your business in various ways.

If your business has assets which are not exempt, the official receiver is likely to decide that the assets should be sold to repay your creditors, and your business could be closed. If your business has few or no assets, you may be able to continue trading after going bankrupt.

You are not allowed to obtain credit of £500 or more during the bankruptcy without informing the lender that you are bankrupt. You may find it difficult to continue trading if your type of work involves using credit of £500 or more. Credit can include being given time to settle bills, such as 30 day invoices.

If you have a business lease, it may be considered as an asset. There may also be terms and conditions in the lease which means the landlord can end the agreement.

Creditor letters

Under the rules in the Consumer Credit Act 1974, your creditors will usually have to keep sending you annual statements, as well as arrears and default notices in a set format. This will happen even when you are bankrupt but should stop once you are discharged. Don’t worry; this does not mean that there is a problem with your bankruptcy. If you receive other letters demanding payment, you should take this up with the official receiver.

Obtaining credit

Even after the bankruptcy period you may find it difficult to obtain credit. The bankruptcy order will be registered with credit reference agencies for at least six years. Even after this time you may be asked whether you have ever been bankrupt, when applying for some credit, particularly a mortgage. Details of your bankruptcy are also kept on the Individual Insolvency Register for three months after the date of your discharge from bankruptcy.

Gazette advert

Details of your bankruptcy are usually published in a trade paper called ‘The Gazette’. Your bankruptcy details will not usually appear in your local paper. However, the official receiver can decide to advertise if, for example, they think you have not told them about all your assets.

Stopping your address being published

If you are at risk of violence, you can apply to the court for an order that would stop your address being published in The Gazette and on the Individual Insolvency Register. You would need to get a person at risk of violence order before a bankruptcy order is made.

Offences

Whilst you are bankrupt it is a criminal offence to:

• take out credit of £500 or more without telling the lender you are bankrupt;
• use a new business name without revealing the name you were made bankrupt under;
• act as a director of a limited company without permission; or
• act as an insolvency practitioner.

Limited company directors

A limited company will be dissolved if it has no director. If you want to go bankrupt but do not want the company dissolved, you may need to appoint another director in your place. If the company has more than one director, you should resign before going bankrupt.

Bankruptcy restrictions orders

You will usually be discharged from bankruptcy after one year. See the later section, Discharge. The court has the power to make a bankruptcy restrictions order against you if the official receiver feels your behaviour has been dishonest in some way, or if there has been ‘unfit’ conduct.

Unfit conduct can include:

• not keeping records that could explain a loss of money or property;
• gambling;
• trading whilst you knew you couldn’t pay your debts;
• causing your debts to increase by deliberately not managing your business properly;
• taking out credit which you knew you couldn’t repay;
• giving away your assets or selling them at less than their value to avoid them being included in the bankruptcy; and
• paying some creditors rather than others.

A bankruptcy restrictions order means you are not allowed to:

• apply for credit of £500 or more without telling the lender about the order;
• continue to run a business in a different name from the one in which you were made bankrupt, without telling those you want to do business with the name under which you were made bankrupt;
• become an MP or local councillor;
• e a director of a limited company or form a new limited company without permission; or
• be an insolvency practitioner.

Individual Insolvency Register

A bankruptcy restrictions order can last for between 2 and 15 years and will appear on the Individual Insolvency Register. See Useful contacts at the end of the fact sheet. This is a searchable public register including your name, address, date of birth and an outline of the reasons why you have a bankruptcy restrictions order, and how long this will last. If you break the order it can be a criminal offence.

Criminal proceedings

A bankruptcy restrictions order does not stop the official receiver from taking criminal proceedings for an offence, such as selling goods you have on a hire purchase agreement, or for putting false information on a loan application.

Discharge

You will be automatically discharged from your bankruptcy after one year, whatever you owe. If you applied for bankruptcy online you should get a letter from your official receiver to confirm that you have been discharged. If a creditor made you bankrupt and you need proof that you have been discharged, you need to apply to court and pay a fee for a certificate of discharge.

You can also apply to have your bankruptcy ‘annulled’ (that is, cancelled). This can be done for example, if you have paid all the debts and expenses of the bankruptcy in full, or you can show that a bankruptcy order should never have been made.

Delayed discharge

If you do not cooperate with your official receiver, for example if you refuse to provide information that they ask for, they may stop your discharge going ahead. Contact us for advice.

Which debts do I still have to pay after bankruptcy?

Although you will be released from liability to pay most of your debts once you are discharged, there are exceptions to this. Even after discharge you will still be personally liable for:

• magistrates’ court fines;
• student loans;
• arrears of maintenance or maintenance payments ordered by a court;
• Child Support Agency and Child Maintenance Service arrears;
• debts you built up through fraud; and
• debts you owe as a result of a personal injury claim against you.
•  

This is not a complete list of the debts that you will still have to pay after your bankruptcy ends.

Advantages

• It relieves stress and anxiety.
• It allows you to make a fresh start after a year.
• Your debts are written off if you have no assets.
• Most creditors cannot take further action against you unless the debts are secured on your home. There are some exceptions to this.
• You may need to make monthly payments for a maximum of three years.
• You may be able to avoid selling your home if your partner or a relative can buy out your share of its value.

Disadvantages

• Bankruptcy will affect your ability to get further credit.
• If you have equity you could lose your home.
• Secured creditors can still take action against you.
• You have to find the money for the fee and the deposit.
• Your assets may be sold by the official receiver.
• Not all your debts are written off.
• Your employment may be affected. Check your contract.
• If you run your own business, you may find it difficult to continue to trade.
• Details of your bankruptcy will be held in the public Individual Insolvency Register and published in the Gazette.
• You may have a bankruptcy restrictions order made against you for dishonesty or unfit conduct.
• In some cases the official receiver can take criminal action against you: for example, if you have committed fraud.

6.23 DRO

6.24 Details

6.25 Consolidation Loan

6.26 Details

6.27 Equity Release

6.28 Details

6.29 Pension Release

6.30 Details

6.31 Selling Assets

6.32 Details

6.33 Charitable Payment

6.34 Details

6.35 Water Company Customer Assistance Fund

6.36 Details

6.37 Do Nothing

6.38 Details

6.39 Moratorium

6.40 Details

6.41 Limitation Act defence

6.42 Details

7.2 Chosen solution

DRO

Water application to reduce ongoing water bill

7.3 Does the chosen option(s) meet the client goal?

7.5.1 Is the client suitable for the Mental Health Access Mechanism Breathing Space?

7.5.2 Details

7.5.3 is the client suitable for Breathing space

7.5.4 Details

The client is, however, suitable for mainstream Breathing Space because XXX

and To be eligible for a breathing space, you must:

1. Be an individual. Note: if you have a joint debt with a third party, the moratorium will apply to that other person but only regarding the joint debt.
2. Owe a qualifying debt.
3. Be ordinarily resident in England or Wales.
4. Not be under any insolvency option (DRO, Bankruptcy, IVA, Administration Order).
5. Not already be in any breathing space moratorium.
6. Not have had a standard breathing space moratorium in the past 12 months (unless you are applying for a Mental Health Breathing Space Moratorium).
7. Be unable, or likely unable, to repay some or all of your debt as it falls due.
8. A breathing space moratorium is appropriate if:
   1. A debt solution would help you.
   2. You are likely to be eligible for a debt solution during or as soon as possible after the breathing space moratorium ends.
   3. It gives you time to advise you about your options, for you to choose your best option and for necessary applications to be made.

When a Breathing Space moratorium may not be appropriate:

1. If you need to enter into a debt solution straightaway and can do so.
2. If you are concerned about the effect that a moratorium may have on a guarantor who may become liable to pay your debt.
3. If a debt is about to become statute barred, an application for Breathing Space could restart the limitation period.
4. If budgeting or financial capability options to increase your income or reduce your expenditure could quickly make it affordable for you to pay your debts.
5. If you have realisable assets that could be sold to clear your debt.
    

You can only access the scheme if your debt adviser assesses that it is appropriate for you. In order to determine this, you must engage with a full debt advice appointment and a full assessment of your income, expenditure, debts and circumstances will be required.

Excluded debts

Most types of debt can be included in a Breathing Space but the following cannot, with exceptions as stated. Collection and Enforcement for the following excluded debts will therefore continue:

1. Secured debts including mortgages secured on land, debts secured on assets whose value at least equals the amount of debt, hire-purchase and conditional sale agreements.
   1. Note: Arrears on these excluded debts are qualifying debts.
   2. If a debt is secured against an asset and the debt is higher than the value of the asset, the debt is a qualifying debt.
2. Business debts when, at the time of your application, you are VAT registered or trading in a business partnership. If you are self-employed and unsure whether your business debts are excluded, contact the Business Debtline’s webchat service at www.businessdebtline.org/
3. Fraudulent debts including benefit fraud where you have either admitted fraud, accepted an administrative penalty or been prosecuted and found guilty of fraud.
4. Criminal fines or compensation orders including penalties payable under a conviction, interest on fines and any associated penalties or charges.
5. Child maintenance arrears ordered under family proceedings or a child maintenance assessment.
6. Social Fund Loans.
7. Universal Credit payments on account including advance payments and budgeting advances.
8. Student loans made under the Teaching and Higher Education Act 1998 or the Education (Student Loans) Act 1990.
9. Damages due by you for causing death or personal injury to another person by Negligence, Nuisance or Breach of a statutory, contractual or other duty.
10. Council tax bills not in arrears.

However if you have arrears (missed instalments) of council tax, these are qualifying debts. If you have received a reminder notice, any unpaid instalments and your remaining year’s bill is a qualifying debt. Time to pay on a reminder need not have run out.

11. New debts:

New debts incurred during the moratorium can’t be added. Additional debts that accrued before the moratorium started but omitted on the application can be added but the moratorium period does not restart. e.g, if you add a debt with only four days to go until the moratorium ends, the moratorium will still end in four days for all debts.

12. Guarantor loans are qualifying debts unless excluded for reasons above, but the moratorium will not cover the guarantor who would likely become liable if you apply for a moratorium. Check with your creditor. This may mean that a moratorium is not appropriate for you if you do not wish to have the guarantor become liable.

Moratorium debts

Are qualifying debts you owe when you enter a moratorium and owed at the time your application is made.

When applying, your adviser will notify the Insolvency Service of all your qualifying moratorium debts including ‘additional debts’ that are left off the application to be added later, for example, council tax for which a reminder is not yet in place.

You must include all qualifying debts on your application. If you have qualifying debts that you are not prepared to include, you would not be eligible for a Breathing Space.

Note: You can continue to make payments to debts included in the Breathing Space if you can afford to after paying your ongoing essential expenditure.

Obligations and restrictions.

Breathing Space has obligations on you before and during the moratorium.

Before the moratorium, you must:

1. Take reasonable care to provide accurate information to your debt adviser.
2. Not deliberately withhold relevant information from your application.
3. To the best of your knowledge, provide details of all your debts at the date of your application.

During the moratorium, you must:

1. Inform your advisor if there is any change in your circumstances or financial position as failure to notify a change in circumstances could result in your Breathing Space moratorium being cancelled, examples of this are:
   You start a new job
   Your income increases
   You experience a problem that affects your ability to pay your ongoing liabilities or engage with your debt adviser.
2. Pay all of your ongoing liabilities as they fall due, such as:
   1. Mortgage or rent (excluding arrears owed at start of moratorium).
   2. Insurance (i.e. motor insurance, home and contents insurance)
   3. Income tax and national insurance contributions if you are not PAYE.
   4. Utilities i.e. water, electricity, gas, heating oil, solid fuel.
   5. Council tax (except where a reminder was issued and the whole bill for the year is included in your moratorium).
   6. Any other excluded debts / liabilities listed above such as fines.
   7. If you don’t pay ongoing liabilities when you can afford to, your moratorium may be cancelled. Therefore, you must try to keep up these payments and let us know if you have a problem. If you fail to pay an ongoing liability because you can’t afford it, your moratorium may not be cancelled but you must still tell us.
   8. Failure to pay an ongoing liability may mean that your account goes into arrears and defaults. Any debt incurred during a breathing space moratorium cannot be later included in it so you could face enforcement on that defaulted debt and your credit rating could be affected.
3. Not take out further credit of £500 or more once the moratorium has started including overdrafts and any joint borrowing.
   1. Note: the £500 is cumulative, so if you take out a loan for £450 and then open a bank account with an overdraft of £100, you have breached this restriction and your moratorium could be cancelled.
   2. Engage with your debt advisor so they can provide you with advice and help you to consider potential options. Failure to engage with your adviser may result in your moratorium being cancelled.