OFT Close 35 Debt Management Companies.
The Office of Fair Trading have released a statement announcing that 35 debt management companies have surrendered their consumer credit license and have ceased trading.
The announcement follows on from the warning they issued in September, see our earlier blog, where they ordered 129 debt management companies to start complying with them or risk losing their license.
As well as the 35 who have lost their license, a further 15 could face losing their license after further investigation.
All 129 companies were asked to submit evidence to show that they are complying with the OFT. Out of those, 79 companies submitted their evidence of which the OFT are now reviewing. Seven debt management companies did not respond to the warning and are now being investigated.
The report broken down shows:
*35 debt management companies have surrendered their consumer credit license
*15 face losing their license
*8 companies have had their licenses revoked by the OFT
*7 didn’t respond and are being investigated
*Further 79 and still being reviewed.
Payplan can proudly announce that the OFT had no concerns about us.
If you have any concerns about your debt management company then contact the Office of Fair Trading. You can read their full statement here.
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Court Action – County Court Judgements
On Tuesday I blogged about Default Notices, todays blog will follow on from that to go through the different types of court action your creditors could then take if you do not acknowledge the notice.
What comes first?
Under the Consumer Credit Act 2006, before a creditor can pursue any kind of legal action they must issue you a default notice. Once the default notice has been issued the creditor can then seek further legal action against you.
The first thing they would look to do is issue you with a County Court Judgement or CCJ. A CCJ is where the creditor or claimant attempts to reclaim the money that is owed to them by going through the County Courts. The first stage of the process is a County Court Claim form or a N1, once you receive this you must act very quickly as you only have 14 days to respond to the form.
There are three options to deal with a Claim Form:
You can deny the debt. You can counterclaim against the creditor. Or you can admit the debt.
If you admit the debt, you must fill out your income and expenditure on the N1 as well as detailing who else you owe money to and you offer of payment, and send this to the creditor or their agent, as detailed on the claim form
If you are already in a plan with Payplan and the debt is on the plan, you can sign and send the N1 to us and we will do everything for you. (If you are denying or counterclaiming the debt, then Payplan is not able to help and you should seek advice from your local CAB or a solicitor.)
If you ignore the N1 or miss the deadline the creditor can then ask the courts for a Judgment by Default which means they can ask you for the full amount outstanding plus court costs.
What happens next?
Once you have sent the N1 form back to the creditor or their agent, they will then decide on what action to take. If the offer is accepted then you will be sent a CCJ detailing how, when and where to make your payments. This form will be called Judgement Acceptance N30 (1).
If you returned the N1 form in time, but the creditor objected to your offer of payment, you will receive a Judgment after Determination. If this is more than you can afford then you can apply for a Redetermination, this is free to do and you must apply for this within 16 days of judgement. To apply for redetermination you can either write a letter direct to the court or you can submit an Application Notice N244. If this is accepted then you will receive a General Judgment detailing how and when to make your payments.
If you failed to send back the N1 form or missed the deadline then the court will make a judgement on the offer of repayment and will issue the CCJ without you. The offer of payment may be more than you can afford which is why it is so important to send your form back as soon as possible. This form will be called Judgement in Default N30.
What happens if I can’t maintain the payments?
If your circumstances change and you find you can no longer afford the payments you should then apply for a Variation Order N245. This costs £35.00 to do and you will offer your creditor reduced instalments. If you are in receipt of certain income-based benefits, you may be able to get this form processed for free.
What happens if I stop making payments towards my CCJ?
If you stop making payments or do not keep up with the agreed payment then your creditors could seek further action in the form of
Bailiffs
Bankruptcy
Attachment of Earnings
Charging Order
If you have any questions at all about CCJ’s or need help with your debts then please call us. 0800 2802816
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Default Notices
People often get very worried if they receive a default notice through the door. Today I want to go through what they are and what you need to do so hopefully you needn’t worry in the future.
What is a Default Notice?
A default notice is an official notification from a creditor or lender to inform you that you are in arrears with payments. The default notice will have your full name and address as well as the full name and address of the creditor. It will also have the original credit agreement outline with details of how you have broken it, a settlement figure, what you need to do to solve the problem and what will happen if you don’t.
What to do next.
Once you receive the notice you need to act as quickly as possible. A default notice is usually a warning so it is always best to take it very seriously before the creditor takes any further action. You will usually be given seven days to comply with the appropriate action. After seven days the creditor will not necessarily proceed with court action but it is a risk. If you comply with the notice the problem will be resolved and the creditor won’t take any further action.
If you cannot afford the payment that they are proposing you make it is best to contact them and come to a different arrangement.
Will I have to go to court?
You won’t need to go to court for the default notice, but as I mentioned above it is often a warning so if you do not make any payments then the creditor could then pursue further action which would involve going to court. For example a CCJ.
Will it go on my Credit Report?
Yes a Default Notice will show on your credit report if you don’t pay the creditor within seven days and it will stay on there for six years regardless of whether you subsequently maintain monthly payments so it makes sense to settle the debt as soon as the notice is issued.
Who can issue a Default Notice?
Any of your unsecured creditors can issue you a Default Notice.
If you have received a Default Notice and you are not sure what to do or you need help with your debts then please call us on 0800 2802816 our advisors are fully trained and ready to help you.
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Story of the Week
All week you get to read my blogs about debt, what to do or not to do or what your options are. Today, and hopefully everything Friday, I want to share some of our client’s stories to give you all a chance to read about the people we have helped in the past and still continue to do now.
So here is this week’s story.
I find myself in this current financial position due to different reasons. They are my husband being made redundant twice this year. Firstly in January when he had to start claiming Income Support then after looking hard for work he started to work full time for a company on a lot less money than he previously earned.
He was made redundant again but this company continued to help us with giving my husband casual work. We thought this was better than returning to Income Support. But this income was still very low. At this stage I tried hard to work as much extra work (night shifts) as possible to make ends meet which made me feel very unwell and depressed. This has resulted in my marriage being very close to collapsing.
We also tried hard to contact companies to ask if we could have reductions in our outgoings like Council tax etc… But because my wage was of a certain level they said we were not entitled to any help. My husband has now secured a full time job again but it is still nowhere near the salary he previously earned.
Their IVA was approved a couple of months ago and they are now on their way to becoming debt free.
If your story is similar to this one then please call us 0800 2802816 and we could help you too.
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