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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 counter claim 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 counter claiming 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 Judgement after Determination. If this is more than you can afford then you can apply for a Re-determination, this is free to do and you must apply for this within 16 days of judgement. To apply for re-determination 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 Judgement 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 £14 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:
- 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 on 0800 280 2816