What is bankruptcy?

 

 

Bankruptcy is a legal procedure in which your inability to pay your debts is declared. A third party will take over the handling of your financial affairs for the benefit of your

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available monthly income) among your creditors.

The main purpose of bankruptcy is to liquidate any assets and divide them (and any

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owed are overwhelming and there is little prospect that you will ever be able to clear or

make an offer to settle them.

Bankruptcy offers the opportunity to make a fresh start in circumstances where the debts

How does bankruptcy work?

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You can petition for your own bankruptcy by obtaining Forms 6.27 and 6.28.

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and change regularly.

Two fees are payable when the petition is taken to the court, these fees are significant

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form to apply for the fees to be waived. All forms and information on the current fees can

be obtained from your local County Court or by visiting

If you are receiving certain benefits, the court fee may be waived. Complete an EX160Awww.hmcourts-service.gov.uk

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expenditure (provide as much detail as possible using the guidelines provided and the

budget you have completed with your counsellor).

You will have to supply details of all your assets, liabilities and your income and

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than £750 but it is rare for this to happen in normal consumer debt cases.

It is also possible for a creditor to petition for your bankruptcy if you owe them more

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bankruptcy. The Official Receiver will agree what is to happen to any assets you may

have and, in cases where you have sufficient income to make regular payments, how

much the monthly payments should be and how long they will be made for. This is known

as an Income Payment Arrangement (IPA).

The Official Receiver is the court officer who handles the administration of your

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cannot take further action against you.

After a Bankruptcy Order is made the Official Receiver will inform your creditors, who

How long does bankruptcy last?

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continue to pay into your bankruptcy for up to 3 years where an IPA has been made.

You are normally discharged from your bankruptcy after one year; however, you will

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Longer periods may apply if this is not your first bankruptcy.

What does the Official Receiver take into consideration?

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In most instances your household goods will not be taken.

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and you would be given some money to buy more basic replacements.

Exceptions would be antiques - for example, an antique table and chairs could be sold

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broadband expenditure and could possibly request any of these items are cancelled.

The Official Receiver will also want to review any mobile phone, satellite/cable TV and

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essential to you before deciding whether to sell it or not.

If you own a car, the Official Receiver will take into account its value and whether it is

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The tools of your trade are normally exempt.

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away, transferred, or sold for less than its value, in the last five years. You should seek

specialist legal advice if you have any doubts

The Official Receiver may look into any property or valuable goods that you have given

Who will know?

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newspaper of record).

Your bankruptcy will be reported in your local paper and the London Gazette (the official

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The Official Receiver will contact your creditors.

Can you have a bank account?

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accounts visit

Yes, you will be able to obtain a basic bank account. For information on available bankwww.fsa.gov.uk or by calling 0845 606 1234.

Can you obtain credit?

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prospective creditor that you are currently bankrupt.

It is a criminal offence to obtain credit of more than £500 without advising the

Will your job be affected?

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speak in confidence to your union/personnel department/pension scheme administrator.

This will depend on your job. Check the terms and conditions of your employment and

What will happen to your credit rating?

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Bankruptcy Orders are kept on credit files for six years.

Other points to consider

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sell the property or buy you out.

As your property is jointly owned, you need to ensure that your co-owner is prepared to

NB. If any of your debts are guaranteed, please note that the guarantor will be

liable for the full outstanding balance of the debt.

How can I get more help?

Raising the fees for bankruptcy

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raise these first. You may be able to get the court fees part of the fee waived or reduced

dependent upon your individual circumstances, please contact your local County Court

for further advice on this.

Bankruptcy fees are always payable in full when filing for bankruptcy so you will need to

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creditors a token payment and save the remaining surplus towards the fee.

If your budget shows that there is surplus available, then you should only pay your

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reducing your expenditure on non essential items on your budget.

You could also increase the amount you save towards the fee each month by temporarily

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provide discretionary grants for the payment of bankruptcy fees. These trust funds are

usually operated by utility companies and are only available to their own customers. Not

all utility companies offer the grants so you would need to contact your individual

suppliers for further details.

If you do not have any surplus available then there are a number of trust funds who

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help pay the fees for you.

If you are not eligible for a trust fund donation then consider asking friends or family to

CCCS Bankruptcy Support Team

CCCS has a Bankruptcy Support Team, who offer additional help to people who have been

recommended bankruptcy.

If you have not yet decided whether bankruptcy is the option for you, they can:

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how it might affect any property or other assets).

Answer any questions you may have about how bankruptcy would affect you (including

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if you decided to opt for bankruptcy.

Talk you through the bankruptcy process and explain exactly what you would need to do

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decision for you.

If you have decided to go ahead with bankruptcy, they can:

Support you through the decision making process to ensure that you make the right

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Provide you with support throughout the bankruptcy process.

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Provide advice and answers to any questions you may have.

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Advise you on ways to raise the necessary fees.

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assistance with the fees.

Where applicable, make an application on your behalf to a relevant organisation for

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Provide you with information to assist you when completing your court forms.

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Book an appointment to complete your bankruptcy court forms with you.

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The team are available on 0800 975 9557

and will be happy to answer any queries you have about the bankruptcy process and your

individual situation.

Provide you with details of the local court where you will present your petition.* (between 8.30am and 5pm, Monday to Friday)

*

Calls may be monitored and recorded for training purposes.

Further information

More information is available from

enquiry line 0207 291 6895.

www.insolvency.gov.uk. There is also a telephone

THESE ARE GENERAL GUIDANCE NOTES ONLY - FURTHER INFORMATION IS

AVAILABLE FROM ANY COURT IN A SERIES OF FREE LEAFLETS.

Other Solutions

Improving your circumstances to make a realistic payment

arrangement

From the information you have provided, your current surplus of

you to pay your creditors in a realistic timescale, as it would take

repay your debts based on your current income and expenditure.

You may wish, therefore, to take the following steps to improve your financial situation in

order to increase your surplus and make a more realistic payment offer to your creditors.

Within this booklet there are suggested ways to improve your circumstances.

Once you have reviewed your budget and found ways to increase your income and/or

reduce your expenditure, please contact the Counselling Team to advise of any changes as

this may change the advice and options available to you.

If any of your debts are with the same bank as your personal account (where your income

is paid), we would recommend you move this to another bank. This prevents your bank

continuing to take payments from your account and ensures that you are in full control of

your money. A list of alternative bank accounts can be found at

calling 0845 606 1234.

£112 would not allow34 years 2 months towww.fsa.gov.uk or by

How much should I pay each creditor?

If you can afford more than £5 per creditor, we would advise you to share the money you

have available on a pro rata basis. Information on how to do this follows.

Making the calculation

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individual debt.

Use the 'surplus per month figure' from your budget to make 'pro-rata' offers for each

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advisable to use a calculator to work out offers as follows:

Add together your individual non-priority debts to give a 'total owed' figure, it is

Making the payment

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letter.

Start paying the offered amount as soon as possible using the offer of pro-rata payment

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up to date.

If you can, send the first payment with the offer and make sure you keep the payments

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Creditors prefer regular payments rather than ones you cannot sustain.

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Information on the action creditors can take is included in this advice booklet.

DO NOT BE PRESSURED INTO PAYING MORE THAN YOU CAN AFFORD.

What to do now

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amount you are able to pay them each month,

with your letter

Send an 'Offer of pro rata payment' letter to each of your creditors advising of theincluding the payment, if possible,.

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letter; this will support you in making reduced payments.

You will also need to include a copy of your budget and list of your creditors with the

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making a payment to your creditors

payment.

Your creditors may not accept the offer you make, however it is important to continueevery month. It is very unlikely they will return the

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this time they will want to review your account and to know whether your financial

situation has changed.

Some creditors may accept the offer of payment for a limited time period. At the end of

Individual debt × surplus per month ÷ total owed = individual offer

NB. If any of your debts are guaranteed, please note that the guarantor will be

liable for the full outstanding balance of the debt.

Your bank account

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account, it is necessary in most cases to have your salary or other income paid into an

alternative account at another bank where you have no debts.

Where you are making reduced payment arrangements that include your current bank

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you are in full control of your money.

This prevents your bank continuing to take payments from your account and ensures that

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0845 606 1234.

You have indicated that you have the following assets:

A list of alternative bank accounts can be found by visiting www.fsa.gov.uk or by calling

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It would make sense, if possible, to realise these assets and use the money to clear as

much of your debt as you can. This could make the remaining debt more manageable and

mean you are debt free much sooner.

Valuable goods worth £500

Template 'Offer of pro rata payment' letter

A template letter has been included in your advice booklet to enable you to contact your

creditors. Please use a photocopy of the letter and complete with the relevant details

required. Do not wait for your creditors to accept your offer, keep making the offered

payment every month.

Offer of pro rata payment

From:

Name:

Address:

Postcode:

Date:

CCCS Client No:

To:

Creditor's Name:

Account/Agreement No:

Dear Sir/Madam

In an effort to get finances under control, I have sought help from the Consumer Credit

Counselling Service (CCCS).

I am currently in financial difficulties because

(please state your reason)

After payment of day-to-day living expenses, I have £

make repayments to all my creditors.

On a pro-rata basis, I am able to pay you a regular amount of £

In the meantime, please send written acceptance of this offer and consider reducing or

stopping the interest and other charges on the account(s).

I will write to you again as soon as my circumstances improve.

Thank you in anticipation of your kind assistance.

Yours faithfully,

(surplus) per month with which to(amount) per month.

(Signature)

(Print Name)

Ways to Improve your Situation

If you can either increase your income or decrease your expenditure, it may result in more

options being available to you. The information below gives you ideas on ways to achieve

this. If you make any changes to your income or expenditure please contact the

Counselling Team to review your budget as this may alter the advice and the options

available to you.

You might be entitled to some benefits that you are presently not receiving:

Working Tax Credit

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You may be entitled to receive Working Tax Credit.

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including those who do not have children.

Working Tax Credit is a payment to top up the earnings of low paid working people,

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week, or aged 25 and over

To qualify you must be aged 16 or over with a child and working at least 16 hours perwithout children and working at least 30 hours per week.

Prescription Prepayment Certificate

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purchasing a Prescription Prepayment Certificate (PPC); this covers you for all

prescription costs. A 3 month PPC will cost £27.85 and a 12 month PPC costs £102.50.

As you need to pay for several prescriptions each month, you could save money by

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Direct Debit instalments.

To help spread the cost you can now choose to pay for the 12 month PPC by 10 monthly

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For further information or to apply for the PPC call 0845 850 0030 or visit

www.ppa.nhs.uk

It may also be possible to increase your income by one of the following methods:

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Increasing your hours at work.

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Working overtime if it is available.

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If you have any adult children living at home, ask them to make a contribution to the

household by paying board.

Getting a second job.

Rent a room to a lodger

You may need to bear in mind the following:

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loan agreement.

You may need permission from the landlord or mortgage lender under your tenancy or

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The effect on any benefit income.

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less likely where the owner or tenant remains in the property.

Contents and/or buildings insurance policies may sometimes be affected, although this is

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stressful and the family may not be able to cope with the additional stress of a lodger.

The personal situation of a family should be carefully considered. Debt is extremely

CCCS Welfare Benefits Service

CCCS has a Welfare Benefits team who can give advice on which benefits you may be

entitled to and how to claim them. To use this service, please call 0800 975 9565

8am and 5pm, Monday to Friday quoting your client reference number.

As benefits checks are completed for the household, it essential that you have the following

information to hand before you call.

* between

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Any benefit award letters (if you or your partner are already in receipt of benefits).

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Your last 3 payslips (if you or your partner are currently working).

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come from your employer).

Your last P60 Form (if you or your partner worked in the last tax year, these will have

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How much Council Tax is payable (before any deductions or discounts).

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If you rent, how much rent is payable (before any deductions or discounts).

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Your travel costs to work (if you are your partner are currently working).

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Please note your call will last approximately 30 minutes.

Your childcare costs.

*

Calls may be monitored and recorded for training purposes.

Budgeting Advice

Here are some ideas about how you can reduce your expenditure each month.

Utilities

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It may be possible that there is a cheaper provider for your utilities in your area. Visit

www.switchwithwhich.co.uk

electricity suppliers and switch online to get your best deal.

or call them on 0800 533 031 to compare prices of gas and

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to reduce your overall bill, e.g. loft or cavity wall insulation.

Visit www.saveenergy.co.uk or call them on 0800 512 012 to get energy efficiency ideas

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reduce the amount payable for your water charges.

Investigate with your water services provider whether installing a water meter would

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Making your payment by Direct Debit may also entitle you to a discount.

Telephone and Internet

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need or something you just want?

Do you need a mobile phone and a landline; is it something you or your family really

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If you have the internet, do you need broadband?

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limit the amount that you put on the phone each month, or switch to a lower tariff.

If you have a contract mobile phone, you could look to switching to Pay As You Go and

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weekend calls.

Landline expenditure may be reduced by switching to a deal that offers free evening and

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many impartial price comparison sites available on the internet to help you find the most

suitable deal for your needs.

To look for the best deals on your mobile, landline and internet packages, visit one of the

Satellite/Cable rental

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something you just want?

Do you need a satellite/cable package, is it something you or your family really need or

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the minimum package.

Contact your supplier to investigate the options available to reduce your subscription to

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Freeview boxes are available from most high street outlets and supermarkets.

Vehicle expenditure

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essential for work or the family.

Expenditure may be reduced by exchanging your vehicle for a smaller model if it is not

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car if it is not necessary on a day-to-day basis. (If you have a Hire Purchase Agreement,

check your agreement to see whether you can hand the vehicle back - if you can't, you

are not allowed to sell it).

Are all the vehicles in your household essential? Expenditure may be reduced by selling a

Food, toiletries and cleaning

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at other areas in your household spending, such as cleaning products, where you might

be able to reduce outgoings.

Don't compromise your health and well-being by cutting your food budget too low. Look

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offers that are available in the supermarket.

Perhaps you could look to switching to own brand products or making use of special

Clothing and footwear

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items only.

Try to minimise your spending as much as you can in this area, purchasing essential

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good deals on clothes and shoes.

Consider where you shop, as this can make a big difference. Supermarkets offer very

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uniforms. Further information can be found by visiting:

contacting your Local Authority.

If you are receiving certain benefits, you may be eligible for help towards schoolwww.directgov.co.uk or by

Hairdressing

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reduce expenditure.

If you have your hair cut regularly, look to increasing the time in between haircuts to

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your friends if they can recommend someone.

Spending could be reduced by changing your hairdresser, have a shop around and ask

Other non-essential items

The following items are considered as non-essential expenditure, and could be reduced or

removed to make more money available:

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Dry cleaning.

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Newspaper, magazines.

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Sport, hobbies and entertainment.

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Church/Charity donations.

Budgeting hints and tips

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it is necessary to put money aside for those things that need to be paid quarterly or

annually.

Your budget shows all expenditure as if it were paid on a monthly basis. This means that

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monthly basis to assist you with your budgeting. You may also find that paying monthly

by Direct Debit will entitle you to some discount.

It may be useful to contact your utility providers to arrange paying your bills on a

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done this before, but it is now important to track how you are spending your money.

Set up a 'spending diary' to keep control of your family finances. You may never have

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is something you or your family really need or whether it is something you just want.

When you are thinking of buying something that is non-essential, ask yourself whether it

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cards and return them to the issuing banks after cutting them in half. This will enable you

to clear your debt much quicker and prevent you from getting any further into debt.

We would also advise that you stop any further borrowing and destroy your existing

Please Note: Payments are

This budget has been prepared for Mr Shobir Ali (CCCS Client No: 1282721)

not being administered by CCCS

Your Budget

Your Income Amount

Your take home pay £858

Your partner's take home pay

Rent/board received

Pension received

Any other income received £305

Income Support

Jobseekers Allowance

Your Income Amount

Incapacity Benefit

Disability Living Allowance

Working Tax Credit

Child Benefit

Child Tax Credit

Child Support

Total income £1,163

Additional information Comment

No of adults 2

Dependants 0

Totals Amount

Total income £1,163

Total expenses £1,051

Surplus (Deficit) £112

Housing Amount Comment

Rent

Mortgage £460 £30 towards arrears of £600

Secured loans/2nd mortgage

Mortgage endowment premium

Service charge/ground rent

Water £8

Council tax £133

Gas £40

Electricity £30

Other household fuel

Household services

Building and contents insurance £42

Telephone, mobile & internet £40 Landline: £29 / Mobile: £5 / Internet: £16

TV licence £12

Satellite £15

Repairs and maintenance

Household appliance rental

Child maintenance

Childcare

Fines, CCJs, Decrees

Life insurance/pensions

Medical/accident insurance

Hire purchase

Transport

Vehicle spares and servicing £10

Road tax £10

Motor insurance £20

Vehicle breakdown cover

Fuel & parking £20

Public Transport

Food & housekeeping

Food, toiletries, cleaning £113 Client only

School meals/meals at work

Pets, pet food/insurance

Tobacco

Misc. goods & services

School trips/activities

Medicines/prescriptions £7

Dentist/opticians £10

Hairdressing £18

Union/professional fees

Laundry/dry cleaning

Education fees

Personal & leisure

Clothing & footwear £33

Newspapers/magazines

Sports, hobbies, entertainment £15

Children's pocket money

Church/charity donations

Sundries/emergencies/other costs

Sundries/emergencies £15

Loan from family/friend

Total expenses £1,051

Budget comment

CCCS have recommended pro rata payments at present for all unsecured debts; these payments will be made by the client direct to

creditors. We request, that, until such time as the client is in a position to improve their offer, creditors consider stopping interest and other

account charges.

THIS BUDGET IS PREPARED IN ACCORDANCE WITH THE PRINCIPLES OF THE BBA/MAT EXPENDITURE GUIDANCE

This creditor list has been prepared for Mr Shobir Ali (CCCS Client No: 1282721)

Your Creditor List

Creditor

name

Debt

type

Outstanding

balance

Contractual

payment

Ownership

of debt

1 Barclaycard Credit

Card

£3,084 £93 Client only

2 Citi Card Credit

Card

£3,200 £96 Client only

3 Egg Credit

Card

£9,514 £286 Client only

4 Marbles Credit

Card

£3,706 £112 Client only

5 Mint Credit

Card

£3,448 £104 Client only

6 Natwest Overdraft £7,265 £364 Client only

7 Natwest Credit

Card

£2,201 £67 Client only

8 Natwest Personal

Loan

£12,992 £259 Client only

9 Virgin Credit

Card

£547 £17 Client only

TOTAL £45,957 TOTAL £1,398

Priority debts

It is essential to maintain your payments to your priority creditors. Those relevant to you

have been included in your regular monthly expenditure.

The following is a list of what are considered

of non-payment:

priority debts because of the consequences

It is your responsibility to ensure that payments are made towards your priority

debts and any arrangements made to repay arrears are maintained.

*

Bailiffs can seize possessions to the value of the amount you owe plus costs

**

Imprisonment only applies if you wilfully refuse to pay.

Type of debt Consequence of non payment

Mortgage Loss of home

Rent Loss of home

Secured loans Loss of home

Council Tax/Rates Attachment of Earnings

Order/Bailiffs

*/Imprisonment**

Child maintenance Attachment of Earnings

Order/Imprisonment

**

TV Licence Fine/Imprisonment

**

Magistrates Court Fines Bailiffs

*/Imprisonment**

Tax/VAT/National Insurance Attachment of Earnings

Order/Bailiffs

Order/Bankruptcy

County Court Judgments Attachment of Earnings

Order/Bailiffs

Gas/Electricity/Other fuel Prepayment meter/Disconnection

Hire Purchase Loss of goods

Telephone Disconnection

*/Charging*/Charging Order

Dealing with your creditors

If you are not meeting your contractual payments your creditors will follow the collections

process detailed below. If you are sending a reduced payment some creditors will accept

the reduction and not take any further action, however, not all creditors will accept your

offer and may contact you asking for a higher payment. Simply tell them you cannot pay

what you haven't got.

If you have debts in joint names with another party who is not included in your budget, you

should be aware that if you make reduced payments on a joint debt, the other party could

be pursued by the creditor for the remainder of the debt, and can be held liable for the

whole balance. This also means that the creditor can pursue the collections process

(described later in this booklet) against the other party as well as yourself, and the other

party's credit file is likely to be adversely affected.

DO NOT BE PRESSURED INTO PAYING MORE THAN YOU CAN AFFORD.

Default notice

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issue a default notice. This is a legal requirement and allows them to transfer your debt

to a debt collection agency or take court action.

When you are making reduced payments and your account falls into arrears creditors willDo not ignore it.

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not already done so.

You should still be able to negotiate reduced payments with your creditors if you have

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Most creditors are unlikely to take court action if you are making regular payments.

Letters from solicitors

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make an offer of payment with the solicitor, enclosing a copy of your budget and list of

creditors.

Accounts are often passed to a solicitor if court action is to be taken. It is not too late to

Debt collection agencies

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your account to a debt collection agency.

Many creditors do not wish to collect reduced payments and may either sell or transfer

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settlement of the debt in full and even threaten court action.

treat them the same as your creditors by making an offer of payment you can afford and

sending them a copy of your budget and list of creditors.

Letters from debt collection agencies vary. They may be strongly worded, ask forDo not panic. You should

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expensive method of debt collection.

Debts are sometimes but not often collected by door-to-door agents as it is a very

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copy of your budget and list of creditors.

If an agent does call, you can still make a reduced offer of payment and give them a

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them you cannot pay what you haven't got.

If the agent demands a higher offer of payment, treat them like your creditors and tell

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would suit you better than having an agent call.

Ask if you can pay by post, or with a paying-in book at the bank or post office if this

Court action

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previously received a default notice, your creditors can decide to issue a County Court

Claim Form. They can decide to do this whether you are paying them an agreed offer of

payment or not.

If you do not make contractual monthly payments to your creditors, and you have

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make the same offer of payment in reply to the court forms. (For more information on

court procedures, see the 'Court Procedures' in this booklet).

If you are paying the most you can, because that is all you can afford, then you should

Credit reference agencies

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credit file will be adversely affected. This information is held for approximately 6 years,

therefore it is unlikely you will be able to obtain more credit and it may be some time

before your rating will improve.

When you are making reduced payments to your creditors, it is almost certain that your

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have any financial links with this person, e.g. joint mortgage or bank account then your

financial situation may affect their credit rating as well as your own.

You have also indicated that you have an additional adult living in your household. If you

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contact the Information Commissioner's Office and ask for a copy of the "No Credit"

leaflet. Telephone number 0870 600 8100 or visit

To find out more about the type of information credit reference agencies hold you canwww.informationcommissioner.gov.uk

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If you want to obtain a copy of your personal credit file you can contact:

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Dealing with Payment Protection Insurance (PPI)

Payment Protection Insurance (PPI) can pay out a sum of money to cover your monthly

repayments on items such as mortgages, loans and credit cards. It can be claimed if you

are unable to work due to ill health or you have lost your job through no fault of your

own**. It is usually paid by you, either by a lump sum added to your loan at the beginning

of the agreement or as a monthly payment that usually appears on your statement.

If you are offering reduced monthly payments to your unsecured creditors because of

financial difficulties, the following may apply:

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conditions.***

You may be able to make a claim against the PPI if you meet the qualifying

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You may be able to cancel the PPI. (CCCS is unable to do this for you).

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Please be aware that any protection you have will be lost if you choose to cancel the

agreement. If you have any concerns about this please call your PPI provider or you can

contact the Counselling Team.

**Terms and conditions of each PPI provider will vary.

***Qualifying conditions will vary depending on your PPI provider.

Experian

Equifax

Callcredit

The creditor may also cancel the PPI if you fail to make your monthly payment.www.experian.co.uk 0870 241 6212www.myequifax.co.uk 0870 010 0583www.callcredit.plc.uk 0870 060 1414

Court procedures

If you receive any court forms through the post you must

may give your creditors more ways to recover their money from you, for example

deducting money from your income.

never ignore them. If you do it

County Court Judgments

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'Defence'.

When a County Court Claim Form arrives, the pack includes two forms - 'Admission' and

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on the envelope containing the claim form.

You must complete and return one of these within 14 days of the date of the postmark

Ignoring the claim form

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court to enter 'Judgment by Default'.

This is not advisable. If you do not reply to the Claim Form, the creditor can ask the

Admitting the claim

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send it to the address shown on the 'Acknowledgement of Service' in the response pack

(not the court). Make a realistic offer of payment that you can afford.

If you agree that you owe the money, you should complete the 'Admission' form and

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sent an 'Acceptance of Offer' which gives details of how much you have to pay and when.

If your offer is accepted, the creditor will ask the court to make judgment. You will be

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1974, then interest will normally be stopped.

If the total owed is less than £5000 or the debt is regulated by the Consumer Credit Act

Defending the claim

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stating your reason for the dispute and return it to the court. If you need longer than 14

days to prepare your defence, complete the 'Acknowledgement of Service' form and

send it to the court within 14 days; you will then be granted a further 14 days. A court

hearing will be fixed for your local court and

Admitting part of the claim

If you want to dispute the whole claim, you should complete the 'Defence' form, clearlyyou must attend the hearing.

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'Admission' form.

If you dispute only part of the claim, then you should return the 'Defence' form and the

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Changing the amount you pay

A court hearing will be fixed in your local court and you must attend the hearing.

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vary the order, depending on the circumstances:

Once judgment has been made, there are a number of applications that can be made to

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to the court, within 14 days, to explain your circumstances and to ask for a 'Redetermination'

of the amount you have to pay. There is no fee for this.

If the order was not made by a District Judge, but by a court official, you should write

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you received it, you may apply to vary the order using court form N245 - 'Application

to vary an order'. (There is a fee charged but you can apply to have this waived in

cases of hardship using form EX160A). This form must be completed and handed in

along with your application to vary the order. (N245 form).

If the order was made by a District Judge or if more than 14 days have elapsed since

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set aside using an 'N244 Application notice' supported by a financial statement. A fee is

normally payable, which may also be waived in cases of hardship. The court

proceedings will be transferred to your local court, a date will be set for a hearing and

If you cannot afford to make any payment at all, you can apply to have the judgment

you must attend the hearing.

Court and they must be completed and both returned to the court that issued the

original paperwork.

The N244 and EX160A are available from any County

Credit rating

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will affect your ability to obtain future credit, including mortgages.

All County Court Judgments are registered with the credit reference agencies and this

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accountancy, law and other financial services. It is advisable to check with your union or

Personnel/Human Resources Department for the effect on your occupation.

More importantly, it can affect your employment in certain professions, such as

Failing to make payments under a County Court Judgment

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further action by applying for:

If you do not make payments as directed under the judgment, the creditor can take

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removal of goods. You can apply to have the warrant suspended using form N245

A Warrant of Execution, which can result in bailiffs being sent to your home and the

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directly from your wage. This obviously then involves your employer.

An Attachment of Earnings Order, which if successful, means the creditor is paid

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A Charging Order, which if granted, secures the debt against your property.

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Judgment.

Creditors cannot take the above action without firstly obtaining a County Court

Charging Orders

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aware that in some circumstances (particularly if the Judgment is not complied with) the

creditor may also apply to the court for a further order to be made called a 'Charging

Order'. This has the effect of securing the debt against the home or other property. Once

this happens most creditors take no further action provided payments are maintained.

If a creditor obtains a County Court Judgment (CCJ) then property owners need to be

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your house the debt will be repaid with any equity from the sale of the house minus the

cost of the sale.

The remaining debt is then either paid off with monthly payments or if you decide to sell

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but these are rarely granted and only after a full court hearing.

If a creditor is not prepared to wait, they may apply to the court for an 'Order for Sale'

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(currently set at 8% per annum) or to continue to apply the contractual interest.

Creditors do have the right in some circumstances, to apply either statutory interest

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always seek further advice if you receive any court papers.

The process of applying a Charging Order on your property is complicated and you should

IT IS ESSENTIAL THAT YOU DO NOT IGNORE COURT FORMS AND THAT YOU REPLY

TO THE CLAIM FORM MAKING AN OFFER YOU CAN AFFORD. THESE ARE GENERAL

GUIDANCE NOTES ONLY - FURTHER INFORMATION IS AVAILABLE FROM ANY

COUNTY COURT IN A SERIES OF FREE LEAFLETS OR VISIT

gov.uk

www.hmcourtsservice.

 

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creditors. This will be either an Official Receiver or an Insolvency Practitioner.

Dealing With Debt