What can creditors do if I don't pay?

Creditors of priority debts have different powers of recovery depending on the debt. Many will need a court hearing before taking action. It is very important that you speak to a debt adviser if you have any priority debts.

Once you miss a payment to a debt, the creditor should contact you and tell you that you are in arrears. If you cannot make an arrangement to clear the arrears they may pass the debt to a debt collection agency or apply for a County Court Judgement.

Debt Collection Agencies (DCA)

A DCA has no more power than the original creditor. They cannot come to your house and take anything from you. A DCA works on behalf of the original creditor. If you feel they are acting inappropriately you should complain to the DCA and the creditor.

If a DCA contacts you, you should deal with them in the same way as the original creditor. Send them a copy of your completed budget sheet along with a letter explaining the situation and making an offer of payment (if you can afford one). If possible you should communicate with them in writing only and keep a record of all correspondence.

County Court Judgments (CCJ )

If reasonable steps have been taken to collect a debt, creditors can apply for a County Court Judgment (CCJ). From the 1st October 2017 creditors must follow The Pre-Action Protocol for Debt Claims before taking court action. If you get a CCJ, the court will assess your situation and tell you how much you have to pay.

A CCJ is a paper based process. You will not normally have to attend a hearing. You will need to complete the paperwork that is sent to you, and provide information as required. You may want to attend the hearing if you dispute the debt.

You will receive a claim form through the post from the court. You have 14 days to respond to this form. Seek debt advice if you need assistance.

When you respond your options include:

• Admit that you owe the debt and make a repayment offer based on your income and expenditure. This offer should take into account any other debts you have.
• Dispute that you owe all or part of the debt. If you want to challenge a debt you will need legal advice because an unsuccessful dispute can lead to an increased debt.
• Ask for an additional 14 days to respond while you gather evidence or seek advice about disputing the debt.

If you do not respond to the claim form in 14 days you will receive a ‘judgement in default’. This means the court decides how much you should pay. This could mean all of the debt, plus costs, are due immediately.

If you do not reply to the claim form or you do not pay what the court has ordered, you will default on the CCJ. This allows the creditor to use enforcement options. In Northern Ireland, the County Court makes a judgement (decides that you owe the money) and then the creditor needs to apply to have this enforced. Enforcement of Judgements Office deals with all enforcement action in Northern Ireland. There are no bailiffs in Northern Ireland.

Attachment of Earnings

If you are working, the creditor can apply for an Attachment of Earning. This allows money to be taken directly from your wages at a rate set by the court.

Third party Debt Order

If you are owed money by a third party, the creditor can apply for a third party debt order. This orders the third party to pay the money directly to the creditor.

Charging Orders

If you own your property the creditor can apply for a Charging Order. This will secure the debt against your home, or other valuable assets you own. A Charging Order is different to the other enforcement options because the creditor can apply for one even if you are up to date with the payments ordered by the court.

If you are threatened with any court enforcement, it is important that you seek immediate debt advice. There are usually steps you can take to deal with the situation, but you need to act as quickly as possible.

If you cannot afford to pay the amount the court has set, you can apply to ‘vary’ the CCJ. A variation of a judgment will get the court to look at your circumstances again and set a new order if appropriate.