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Frequently Asked Debt Questions

The following is a collection of frequently asked debt help uk questions ...

• How is my Credit Rating Going to be Effected?  - if you are struggling to repay debt and have started to miss payments, then it is likely that your credit rating will be effected. Creditors will issue a Default Notice against you which will be registered on your credit file to inform other lenders that you have unpaid debts. This will mean that you will probably not be able to borrow more money from any lender who uses credit checking before lending money. This situation will not last for ever. However, your credit file will certainly continue to be effected until you have repaid or settled the debt you owe.

• I am Being Threatened With Court Action – What Can I do? - If you are struggling to repay your debt and a creditor feels that you are not making a reasonable effort to repay, they may ask the local County Court to become involved. The Court will review your circumstances and make a judgement about how much you are able to repay your creditor (normally on a monthly basis). Most creditors will not pursue this action until they believe there is no other way to make arrangement of repayment with you.

• What is a CCJ? - a County Court Judgement (or CCJ) is an order made by the court to enforce payment of an outstanding debt. The CCJ will require either immediate payment of the full outstanding balance or more usually, prescribe a monthly repayment plan. If a CCJ is in place and the debtor sticks to its terms, then the creditor is unable to take any further action to recover the debt directly. In addition, the creditor is legally obliged to freeze further interest or account charges.

• Normally a CCJ is applied for by a creditor as a last resort to try and recover money owed. Events leading to the introduction of a CCJ will normally be as follows:

• Creditor will demand payment of the outstanding debt from the debtor directly. Creditor is at liberty to continue adding interest to the account balance.

• If the debt remains outstanding, the creditor will employ the services of a collecting agent to increase the pressure on the debtor to repay the debt. Creditor is at liberty to continue adding interest to the account balance.

• If the debt still remains outstanding, the creditor may apply to the court for a CCJ to be put in place against the debtor. The court will assess the creditor’s ability to pay and make a judgement as to the terms of the repayment. Once made, the creditor has 30 days to repay the debt in full. If this is not achieved, the CCJ will remain until the debt is repaid in full. As long as the debtor meets the terms of the CCJ, the creditor must cease all additional interest and late payment charges.

• If the debt still remains outstanding, the creditor can request the court to undertake an attachment of earnings. This means that the debtors employer must deduct the amount prescribed by the judgement from the debtors wages to enforce payment.

• Once in place, a CCJ will remain until the debt is repaid. It will be recorded on the individuals credit file for 6 years from the date of the CCJ being issued. This will make it increasingly difficult for the individual to obtain further unsecured or secured credit during this time.   Learn more about CCJ's in detail.

 

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