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Going to Court

When debts are brought to court

If you have taken out a Bad Credit Loan, a Debt Consolidation Loan, or any form of unsecured credit and have began to miss payments for at least two to three months, your creditor(s) can file a lawsuit against you for the full payment of the total amount that you owe. Even if you have been a good payer over the years and met your payments on time every month, the creditors can still demand that you pay the full amount that you owe them if you continue to miss payments.

How do you know you’re being sued?

  • Papers from County or Magistrates Court will be sent to you or someone that represents you, i.e. a solicitor or Debt Advisor.
  • You will receive a court summons. It is a paper informing you that someone has filed a lawsuit against you, indicating also the number of days that you are given to respond counting on the day that you have received the complaint.
  • You will receive a copy of the complaint. It’s a statement that is written based on the point of view of the creditor.
  • The court will set a schedule for both of you and your creditor to meet in court.
  • The judge will raise a question on whether you borrowed the money or not, and whether you have enough funds for you to get out of debt.
  • Unless you present a proof that you don’t really owe any amount from the creditor, the latter would win the judgment.

How do you respond?

  • An answer to the summons must be filed as soon as possible. This is a defense to the complaints filed against you in which you can attach counterclaims. A fee will be charged for this once you file an answer. You will need debt help options from this point. Speak to your debt advisor as soon as possible.
  • In your response you may plead your case. You must have a suitable explanation why you cannot afford to repay the debt or else it will not be honored by the court.

What if I don’t answer to the case?

  • In any case that you did not answer or ignore the debt problem, the creditor takes the judgment by default; meaning they will take the amount that was indicated from you by force, i.e. with the use of Bailiffs.
  • Normally, you won’t be sent a copy of the judgment; however, you may request for a copy from the courthouse of the county as stated in the court papers.  

Claims below £5,000

Claims with financial value not exceeding to £5,000 are allotted to “small claims” court. The court can adopt any methodology of proceedings in a hearing that is considered fair. Characteristics of such proceedings are as follows:

  • The hearings are not formal, and so the rigid set of law of evidence is not applicable.   
  • The court do not need bring the evidence to take oath.
  • There may be limited cross-examinations.
  • Decisions must be based on reasons.
  • There may be no need for expert evidence to be given except when the court permits to.
  • Solicitor’s costs may not be recovered.

Claims below £15,000

Claims that have financial value not exceeding to £15,000 are allotted to the track of “fast claims.” The provision also includes that a trial will be held not exceeding to one day. When allocating cases to the fast track claims, the court could direct the management on the case to plot a timetable on the actions to be done from the time the direction is given until the day of the trial. In giving directions, the court will either fix the date of the trial period within thirty weeks, including the place of the hearing. The costs to be recovered in this type of track are sternly limited.

Claims above £15,000

The multi-claim track is a usual track for almost all claims that do not apply to small and fast claims. The court is responsible in managing the cases in multi-track. In addition, the court must set a fixed trial date, the trial period, and the place of the hearing, in the earliest possible time.

Does it have to go this far?

If it has got to this stage and you have began to miss payments, the best thing to do is seek good debt help and advice from the UK Debt Advisor to try and negotiate on your behalf. The UK Debt Advisor will asses your current income and outgoings and how much you owe in total, then provide a suitable solution. On acceptance of this solution, whether it be an IVA, Debt Management Plan, Trust Deed or Bankruptcy, the UK Debt Advisor will then approach the courts or your creditors with a proposal. The creditors will then make a decision based upon your case. Remember; all the creditors want is their money back. If you are fair with them 9 times out of 10 they will be fair with you.