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Creditor takes you to court for debt

About you are taken to court for debt

If you owe money and don't pay it back, the people you owe money to may eventually take you to court. This is called making a claim.

The people you owe money to are called creditors. If one of your creditors takes you to court, it's really important not to ignore the situation and to know what action you can take in response.

If you take action quickly, you can avoid the situation getting worse. If you don't take action, you could end up with a bigger debt, or even losing your home or your possessions. You could end up having to pay back money which you don't really have to.

This page explains what happens when you are taken to court for debts like bank and building society loans or credit card debts and loans from other companies. These cases are usually dealt with by a county court. If an order is granted against you, it's called a county court judgment, or CCJ. Getting a CCJ may affect your credit rating.

You can find out what forms you'll get from the court, how to fill them in and what you can do if you don't agree you owe the money or if aren't able to pay it back.

This page does not tell you what happens if you are taken to court for rent or mortgage arrears.

To find out about rent or mortgage arrears, see Rent arrears and Mortgage problems.

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What a creditor should do before starting court action

Before taking you to court, someone you owe money to ( called a creditor) must send you a warning letter. The letter should tell you that unless you pay back what you owe, they will start legal action within a certain amount of time.

Depending on the type of debt, the letter will either be a default notice or a letter before action.

You will get a default notice if the money you owe is a credit debt, such as a personal loan or credit card debt.

When court action is started, you will get a claim form. If you haven't got a warning letter before you get this claim form or the letter doesn't contain the right details, the court action might not be able to go ahead.

If you don't get a warning letter before court action is started or you want help to check the details, you can get advice from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Both you and your creditor have a duty to try and sort out the case without going to court. If you get a default notice or a letter before action, you should make every effort to reach an agreement with your creditor to pay back what you owe.

For more information about how to reach an agreement with your creditors, see How to deal with your creditors.

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What to do when you get a claim form from the court

When a creditor starts court action, you'll get a number of documents from the court. These are a claim form and a response pack.

The claim form gives details of how much your creditor is claiming you owe them. The response pack contains a number of forms. Some of the forms are for you to say whether you accept you owe the money. If you don't agree you owe the money, there's also a form you need to send back to confirm you got the documents.

It's very important not to ignore these documents. You should read the notes which come with the response pack carefully and deal with the documents by the deadline given. If you don't deal with these documents, a court order can be made against you. If this happens, you'll have to pay back all the money your creditor is claiming, even if you don't owe it. You may also have to pay interest and extra costs on top of this.

About the claim form

The claim form gives brief details of how much your creditor is claiming you owe them. This will include any interest they want to claim.

Check it's a real court form. It should have:

  • a claim number which you should quote on any letter or document you send to the court
  • the court's official stamp. If the claim form isn't stamped, it's probably not a real court form.

If the court's official stamp isn't on the claim form, the person you owe money to might be trying to get you to pay them back by pretending to send you court papers. This could count as harassment by your creditor and might be against the law. You should get advice about what to do.

There will be more details about your creditor's claim on a document called the particulars of claim. Usually these are sent with the claim form but they can be sent separately. If they are sent separately, it must be within 14 days of the claim form.

For more information about how to tell if a creditor is harassing you and what you can do about it, see Harassment by creditors.

About the response pack

The response pack contains the following forms:

  • an admission form to use if you accept you do owe the money
  • a defence form to use if you want to say you don't owe the money
  • an acknowledgment of service to use to confirm that you got the documents. You only need to send this form back if you don't agree you owe the money.

You must do one of the following within 14 days of the particulars of claim being sent:

  • return the defence form to the court together with the acknowledgment of service
  • return the acknowledgment of service only, if you need extra time to fill in the defence form. This will give you an extra 14 days to return the defence form, but you must do this within 28 days of the particulars of claim being sent
  • return the admission form to your creditor
  • return both the admission and defence form to the court if you accept you owe some of the money being claimed but not all of it.

You may want to contact your creditor to try and reach an agreement about paying back the debt without going to court. This might be cheaper for you. If you do this, you will still need to meet the 14 day deadline for sending back the court documents, unless you can get your creditor to extend the deadline. If your creditor does agree to extend the deadline, make sure you get this in writing and let the court know.

You may need help to decide what to do. If you've got other debts as well, it's a good idea to get advice about all of your debts in one go.

You can get help to reply to court forms and to sort out your debts from an adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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If you agree you owe the money

If you agree that you owe all the money shown in the claim form, fill in the admission form in the response pack. The form asks for details of your financial situation.

Send the form back to your creditor, not to the court. You should also keep a copy and send it recorded delivery to prove you sent the form in case it gets lost.

Making an offer to pay instalments

You can use the admission form to ask to pay off the debt in instalments. You can say how much you want to pay in each instalment and when you want to pay them. It's always best to offer something. A small offer, even as low as £1, is better than offering nothing at all.

For more information about how to work out what you can afford to pay your creditors, see How to deal with your creditors and How to work out your budget.

If your creditor accepts your repayment offer

If your creditor is happy with the offer you've made, they can ask the court to make the order without a court hearing or the involvement of a judge. The court will enter a County Court Judgment in the Register of Judgments.

For more information on Register of Judgments, see How county court judgments affect your credit rating [Adobe Acrobat Document 41 KB].

The order will be based on the amount you've agreed. The court will stamp the order to show it's official and then send it to you. The order will tell you:

  • how much to pay
  • when to make payments
  • the address where you have to send the money.

Don’t send money to the court.

You should keep your own record of payments you make in case there’s an argument between you and your creditor in the future.

You should send your payments to your creditor at least four clear working days before the date they are due to allow for any delays.

If your creditor doesn’t accept your repayment offer

If your creditor doesn’t accept your payment offer, a court official or a judge will decide what's fair. There isn't usually a court hearing. If there isn't a hearing and you're not happy with the decision that's made, you can ask for it to be looked at again (re-determined).

You must make your request to the court in writing within 14 days. If the claim was issued in another court, it can be automatically transferred to your nearest court for the hearing. You don't have to pay a fee for this.

You can get help to ask the court for a re-determination of a court order from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

If you are getting help, make sure you tell the advice agency that there's an urgent time limit for you to act. This will help the advice agency to get you help quickly.

If you don't make an offer of repayment on the form

If you don't make any repayment offer at all on the admission form, your creditor will decide how much and when you should pay. Or they may decide to act as if you never returned the admission form and ask for an order that you pay the whole amount immediately.

If you're in this situation, you should get advice from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Most court orders will be entered in the Register of Judgments, Fines and Orders. This could make it difficult for you to get credit in the future.

For more information about the effect that an entry in the Register of Judgments, Fines and Orders will have on your future credit rating, see How county court judgments affect your credit rating [Adobe Acrobat Document 41 KB].

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What if you only owe some of the money

You may accept that you owe some money to your creditor but disagree with how much. For example, you may disagree with the way that your creditor has calculated interest on the claim.

If you don't agree you owe all the money, fill in both:

Send the forms, to the court, not to your creditor. Keep copies and send them recorded delivery.

The court will tell you what steps you must take about the part of the claim that you don't agree with. There may be a hearing, which you should go to.

You may need to make arrangements for paying the part of the debt that you do agree with. You can ask to pay by instalments.

If the court agrees that you only owe some of the money, a court order will be made for that part. It will be entered in the Register of Judgments, Fines and Orders. This could make it difficult for you to get credit in the future.

For more information about the effect that an entry in the Register of Judgments, Fines and Orders will have on your future credit rating, see How county court judgments affect your credit rating [Adobe Acrobat Document 41 KB].

You can get help to fill in the admission and defence forms, from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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If you don’t agree you owe the money

If you don't agree you owe the money being claimed by your creditor, you will need to fill out the defence form, giving your reasons. This is called defending the claim.

You must have good legal reasons for defending the claim. You can't defend a claim for any of the following reasons:

  • because you can’t afford to pay the money
  • if you forgot that you had the debt
  • if you never opened the letters your creditor sent you.

Good reasons for defending a claim may include:

  • you can prove that you have already paid the money that your creditor says you owe
  • you're not the person who is named on the claim form
  • you're not the person who signed the agreement to take out the loan
  • your creditor didn't follow the proper procedures when they lent you the money. For example, they may have got you to sign an agreement which had something wrong on it or not given you the right documents
  • you were under age when you signed the agreement
  • you borrowed the money a long time ago and the time limit for recovering it has run out. For example, a creditor only has six years to take court action to recover a credit debt. The six year limit starts from the date of your last payment or when you last acknowledged you had the debt.

If you think you've got good legal reasons for defending the claim, it's important to act quickly to give yourself as much time as possible to put your case together. You should:

  • send back the acknowledgement of service in the response pack. This will buy you 14 extra days to return your defence
  • get advice from a specialist debt adviser before filling in the defence form.

To find out more about whether you might have a good legal reason for defending the claim, see How to dispute a debt.

You can get help to check you have a proper defence and to fill in the defence form, from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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What if you ignore the claim form

If you don’t reply to the claim form within 14 days, your creditor can ask the court for an order to be made against you. This is called entering judgment by default. It means that you won’t have an opportunity to put your case to the court and your creditor can start to take more serious action straightaway. However, in some circumstances it may be possible to apply to have the judgment changed or set aside at a later date.

Your creditor can decide what the order should say about how and when you have to pay back the money. You usually have 14 days to pay, although the order could say it has to be paid immediately (forthwith).

The court will send you the order. It will tell you:

  • how much to pay
  • when to pay
  • the address where you have to send the money.

Don’t send the money to the court.

Once the court order has been made, it's entered in the Register of Judgments, Orders and Fines. This may make it difficult for you to get credit in the future.

To find out more about getting a court order changed or set aside, see Changing a court order for debt.

To find out more about the affect of a court order on your future credit rating, see How county court judgments affect your credit rating [Adobe Acrobat Document 41 KB].

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How much interest can the creditor claim

As well as the original money you owed, your creditor can claim interest on the debt. This will be charged up to the date when the court order is made. The details of how much interest is being claimed should be shown on the claim form.

In some cases, a creditor can claim interest after the date of the court order. If your creditor does this, it's a good idea to check with a specialist adviser that the creditor is acting correctly. Creditors sometimes claim interest after judgment when they shouldn't.

You can get help to check whether your creditor is entitled to the interest they're claiming from an experienced adviser, for example, at a Citizens Advice Bureau. To search for your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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What if you still don’t pay

If your creditor gets a court order against you, you have to pay up when the order tells you to. If you don’t pay up as ordered, your creditor has a number of other options to make you pay. This is called enforcement action.

Your creditor will need another court order to take enforcement action. They may be able to get an order to:

  • send bailiffs to your home to take your things away
  • have money taken from your wages to pay the debt. This is called an attachment of earnings order
  • take money that you are owed by someone else from your bank account. This is called a third party debt order
  • secure the debt against your home or other property you own. This is called a charging order and means that you could lose your home if you don't keep up the repayments.

For more information about the enforcement action your creditor could take to get their money back, see Action your creditor can take.

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Further help

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