Seek advice from our dispute resolution solicitors
Sometimes life can deal us a bad hand and bills can mount up, for example if you lose your job, get injured in an accident, or become seriously ill. Other times you might find yourself facing a ‘final demand’ and threats of court action because you have not paid a bill which you have disputed, and the company or their debt collection agency are pursuing it vigorously, rather than acknowledging your complaint.
What can you do if a creditor harasses you?
Examples of harassment include:
- threatening you verbally or physically;
- falsely claiming to be a bailiff;
- using more than one debt collector to pursue you for payment;
- failing to tell you that your debt has been passed on to a debt collection agency;
- hassling you numerous times a day, late at night or early in the morning;
- hounding you on social media;
- pressuring you to sell your home or take out more credit; or
- implying that legal action has been taken against you when it has not.
If you are being harassed, you should establish who is chasing the debt and then collect evidence of the harassment, such as correspondence received, witness statements and records of the number and times of calls or visits, as well as what was said.
Once you have collected the evidence, complain in writing to the creditor who is harassing you to request that they stop. State that harassment is a criminal offence and outline how you wish to be contacted in future. The creditor has eight weeks to respond to you.
If complaining to the creditor does not work, you can complain to the professional body or trade association that the debt collector belongs to. They will have a code of practice outlining how they are supposed to behave towards you. If the creditor’s behaviour has breached this code, the association or body should take action against them. Failing that, you can ask the Financial Ombudsman Service to look into your complaint.
Can your debt be passed to another company?
Your creditor may tire of pursuing the money from you and either engage a debt collection agency to pursue the debt on their behalf or sell it on to a third party. If they do pass on the debt – and most credit agreements contain a clause allowing the creditor to sell your debt whenever they wish – they must let you know in writing, and they are no longer allowed to chase you for the money.
How should you respond to a money claim?
If you do owe someone money, they can apply for a court order requiring you to pay the debt. If they do, you will receive a document outlining the terms of the claim. You need to act within 14 days, otherwise the court might issue a default judgment against you in your absence and you might have to pay more.
If your debt is governed by the Consumer Credit Act – such as a loan, credit card bill, or hire purchase agreement – before the creditor can take court action they must issue you with: a default notice; an arrears notice; and an annual statement for fixed sum credit (a statement which outlines the money you borrowed, the money you have paid, the outstanding amount and any interest owed).
If you receive a money claim, you can pay the full amount, offer a different amount, or defend the claim if you believe you do not owe this money or only owe a fraction of that demanded.
To defend the claim, you should file the appropriate defence form with the court within a certain period of time, explaining why you are defending the claim. This might be because:
- you have already repaid the debt;
- you are in dispute with the supplier (for example, the goods you received were not of satisfactory quality and you want a refund);
- the creditor is asking for the wrong amount;
- the claim should have been issued against someone else;
- it was issued out of time; or
- the creditor did not follow the right procedure (for example, not issuing the notices required under Consumer Credit Act).
The court will usually offer you and the other party mediation to try to resolve the matter without a full court hearing. If mediation fails, you will need to go to court where you can represent yourself or engage a solicitor to speak on your behalf. Your case will be heard in a judge’s room or a county court room if the claim is for less than £10,000. If the claim is for more, the hearing might be more formal.
The judge will usually give their judgment on the day. If the judgment goes against you, you need to repay the debt. If you cannot afford to pay immediately, you can ask the court to vary the judgment or allow you to pay the debt back in instalments. If you do not agree with this judgment, you may be able to appeal, but there are strict rules on whether the court will grant permission to appeal.
What happens if you do not comply with the money judgment?
The creditor can apply to the court to enforce the money judgment. Orders the court can issue include:
- a warrant of control – this empowers a county court bailiff to seize some of your belongings. These will then be sold on to settle your debt, as well as pay for any court costs and fees you might owe.
- a charging order – this involves the court placing a ‘charge’ on your property or your stocks or shares, equivalent to the amount you owe. When you sell the item with a charge over it, your creditor will receive the money you owe them before you receive the remaining proceeds of the sale.
- an attachment of earnings order – this allows money to be deducted from your wages by your employer and sent to the creditor via the court until the debt is paid off.
- a third-party debt order – this sees the court ordering a freeze on money that you might otherwise be entitled to, such as money you have in your bank account. This allows the creditor to recover the money directly from the bank.
Extortionate rates from money lenders
If you have borrowed money from a lender that is not authorised by the Financial Conduct Authority, they may be charging you extortionate interest rates and physically or verbally abusing you to try and retrieve their money.
Such lending practices are against the law: they cannot enforce the high interest rates or legally make you pay the money back. If you are being harassed or threatened by a loan shark you can report them anonymously to an Illegal Money Lending Team.
How a solicitor can help
If you are faced with court over a debt, you should consult a specialist dispute resolution solicitor. They can negotiate with the creditor to reach an agreement that suits all parties, help you gather the evidence you need to defend a claim and prepare your case, provide you with representation and legal advice in court, and help you take action against creditors who are harassing you.
For further information, please contact our dispute resolution team on 01733 882 800 or email [email protected].
Luke Edwards LLB (Hons), Solicitor
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