potential for CCJ

melysion

So am just starting out with a DMP and am wondering - what are the chances of a creditor refusing to accept the payment and going down the CCJ route. If I am made bankrupt, take out a IVA or have a CCJ made against me I will lose my job so am very concerned about any of the three happening. Of course if I lose my job, no one will get a dime but I can't imagine that stopping some people ....

sourcrates

Hi,
Happens next to never.

The original creditor will never normally take legal action on a normal common o garden consumer debt, unless its for a large amount of money.

The normal process goes like this, if you miss a payment, they will normally write to you, telling you so, and giving you x amount of time to pay up, if you dont, the account goes to collections, a different dept within the same company.

They will attempt to recover whats owed for around 60 days, if they have no luck, then after a few weeks/months the account will either be passed to a DCA for collection, or it will be sold to a DCA for collection.

if sold, the DCA becomes the new creditor, and the process starts over again, if the debt has a realistic chance of been recovered, and you dont respond to them, then they may go to court, they may not, depends what will bring them the most profit.

If the account is just passed to a DCA then the original creditor retains full rights, and they just attempt collection on there behalf.

There is no simple yes or no answer to your question, but unless you owe a lot of money, its used as more of a threat, than a reality.

melysion

£14k is a lot of money wouldn't you say ....

sourcrates

melysion wrote: »

£14k is a lot of money wouldn't you say ....

Yes it is, but i am assuming that is spread around a few different creditors ?
They wont take what you owe as a whole into account, only specific amounts.
As long as you are paying something toward the debts, you wont have anything to worry about.

melysion

No that £14k is just for one creditor (by far my biggest one) - its a loan from Lloyds bank

melysion

I owe about £20k altogether

National_Debtline

Hi

If you’re using a reputable, free DMP provider the payments the court would set may be similar to the pro-rata DMP instalments the creditor receives anyway. In that case there may not be much value in court action unless the creditor particularly wanted to get a charging order if you own a property, or the chance to use other enforcement if you don’t pay.

Prior to court action a creditor should try to seek an arrangement, which you’re already doing with your DMP.

If you do receive a county court claim there is the option to request a Tomlin Order instead, which is a formal agreement which wouldn’t be registered as a full CCJ providing you maintain the agreed payments.

James
@natdebtline

melysion

Hmm. None of this is particularly comforting (particularly as I do own property) but there you go. If thetes a possibility of something being a ansolutely horrinle nightmare chances are thats exactly what happens to me (I just know the whole process is going to be as rough for me as it can be). Thanks for the replies in any case. Much appreciated. Think I might crawl under a stone for a bit now though

sourcrates

melysion wrote: »

No that £14k is just for one creditor (by far my biggest one) - its a loan from Lloyds bank

Ok, well then yes, there is a potential for legal action, but as i said, as long as you are honest with the creditor, and are paying what you can afford, then all should be well.

Look at it like this, if they know how much you have available for debt repayment, and that's the amount they are receiving, then why would they go to the trouble and expense of legal action, if they wont be any better off at the end of it !!!

In the end its down to common sense, its all about money to them, all they will look at is the figures, for example, if they thought they could get more money out of you by going down the legal route, then they probebley would do that, as long as your honest about your income/expenditure, it gives them no more ammunition.

National_Debtline

Unfortunately there are no guarantees, but I agree with sourcrates' line of thinking. I mentioned the Tomlin Order as they can be particularly useful when someone has a career which could be affected by a CCJ.

James
@natdebtline

sourcrates

I owed 54k at my lowest point, biggest creditor was for 19 grand.

In the two years prior to sorting out my IVA all i got were letters and phone calls, there were threats of legal action, but it never materialized.

Infact the Bank concerned were really helpful.