Replying to a county court claim form

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Introduction

From April 26 1999 there have been significant changes to the County Court and High Court procedures and all the fees have gone up. If your creditor takes you to court then you need to follow the procedures below. If you have a Mortgage or Rent Possession claim against you look at our information pack 'Dealing with your Debts' or phone us on 0800 074 6918 for advice.

This factsheet outlines the following:

1. What if my Creditor takes Court action?
2. If you agree you owe the debt
3. Joint debts
4. What happens next?
5. If you disagree with what the Creditor says you owe
6. Reducing payments on Court orders
7. Fees
8. Enforcement of County Court Judgments
9. Information Order
10. Attachment of earnings
11. Charging order
12. Bailiffs
13. Third party debt order
14. County Court Fees

What if my Creditor takes Court action?

• Many people are frightened of courts, especially when they feel guilty because they owe money. The County Court is not there to judge anyone guilty or innocent, but to settle disputes about money owed, and how to repay it. The court is not there to serve the interests of the creditors alone.
• If court action is taken, you will not usually have to go to a court hearing. Most of the procedure is done through the post.
• You will receive a "Claim Form" from the court (this used to be called a Default Summons). This will come through the post and tell you how much the creditor says you owe.
• The claim form will usually include details of the debt known as the "Particulars of Claim" but the creditor can send this separately within 14 days.

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If you agree you owe the debt

• There will be a Reply Form with the Claim Form for you to make your offer of repayment. This is called the "Admission Form" or N9a. There are instructions included on how to fill in the form. It looks quite like a Personal Budget Sheet and asks for similar information on income and essential outgoings. See the sample form at the end of the factsheet.
• There is a section you can fill in to include the payments you make on your priority debts. This is section 8 on the form. You also have space to include any other court judgments you may have. This is section 9 on the form. You can list all your credit debtsas well.This is section 10 on the form.

It is important to make an offer of payment on the form. This is Section 11 on theform. If you leave it blank the court will decide you have not made an offer. They will tell you to pay the whole debt at once "forthwith", or order you to pay the monthly payments the creditor asks for. If you don't pay what the court has ordered the creditor can enforce the County Court Judgment in a variety of ways.

• Fill in the form and send it back to the creditor (called the "claimant") at the "address for service" not the court.

It is very important that you send the form to the "address for service" at the bottom of Page 2 of the Claim Form. This might be a solicitor's address rather than the actual creditor.

• There is a time limit of 16 days from the date of the postmark to send back the form. If you don't send it back the court will give judgment against you and order you to pay the whole debt in one lump sum immediately or "forthwith". It is a good idea to send the form recorded delivery and keep a copy.

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Joint Debts

If your debt is in joint names your creditor may send out separate Claim Forms to you and the other person who is liable for the debt. You will both need to fill in separate Reply Forms and make sure you put an offer of payment in the OFFER OF PAYMENT box on each form. This issection 11 on the form. If you leave one form blank, or only send back one Reply Form, the other person may get a judgment telling them to pay the debt in one lump sum. If you have worked out offers of payment to creditors put half of the offer on each Reply Form and enclose a full personal budget sheet and list of creditors. Explain what you have done in Section 11 on each form.

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What happens next?

• If the creditor accepts your offer you will receive a County Court Judgment from the court, telling you to pay in monthly instalments. You should send your payments to the creditor not the court. Keep a record of what you have paid and when.
• If the creditor does not accept your offer the court will decide (or "determine") what you should pay each month.
• If you owe under £50,000 the court staff will usually decide what you should pay without a hearing, although they can ask a District Judge to make a decision if they feel the issues are complicated. If you owe over £50,000 the District Judge decides either by looking at the papers or at a hearing in your local County Court.
• If you cannot afford what the court has decided you should pay, you can apply to the court to look at your offer again. This is called a "Re-determination". There is no fee for doing this. You must do this within 14 days of getting the Order. You can do this by simply writing a letter to the County Court. Quote your case number. Attach your personal budget sheet and explain why you disagree with the order the court has made.
• The "Re-determination" will be done by a District Judge. Where an order was made by the court staff, the District Judge can decide to have a hearing or make a decision by looking at the papers. You can ask for a hearing when you write to the court to ask them to look at your case again.
• If a District Judge made the original order without a hearing then the "Re-determination" of your offer must be decided at a hearing.
• If there is a hearing, the case will automatically be transferred to your local County Court so you can attend. The court will give you a hearing date. You must go the hearing which should be in the District Judge's rooms (in private). Take a copy of your Personal Budget Sheet.

WARNING: If a District Judge made the first order on how much you should pay at a hearing you cannot apply for a "Re-determination" but must apply for the monthly payments to be reduced or "varied". See "Reducing Payments on Court Orders" below.

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If you disagree with what the Creditor says you owe

If you don't agree with the amount of the debt they say you owe then you must either:

• Fill in the Defence Form. In this case send the form back to the court within 16 days.

or

• Fill in the "Acknowledgement of Service" form and tick the box to say you wish to defend all of the claim. Send the form back to the court within 16 days. This gives you another 14 days after that to complete your Defence Form and return it to the court.

• If you agree you owe only part of the debt, then you have to fill in both the Admission Form and the Defence Form and send them to the court.

Putting in a defence or counterclaim is complicated. Phone us for advice.

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Reducing payments on Court Orders

The monthly payments you have been ordered to make can be reduced if your circumstances change or if you can't afford them. You can apply for a reduction using form N245 which you can get from the local County Court Office. There is a fee to pay.

If you want to reduce the instalments you are paying to the court, Money Advice Direct have a detailed factsheet "Reducing payments or suspending a bailiffs warrant on a County Court Judgment". Phone us on 0800 074 6918 for a copy.

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Fees

There will usually be a fee to pay with your application. If you are on a low income or certain benefits you may not have to pay the fee. See the section on fees at the end of this factsheet.

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Enforcement of County Court Judgements (CCJs)

If you do not pay what has been ordered by the court on your judgment then the creditor can attempt to enforce payment through the court in the following ways.

It is important to realise that the creditor cannot enforce the judgment against you if you are up to date with the payments ordered by the court.

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Information Order

Before using enforcement action a creditor may ask you to go to court for an interview about your income, outgoings and any assets you have, such as your house. This is called an "Information Order". This can happen at any time and not just when you miss a payment. The interview consists of a set of standard questions and you may be asked to bring things like your pay slips and credit agreements to the interview. It is very important that you go to the interview or tell the court if you cannot go. The court can actually send you to prison for not co-operating with the process so you must act if sent an interview date. If you want further help on Information Orders phone us for advice.

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Attachment of Earnings

The creditor can only apply for an Attachment of Earnings Order if you are employed. This means that the court can order your employer to deduct an amount from your wages every month to pay back your debt. The creditor has to make an application to the court and you will be sent a form to fill in and return to the court outlining your income and outgoings. The court then sets the amount that will be taken from your wages. You can ask the court to suspend an Attachment of Earnings Order if your job will be affected. We have a factsheet called "Attachment of Earnings in the County Court". Phone us for advice.

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Charging Order

This is a way in which the creditor can ask the court to put a charge on your home which basically "secures" the debt, so it must be paid off when the house is sold. Some creditors will ask the court to make a judgment for you to pay the debt back immediately or "forthwith" so that they can ask for a Charging Order to be made as soon as you don't pay. It is getting more common for the court to agree this even where you have made an offer to pay in instalments by replying to the County Court Claim. If this happens to you phone us for advice immediately. You may be able to get the court to change its mind by asking for a redetermination within 14 days of getting the Order. Alternatively you can ask to pay in instalments by putting in a County Court form called an N245 application.

A Charging Order application is a two stage process and there must be a hearing in front of a District Judge before it is made final. Having a Final Charging Order does not mean you will lose your home. A further application has to be made asking the court to order a sale of your home. It is unusual for the court to agree a creditor's application to be allowed to sell your home. We have a factsheet on "Charging Orders in the County Court." Phone us for advice.

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Bailiffs

The creditor can ask the County Court bailiffs to call at your home with the aim of taking your goods. It is very important to know that bailiffs do not have the right to come into your home unless you have let them in before. Do not let them in. It is usually straightforward to get a bailiffs warrant suspended using a County Court form called an N245. We have a factsheet called "Suspending a Warrant/Reducing Instalments on a County Court Judgment". Phone us for advice.

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Third Party Debt Order

This is a way in which your creditor can instruct someone who owes you money to pay the creditor instead. The most likely way a Third Party Debt Order would be used is where your creditor finds out you have savings in the bank and wants your bank to pay your savings to the creditor. It is a fairly unusual procedure and involves a court order freezing the account and a hearing in front of the District Judge. If your creditor is threatening to use this procedure phone us for advice.

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County Court Fees

DO I HAVE TO PAY A FEE FOR AN APPLICATION IN THE COUNTY COURT?
There will usually be a fee to pay with your application. You can ask the court not to pay the fee in some circumstances. The form you will need to fill in is called an EX160 'Application for a fee exemption or remission.' This form needs to go to the court with your main application. If the court agrees your application you will not have to pay the fee. If you pay a fee when you should have been exempt or would have qualified for a remission, then you have six months to apply to the court for a refund.

EXEMPTIONS
If you are on income support or income-based jobseeker's allowance (JSA) you can ask the court for exemption from the fee. You need to give the court proof that you are getting the benefit. You will be exempt if you or your partner are on the guarantee credit element of pension credit.

If you are on working tax credit you will be exempt from the court fee in these circumstances:

if you are also on child tax credit,

or

you receive the disability or severe disability element in your working tax credit,

and in either case

your gross annual income taken into account for working tax credit is £15,460 or less (from 6 April 2006).

You will need to show the court your tax credit award notice to qualify.

If you do not qualify under these rules for an exemption then you can ask for the fee to be remitted or waived by the court. See below.

REMISSIONS
Ask the court for the fee to be remitted (or waived) if it will cause you what the court calls " undue financial hardship". You can use the same EX160 application form. You may be on a low income or a benefit that does not automatically exempt you from paying the fee. Give as much information about your circumstances as you can. Explain your financial situation on the application form and any exceptional circumstances that apply in your case. The court can remit all or part of the fee depending on what they decide you can afford.

Remember: You can always Phone us for advice about any difficulty you are having in dealing with your debts

0800 074 6918

© Copyright National Debtline 1994 (updated May 2006)