Are you worried about bailiffs? If you have problem debts, seeing programs like Can’t pay? We’ll take it away can be alarming. As one reader said:
If I stop my direct debit and don’t pay them this month surely they will not be happy? I don’t want bailiffs around my house.
If you have already had a letter from a bailiff read: Bailiffs – do you have to let them in? What you need to know.
This article looks at what you can do BEFORE a debt is sent to the bailiffs, to make sure it never gets there.
This particular reader had a payday loan, but you may have the same thoughts about other types of “consumer debts” such as loans, overdrafts, credit cards, catalogues, mobile debts. Bailiffs aren’t just unpleasant to deal with, they can add hundreds of pounds of extra fees on top of your debt.
The good news: creditors will go through a lot of steps before sending a debt to a bailiff – and these take a long while.
Even better: you can stop any chance of bailiff action at each one of these steps!
This article looks at:
- what a lender does when you don’t pay a debt, all the stages this goes through, and
- how to make sure a bailiff never knocks on your door because of a consumer debt. (Other debts such as council tax arrears have different procedures, see below.)
When does a debt go to bailiffs?
To you not being able to pay a debt is a major event – but to a lender it’s something that happens all the time. Hundreds of thousands of people have arrangements with a creditor because they can’t afford the normal payments.
Obviously, lenders don’t like this, but it’s part of their business. They will have a procedure to go through and that procedure will not say “let’s send in the bailiffs as soon as possible.” That is the last thing they will do, it only happens if everything else hasn’t worked.
The following steps are typical:
Step 1 Requests for payment
First, you will normally get a simple reminder that you haven’t made a monthly payment. How a lender contacts you (letter, email, text, phone call) varies.
The next contacts are likely to ask you to pay the amount you have missed or to get in touch if you have problems. They may suggest if you contact them you can make an arrangement to pay. At some point, they will usually suggest you may want to take free debt advice.
- offer what you can afford to pay. Getting this agreed will stop the contacts and stop the creditor moving on to the next steps. You have taken control of the situation long before there is any chance of bailiffs!
- if you aren’t sure what you can afford, you can’t pay anything, the creditor says you need to pay more or you have several debts then talking to a debt adviser such as StepChange is usually a good move. This can also help if you can’t face talking to the creditor.
Step 2 Debt sent “to collections” or a debt collector
It may sound worrying if you are told your debt is being passed “to collections” or you get a letter from a debt collection agency. The letters may start to sound less friendly, talking about court action, bailiffs, saying they may send someone round to your house. Mentioning these things doesn’t mean they are about to happen!
Debt collection agencies don’t have any special legal powers, they aren’t bailiffs. Usually, they have no intention of sending anyone to your house – it costs them money and you probably won’t be in… If they do, then this person has no legal power to do anything at all.
You may get more phone calls, but if these are becoming excessive read Are you getting too many calls about debts?
After a while, your debt may sold to a debt collector. This changes who your creditor is, but nothing else.
Good options for you are the same as Step 1:
- if you don’t recognise the debt, send them a Prove It! letter. It is easier to sort a problem out at this stage than in court.
- making an offer that is accepted stops the process going any further.
- if there are reasons why it has been hard to talk to the creditor so far, it may seem scary but it’s good to tell the creditor/debt collector about these, whether it’s because you have mental health problems, or you have been trying to cope with difficult circumstances;
- your problem has been going on for a while, so talking to a debt advisor can really help.
Step 3 Warning about court action
If debt collection doesn’t seem to be working, you may get a clear letter stating that court action will be taken within a certain time unless you contact them and come to an arrangement to pay. This letter often comes from a firm of solicitors and is headed something like Letter Before Action or Letter before Claim.
- this is your last chance to reach an agreement without filling in court forms. Reaching an agreement at this point means no CCJ on your credit record and no chance of bailiffs. You may only be able to afford £5 a month, but the creditor may still accept that;
- don’t ignore these letters. If you don’t think you owe the money, you are unsure what to offer, or if you can’t pay anything at all, talk to a debt adviser. You may have a good defence if you are taken to court, so find out! See How to reply to a letter before Action for details.
Step 4 Go to court for a CCJ
You will know the creditor has started the process of getting a CCJ when you receive a Claim Form. For more about what you should do, read What to do if you get a Claim Form.
If you ignore this form you will get a CCJ without there being a court hearing, often saying you have to pay the full amount immediately. So:
- if you think you shouldn’t get a CCJ (the debt isn’t yours, it’s too old, you have already paid it etc) you have to defend the case;
- if you can’t pay it in full, you can make an offer to pay an affordable amount,
Contact National Debtline. They can talk about possible defences, what happens if there is a court hearing, what a good offer of a monthly payment would be for you etc
Step 5 Paying a CCJ
You will be sent a letter headed Judgment for Claimant. This will either say you have to pay the whole amount or it will say what the monthly payments have to be – £50 a month say.
If you make these payments, bailiffs will never be involved.
If you can’t, you need to ask for the payments to be reduced so you can afford them. See National Debtline’s fact sheet on Varying payments on a judgment. If you need any help with that, for example you aren’t sure if you need to complete an N244 or N245 form, talk to National Debtline.
You can do this again later if your situation changes and you can’t pay as much.
Step 6 Send debt to bailiffs
If you don’t keep up with the court set payments, the creditor can apply to the court to send the debt to bailiffs to be collected. You will then get a letter from the bailiff that has been appointed.
Even at this point, it is possible to stop bailiffs coming to your house by applying to the court to suspend the warrant. See Do you have to open the door to a bailiff? which looks at what happens when a debt is sent to a bailiff and your rights if this happens.
Key points to remember about bailiffs and consumer debt
The points to remember about debts such as loans, credit cards and overdrafts are:
- Creditors and debt collectors prefer to reach an agreement with you rather than go to court.
- Bailiffs can’t collect consumer debts until a creditor has gone to court and got a CCJ.
- If the CCJ said to pay the whole amount, you can get the court to change this to a monthly amount you can afford.
- If you pay the monthly amounts the court sets, bailiffs can’t be used.
Bailiffs and other types of debt
This article has looked at “consumer debt”, where you borrowed money you can’t repay. Bailiffs are also used to collect other types of debt such as Council tax arrears; Magistrates Court Fines; Parking penalties issued by a local council; and tax debts (Income tax, VAT and National Insurance).
There are different legal procedures for these debts and they can be much faster to end up with bailiffs than the consumer debts this article has covered. The bailiff powers can also be different. With any of these debts, it’s good to take debt advice straight away. Your local Citizens Advice is a good place for help, especially for council tax arrears where they will be familiar with negotiating with your local council.