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1 Dealing with Debt
7. Loan and credit problems
Loans that aren't secured on your home (like a mortgage for example), overdrafts, credit cards and mail order agreements are often known as 'non-priority' debts. You generally have to deal with these debts by coming to an arrangement with the creditor to pay an amount you can afford. If you can't come to an affordable arrangement, the creditor may claim their money through the court. The court can then order you to make payments at a rate you can afford, after looking at your income and outgoings (expenses). As long as you can keep up with payments as ordered by the court, the creditor cannot take enforcement action (such as using bailiffs) against you.
If you get a time order, the missed payments will still be listed on your credit reference file, so you may have trouble getting credit in the future.
If you want to apply for a time order, you must first write to the creditor explaining how much you think you can afford to pay and over what period. If the creditor refuses your offer, you can apply to the county court for the time order, and it will decide whether your offer is reasonable.
Alternatively, you can simply go ahead and pay the creditor what you've offered. If it doesn't think that you're paying enough, it has the option of making a claim through the courts. You can apply for a time order at this point. An advantage of this route is that you don't have to pay the court fee.
This leaflet is published by the Legal Services Commission (LSC). It was written in association with Birmingham Settlement.
The leaflets are regularly updated but the law may have changed since they were printed so the information in them may be incorrect or out of date.
Leaflet Version: April 2019
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CLS Legal Info Leaflets
(Legal Information Leaflets)