1. Enforcement notices, credit ratings & reports
INFORMATION FOR ADVISERS

2. CONTENTS Default Notices Claim Forms County Court Judgments
Charging Orders
N244 & N245
Credit Rating
Credit Reports

3. DEFAULT NOTICE
A Default Notice must be issued by the creditor before legal action can start
Must give the client 14 days to remedy the situation
If it is requesting payment, it must contain a statement about Time Orders and seeking advice
If client doesn’t comply, the Creditor can terminate the agreement AND demand early repayment of the FULL outstanding money due under the agreement
Stays on the credit file for 6 years from date the default is registered
Creditor has to issue a “Letter Before Claim” before they can start court action
Claim process starts…………

4. LETTER OF CLAIM
A new Debt Protocol which must be used by a creditor before they start court action
Doesn’t apply to “government debts” such as c/tax and council parking tickets
Must say:
Amount owed
If interest and charges are being added
Details of the written agreement (it’s date and who the parties were)
If the debt has been sold the letter should state when and to whom
If the client is making payments, or has offered payments, the letter should explain why a court claim is being considered
Reply form & address to reply to.
30 days to respond to the form – if no response a Claim Form will be issued

5. Asking a clientquestions on what to do with the claim form
When did they get the claim form?
Explain that it’s important they respond to it?
Do they acknowledge the debt or are they disputing it?
Complete the relevant forms and send off

6. Claim forms Client response time is 14 days from date of service
Response time is 19 days if claim form is from Business Centre
Client needs to respond to claim form within allowed time otherwise the Court can decide on what is affordable in a County Court Judgment (CCJ)
Date of service is 2 days after postmark – allow 14 days from date of service.
If claim form is from Business centre, there is a 19 day response time.
All days count, not just business days
Filing a Defence – this is to be filed back to the Court
This is where the client disputes the debt – claims they don’t owe the money at all or the debt has already been repaid
The client may have a claim against the creditor and so can use this form to make a counterclaim.
N9A Admission form – this is sent to the Creditor
This is where the client admits they owe the whole of the debt. It allows the client to admit the debt and make an offer to repay. The client needs to complete an I&E which needs to be included with the response
Acknowledgement of Service
Needs to be filed back to the Court when the client is unable to file a defence within the time period or wants to dispute the jurisdiction of the Court – so the debt in under a Consumer Credit Agreement but has been filed in the High Court instead of the County Court for example.
Once the Acknowledgement of Service has been filed the client needs to file their defence within 28 days of the service of the claim form

7. How to respond to a claim form
Date of service is 2 days after postmark
Filing a Defence – this is to be filed back to the court
This is where the client disputes the debt – claims they don’t owe the money at all or the debt has already been repaid
The client may have a claim against the creditor and so can use this form to make a counterclaim.
N9A Admission form – this is sent to the creditor
This is where the client admits they owe the whole of the debt. It allows the client to admit the debt and make an offer to repay. The client needs to complete an I&E which needs to be included with the response
Acknowledgement of service
Needs to be filed back to the Court when the client is unable to file a defence within the time period or when they want to dispute the jurisdiction
Once the Acknowledgement of Service has been filed client needs to file their defence within 28 days of the service of the claim form

8. County court judgements
Judgement in Acceptance
Client has made an offer and the creditor has accepted
Judgement in Default
Client hasn’t responded within time and the court has set the payment (possibly as Forthwith)
Judgment after Determination
Creditor has rejected the offer, so the court sets a payment
It will stay on the credit file from the date of the judgement for 6 years
Refer to handouts
Judgment in Acceptance
Where the client has made an offer and the creditor has accepted the payment offer – usually a monthly repayment offer
Judgment in Default
Where the client hasn’t responded to the claim form, so the Court has set the repayment amount – can be set as Forthwith payment which means the full balance is to be repaid usually within 8 days.
Judgment After Determination
Where the creditor has rejected the offer the client has made and so the Court has set a payment which the client needs to repay.

9. Charging orders CCJ granted before 1 October 2012
Charging Order can only be granted if the client has defaulted on the payments to the CCJ
CCJ granted after 1 October 2012
Charging Order can be granted even if the client is up to date with CCJ payment
Objecting against the Order
The client needs to apply to the Court at least 7 days before the hearing and serve on the creditor the reasons for their objection
Advise other creditors that one specific creditor is seeking a Charging Order, as this means this one creditor is wanting to be treat more beneficially
A client cannot object to a Charging Order on the basis that the house is in negative equity
The Charge is against the client’s share of equity – so in jointly owned property it would only apply to the client’s beneficial interest
What happens when I receive a charging order?
The lender will apply to the court for a charging order, once the court has considered the application and is satisfied with the application, you will receive the order on a N86 form.
The form will include information regarding the time and date of the hearing when the judge will decide if to make a final charging order.(Its is always very important that you attend a court hearing, also this is advised that you take with you a copy of your income and expenditure, this would confirm your payment)
If the judgment is put in place, you will receive a N87 form (Final Charging Order), this form will also be sent to the lender. The lender will then need to inform the Land Registry of the order
Anyone with a connection to the property will be informed about the Charging Order – this includes joint mortgagees, mortgage provider, secured loan provider etc
Will I be forced to sell my house or land?
You are not under any obligation to sell your property once the final charging order is in place, however, there are some extreme circumstances where a lender can apply to a court for force of sale. This is, however, rare and the court would have to agree to the application before such an order would be served, but if you do not comply with the terms of the order and cause problems, then there is a greater risk that the creditor will ask the court for permission to sell the property forcibly.
The charge would sit on the house, with a monthly payment being paid (if agreed through the courts, you should request in writing that all interest would be frozen and that there would be no force of sale) this would slowly chip away at the debt.
Or the debt can sit on the house until client leaves, the charging order would always be the final payment, after, mortgage and any other secured loans.

10. Charging orders Objecting against the Order
The client needs to apply to the Court at least 7 days before the hearing and serve on the creditor the reasons for their objection
Advise other creditors that one specific creditor is seeking a Charging Order, as this means this one creditor is wanting to be treat more beneficially
A client cannot object to a Charging Order on the basis that the house is in negative equity
The Charge is against the client’s share of equity – so in jointly owned property it would only apply to the client’s beneficial interest

11. Charging orders What happens when I receive a charging order?
The lender will apply to the court for a charging order, once the court has considered the application and is satisfied with the application, you will receive the order on a N86 form.
The form will include information regarding the time and date of the hearing when the judge will decide if to make a final charging order.(Its is always very important that you attend a court hearing, also this is advised that you take with you a copy of your income and expenditure, this would confirm your payment)
If the judgment is put in place, you will receive a N87 form (Final Charging Order), this form will also be sent to the lender. The lender will then need to inform the Land Registry of the order
Anyone with a connection to the property will be informed about the Charging Order – this includes joint mortgagees, mortgage provider, secured loan provider etc.

12. Charging orders Charging Order is in two parts – Interim and Final
It’s a court order that turns an unsecured debt into a secured debt and secures a debt to a property (not only residential, but also BTL)
Means the property can’t be sold without clearing the debt in full
Can result in the property being forcibly sold if client doesn’t comply with the terms of the Charging Order
Always advise the client to attend court for the Final Charging Order hearing
If the client want to raise an objection against the Final charge being made this must be filed at Court at least 7 days before the hearing

13. 7 steps – charging order process
1. Creditor applies to Court to request an Interim Charging Order on form N379
2. Court grants the Interim and sends client the Interim Order on form N86 which includes details of the date and time of the Final Charging Order hearing, plus a copy of form N379
3. Creditor applies to Land Registry to register a “Notice” – a warning that an application is about to be made for a Final Charging Order
4. Land Registry send a copy of this “Notice” to the client (and any other parties with an interest in the property) as soon as it is received
5. At the Final Charging Order hearing, the District Judge decides whether the Charge should be granted
6. The client should ask for specific conditions to be attached to the Order to prevent it being used as an order for sale in certain circumstances – e.g. till the youngest child finishes full time education
7. Final Charging Order is granted and normally sits on property till client re-mortgages or sells

14. Charging order risks
The court can ask for payments to be made to the Charging Order whilst it’s in place – usually a nominal payment
If a client refuses to pay an instalment which has been ordered, the creditor is entitled to seek an Order for Sale providing the debt is in excess of £1000
A client can ask for a clause to be added into the Charge which states the property cannot be sold for example until the youngest child reaches 18 years.
This must to be done at the time of the final charging order hearing
An Order for Sale can only be granted where the amount owed is more than £1000

15. n244 N244 is a Notice of Application
Used to request something from the Court:
Transfer of Court
Emergency Hearing
Set Aside a Judgement
Fee – £50 or £255
(Fee is £255 (unless it’s for a Re-Determination, when it’s free but must be done within 14 days of the Judgment service date) but this depends on what the N244 is required for. Setting aside a Judgment would be £255)
Exemption from fees on Form EX160
Fee is £255 (unless it’s for a Re-Determination, when it’s free but must be done within 14 days of the Judgment service date) but this depends on what the N244 is required for
Setting aside a Judgment would be £255

16. n245
Application to vary a payment on a CCJ when the payments are unaffordable or to suspend a Warrant of Control
Needs to be accompanied by a completed financial statement
Fee £50
Fee can be waivered if client on low income, by completing EX160

17. Impact on credit rating
Impact occurs as soon as payments are late/missed
Default Notice requires the debtor to bring an account up to date
Defaults are recorded on a credit file for 6 years
What debt solutions are recorded on a credit report?
There are 3 main credit agencies
Experian
Equifax
Call Credit
Experian credit report.
Defaults
A default must be served before a creditor can take court action to recover money owed under an agreement. A default shows as an 8 on the credit report
What debt solutions are recorded on a credit report?
IVA’s and Bankruptcy/DRO are recorded on a credit file. Credit rating is impacted for 6 years from the date the IVA, Bankruptcy or DRO was approved.
There will be a DMP marker visible to creditors which isn’t visible to you and I
1 – means that that the full contractual payment was not paid on time for the first time
2 – means that for the 2nd time, the full contractual payment was not made on time
3 – for the 3rd time, the full contractual payment was not made on time, and so on.
What will the credit report show?
Details of when you were registered on the electoral roll
Aliases you may also have been known as
Financial Associations – details of anyone you have a financial link to – joint bank accounts, joint mortgage applications etc
Public Record Information – details of any County Court Judgments, IVA, Bankruptcy, DRO
Credit Account Information – details of loans, credit cards etc
Credit Account Information with Account Management Details – additional information on how a client has managed their account – so if it’s been handed to a collection company
Previous Searches – names of organisations who has made a search using some or all of the information within the last 12 months.
Financial Associate Searches – when your credit report information has been seen because someone you are financially associated with has made an application for credit or an unrecorded enquiry search has been carried out
Linked addresses – addresses that you have been linked to
CIFAS – UK Fraud Prevention Service. 3 reasons why you could see an entry here (i) you’ve taken out CIFAS Protective Registration, (ii) organisation has done so on your behalf because they have lost data about you, (iii) you have been a victim of fraud
GAIN – Gone Away Information Network. Shows information re a debt which is outstanding where the client has moved away without giving a forwarding address
Notice of Correction – An entry made which corrects information wrongly held about someone
Useful Addresses – addresses for lenders appearing on the credit report

18. Credit reference agency contacts
Experian
Equifax
Call Credit

19. Credit rating You can never be “blacklisted”
Defaults remain for 6 years
CCJ’s stay on the credit file for 6 years from the Judgment date
IVA’s stay on for 6 years from the date of approval. If the IVA lasts longer than 6 years it stays on till the IVA ends
Bankruptcy/DRO Restriction Order will remain showing until the restriction comes to an end – which could be up to 15 years
Blacklisting – there is no such thing as a black list.
Information held by Credit agencies is only factual information about a person’s credit history
Credit ref agencies DO NOT make judgement or recommendations to lenders or credit providers

20. How long does it last?
It lasts until all the included debts have been repaid
If the Judge grants a Composition Order the repayments will only need to be made for 3 years
The Admin Order is recorded on the credit file for 6 years from the date the Order was made
Also added to the Register of Judgments, Orders & Fines for 6 years from the date the Order was made