A Statutory Demand is a formal request for payment and it gives the debtor 21 days warning to pay the debt. After 21 days it can be followed by a bankruptcy petition.
A Stat Demand can be served as soon as the debt is due and does not require a County Court Judgment (CCJ) to be issued first and it can be served without any court involvement. It can be fairly easy for the debtor to get the Stat Demand “set aside” if there is any dispute the court will halt the bankruptcy. This can result in an order for costs being made against the petitioning creditor.
The majority of Stat Demands that are issued are done so for “scare tactics” thus being because the average debtor will normally be so scared having received on they will pay up. If a bankruptcy petition does not follow the 21 days notice then this would become apparent.
It is very easy for the creditor to issue a Stat Demand, a simple form to complete and the papers can be served by recorded post. There is no need for personal delivery or a solicitor to be involved.
Receiving a Stat Demand can be very scary – especially if the debtor has assets such as a house or their reputation / job would be at risk if they were made bankrupt. There are ways that the risk of bankruptcy can be reduced such as:-
· The debt is reduced below £750
· The debtor offers to make payments to clear the debt by instalment
· The debtor applies to have the Statutory Demand set aside
It is recommended that advice be sought if a Statutory Demand is received, every ones circumstances differ. This explanation is for information purposes only.
Friday, 21 August 2009
Thursday, 20 August 2009
JARGON BUSTING - INTERIM ORDER / CHARGING ORDER
A Charging Order is another approach that a creditor can take in order to make the debtor repay a debt. Generally this is done when a creditor has issued a CCJ and it is a way to enforce the CCJ should it not be paid in full or if any of the agreed instalments are missed. A Charging Order gives the creditor security of the debt. Once the Charging Order has been granted the debt becomes “secured” on the debtors’ house / land in the same way a mortgage or secured loan is.
The first step of a Charging Order is an Interim Order, this can be issued to the debtor without a hearing, normally it outlines the date for the Charging Order hearing (21 days notice must be given) which will be heard in front of a District Judge. As a precaution a copy of the Interim Order will also be sent Land Registry and this will be noted – this makes it impossible for the property to be sold. The Land Registry will also inform the debtor in writing that an Interim Order has been made.
If the debtor objects to the Interim / Charging Order then it is imperative that they send their written objections along with any evidence to the petitioning creditor at least 7 days prior to the hearing. It is also good practice for a copy of this to be sent to the court and the petitioning creditor’s solicitor (all should be sent by registered post).
At the Charging Order hearing the District Judge will decide whether to make a permanent charge on the property – he will take into account evidence / objections from both sides. It is imperative that the debtor attends the hearing as if they do not it is more likely that the Charging Order will be granted. If the hearing is not at a local court then the debtor can apply for it to be transferred to a local court – the form to complete is N244 and there is a fee.
The District Judge must consider whether it is reasonable to make a charging order. Under the Charging Orders Act 1979 they have to consider all of the circumstances of the case such as the personal circumstances of the debtor and whether if the Charging Order was granted it would be “unduly prejudiced” – this means that if the Charging Order was granted there would be a disadvantage to other creditors that the debtor may have.
If the property is in joint names but the debt is in a sole name – the other owner of the property has the opportunity to explain why they do not feel that the Charging Order should be granted. Some of these objections could include: who has paid for the deposit or who has made the mortgage payments. All of these are valid points but must be sent to the court, petitioning creditor and petitioning creditor’s solicitor at least 7 days prior to the hearing.
If the Charging Order is granted it is very rare for a court to allow a creditor to sell the property. The majority of creditors are happy to wait for the home to be sold at some point in the future. If the creditor requests that the property is sold there must be another hearing, again the District Judge would decide using objections / arguments from both sides whether to grant this or not. As before it is vital that the debtor files their objections at least 7 days prior to the hearing and attends the hearing.
Receiving an Interim Order / Charging Order can be a very worrying time, but it is crucial that the debtor acts fast and receives professional advice.
The first step of a Charging Order is an Interim Order, this can be issued to the debtor without a hearing, normally it outlines the date for the Charging Order hearing (21 days notice must be given) which will be heard in front of a District Judge. As a precaution a copy of the Interim Order will also be sent Land Registry and this will be noted – this makes it impossible for the property to be sold. The Land Registry will also inform the debtor in writing that an Interim Order has been made.
If the debtor objects to the Interim / Charging Order then it is imperative that they send their written objections along with any evidence to the petitioning creditor at least 7 days prior to the hearing. It is also good practice for a copy of this to be sent to the court and the petitioning creditor’s solicitor (all should be sent by registered post).
At the Charging Order hearing the District Judge will decide whether to make a permanent charge on the property – he will take into account evidence / objections from both sides. It is imperative that the debtor attends the hearing as if they do not it is more likely that the Charging Order will be granted. If the hearing is not at a local court then the debtor can apply for it to be transferred to a local court – the form to complete is N244 and there is a fee.
The District Judge must consider whether it is reasonable to make a charging order. Under the Charging Orders Act 1979 they have to consider all of the circumstances of the case such as the personal circumstances of the debtor and whether if the Charging Order was granted it would be “unduly prejudiced” – this means that if the Charging Order was granted there would be a disadvantage to other creditors that the debtor may have.
If the property is in joint names but the debt is in a sole name – the other owner of the property has the opportunity to explain why they do not feel that the Charging Order should be granted. Some of these objections could include: who has paid for the deposit or who has made the mortgage payments. All of these are valid points but must be sent to the court, petitioning creditor and petitioning creditor’s solicitor at least 7 days prior to the hearing.
If the Charging Order is granted it is very rare for a court to allow a creditor to sell the property. The majority of creditors are happy to wait for the home to be sold at some point in the future. If the creditor requests that the property is sold there must be another hearing, again the District Judge would decide using objections / arguments from both sides whether to grant this or not. As before it is vital that the debtor files their objections at least 7 days prior to the hearing and attends the hearing.
Receiving an Interim Order / Charging Order can be a very worrying time, but it is crucial that the debtor acts fast and receives professional advice.
JARGON BUSTING - PERSONAL GUARANTEES (PGs)
With the uncertain economic climate many companies are requesting a Personal Guarantee (PG) against many credit accounts / leases etc. Once this is signed it means that the director of the Limited Company is no longer protected against debts if their company fails. Signing a Personal Guarantee (PG) can be very, very risky – especially if the director has assets such as a house.
Companies offering credit are feeling the pinch at the moment, a Personal Guarantee further ensures that they will not be out of pocket should the Limited Company fail. If a director signs a Personal Guarantee and their business diminishes then the company will pursue the matter through the court to fulfil the debt. There are various routes that they can go down such as a charging order, interim order or bankruptcy.
Prior to signing any agreements you need to seek professional advice, this is to ensure that you are protected. We see many people who have unwittingly signed agreements with Personal Guarantees (PG) – once the agreement has been signed there is not much that can be done about it. It is imperative that advice is sought prior to signing.
If you need assistance with any agreements or if you have a Personal Guarantee which is currently being enforced then do not hesitate to contact me
Companies offering credit are feeling the pinch at the moment, a Personal Guarantee further ensures that they will not be out of pocket should the Limited Company fail. If a director signs a Personal Guarantee and their business diminishes then the company will pursue the matter through the court to fulfil the debt. There are various routes that they can go down such as a charging order, interim order or bankruptcy.
Prior to signing any agreements you need to seek professional advice, this is to ensure that you are protected. We see many people who have unwittingly signed agreements with Personal Guarantees (PG) – once the agreement has been signed there is not much that can be done about it. It is imperative that advice is sought prior to signing.
If you need assistance with any agreements or if you have a Personal Guarantee which is currently being enforced then do not hesitate to contact me
0800 4 96 95 94 or EMAIL
JARGON BUSTING - County Court Judgments (CCJs)
A County Court Judgement (more commonly known as CCJ) can be entered against you if you owe any sum of money. The person you owe money to (claimant) will contact the court or complete a “moneyclaim” online – once they have done this (there is a fee involved) a claim form will be sent out to the person who owes money (defendant) – it is imperative that this form is completed as soon as it is received. There are three options available on the claim form:-
1) Accept the full debt
2) Dispute all of the debt
3) Dispute part of the debt
The forms can be completed by hand or online by logging onto Moneyclaim – there will be a specific password on your claim form which you will need to enter along with the claim number. Generally you have 14 days from the date of issue to respond (although it is possible to ask for 28 days by just completing the Acknowledgment of Service form if time is needed to prepare a defence).
The next steps are dependent on whether the debt is accepted or disputed. The steps are as follows:-
Accept the full debt
a) Pay the debt in full within 30 days
If the amount is paid direct to the “claimant” at this point then a “CCJ” will never be issued and this will have no effect on the “defendants” credit file. If the amount is not paid the “claimant” can then apply for judgment to be issued. Again if this is paid within 30 days then the CCJ will / can be removed and a certificate of satisfaction will be received. There is generally a small fee for this.
b) Pay the debt in full after 30 days
If the debt is paid in full after the 30 days then this will stay on the “defendants” credit file BUT they can request that the court marks it as “satisfied” – again there is a small fee for this and the “defendant” will receive a certificate of satisfaction.
c) Request to pay by instalments
If the Judgment has been ordered to be paid in full and the “defendant” cannot do this then they can apply for a Varied Order (form N245) – once completed this form gives an overview of the “defendants” financial position. It includes information such as income and expenditure, other debts and court fines etc. There is a section to make the offer of payment. The Varied Order is returned to the court who in turn send it the “claimant” for approval. If the “claimant” accepts the offer then the “defendant” will receive confirmation of this including the date the instalment should be paid and where the payment should be sent to. If the “claimant” declines the offer of payment the court will then look into the information that the “defendant” provided and then decide how much should be paid. At this point if the court decides an amount that the “defendant” does not feel able to pay they can ask the court to reconsider their decision but this must be done within sixteen days of the postmark of the Varied Order.
Dispute all of the debt / Dispute part of the debt
If the “defendant” disputes part or all of the debt the court will request that they attend a hearing. It is imperative at this point that the “defendant” fully prepares all of the evidence they have to enforce their reason for disputing the debt. Both the “claimant” and “defendant” should attend this hearing.
The Judge will then decide at this point, based on evidence provided what part of the debt will be payable. The steps will then be the same as above i.e. paying in full or paying by instalments
If nothing is done with regards to the CCJ then the “claimant” can request for a Warrant of Execution to be issued (please see separate section of this for full explanation).
The CCJ will be registered on the Register of Judgments, Orders and Fines and the majority of entries stay on the register for six full years. Organisations such as credit companies, bank & building societies use the information on the Register to decide whether to offer accounts or not. Having a CCJ can make it very difficult to obtain credit.
The Registered Trust is the place to check whether a Judgment has been issued against you or not. Generally there is a small cost to do this but it can be done online at or you can telephone them on 020 7380 0133. The information available is:-
· The amount and date of judgment
· The claim number
· The name of the court where judgment was issued
It can also be worthwhile checking your credit file. It is against the law for a company to check your personal credit file without your permission but this can easily be done online.
Limited Companies are different and anybody can check their credit file – it is public information. This is worthwhile thinking about if you wish to offer credit to any Limited Company (see separate section for information on how to do this).
Wednesday, 19 August 2009
JARGON BUSTING.......WALKING POSSESSION AGREEMENT
If a bailiff enters a property using peaceful entry he will normally list goods and these form a Walking Possession Agreement, the goods that have been noted now legally belong to the bailiff and can be removed at any time. The bailiff will allow these goods to remain in the property and you can continue to have use of these providing that you keep to your side of the agreement i.e. you make the agreed payments.
On some occasions a bailiff may list items that he has seen through the window or letterbox, this does not constitute a valid Walking Possession Agreement and under no circumstances if you have had one of these pushed through your door to sign should you! If a bailiff is allowed entry then it is worth remembering that once they have gained peaceful entry (let in, though an unlocked door / window) then they can come back at any point and gain entry without your knowledge / agreement.
As a rule goods sold at public auction will normally sell for around 10% of their original value. This means if you owe £100 – then the bailiff will probably try to seize goods to the value of at least £10,000.
A bailiff must only seize goods that belong to the debtor. In practice the majority of bailiffs will attempt to seize any goods to the value of the debt – it would then be up to the individual who owns the property to prove ownership afterwards.
If you have any problems with bailiffs or debts then please do not hesitate to contact me for an informal chat.
On some occasions a bailiff may list items that he has seen through the window or letterbox, this does not constitute a valid Walking Possession Agreement and under no circumstances if you have had one of these pushed through your door to sign should you! If a bailiff is allowed entry then it is worth remembering that once they have gained peaceful entry (let in, though an unlocked door / window) then they can come back at any point and gain entry without your knowledge / agreement.
As a rule goods sold at public auction will normally sell for around 10% of their original value. This means if you owe £100 – then the bailiff will probably try to seize goods to the value of at least £10,000.
A bailiff must only seize goods that belong to the debtor. In practice the majority of bailiffs will attempt to seize any goods to the value of the debt – it would then be up to the individual who owns the property to prove ownership afterwards.
If you have any problems with bailiffs or debts then please do not hesitate to contact me for an informal chat.
0800 4 96 95 94 or EMAIL
JARGON BUSTING.......WARRANT OF EXECUTION
Once a Judgement has been issued against the debtor the creditor can apply for a Warrant of Execution at any point if the debt is between £50 and £5,000 (in Scotland between £600-£5,000). If the debt is over £5,000 then the High Court would enforce the debt in the same way but this is known as a Writ of FiFa.
The Warrant of Execution will be calculated by the amount of the judgment; plus the court fees and if granted, the creditor’s costs. Statutory interest cannot be sought of judgement debts of less than £5,000.
Once the Warrant of Execution has been issued the court will transfer the judgement to the debtor’s local County Court, in turn they will write to the debtor informing them of the Warrant of Execution. This letter gives the debtor 7 days to pay the amount of the Warrant in full without further action. If the debtor pays within this time frame then the Warrant of Execution is cancelled and the monies are paid to the creditor.
During the 7 day period the debtor may apply for the Warrant of Execution to be suspended. This application must state a valid reason (i.e. offer to pay the judgment by instalments). The court would then notify the creditor of the application to suspend the Warrant. If the creditor contests the application the court will list the application for a hearing. The court would then decide whether to uphold the application to suspend or whether the Warrant of Execution still stands. (The debtor has to pay a fee to the court to apply to suspend the Warrant of Execution).
If the debtor fails to pay or apply for the Warrant of Execution to be suspended, the bailiff will usually within 15 working days visit the debtor at their home address. They will attempt to identify items which can be sold to recover the debt. Certain items are unable to be taken and the County Court Bailiff has to follow strict guidelines as to how they can take the goods. They are not allowed to break into any property – entry must be via a “peaceable” method such as unlocked door, window. If the bailiff is let into the property by a bailiff he can take payment there and then or may take an inventory of goods. This is known as a “walking possession order”. This means that if payment is not made the bailiff may / will revisit and take the goods. At this point the bailiff is allowed to break into the property if he has entered the property “peacefully” before.
A Warrant of Execution lasts for a period of one year from the date of issue. If the creditor wishes to extend the Warrants life beyond one year they must supply the court with sufficient reasons for this to be granted and unless there are exceptional circumstances this should be done prior to the Warrant of Execution expiring. There is a fee to extend the Warrant of Execution.
If you have any queries about Warrants of Execution or would like an informal chat please do not hesitate to contact me:-
The Warrant of Execution will be calculated by the amount of the judgment; plus the court fees and if granted, the creditor’s costs. Statutory interest cannot be sought of judgement debts of less than £5,000.
Once the Warrant of Execution has been issued the court will transfer the judgement to the debtor’s local County Court, in turn they will write to the debtor informing them of the Warrant of Execution. This letter gives the debtor 7 days to pay the amount of the Warrant in full without further action. If the debtor pays within this time frame then the Warrant of Execution is cancelled and the monies are paid to the creditor.
During the 7 day period the debtor may apply for the Warrant of Execution to be suspended. This application must state a valid reason (i.e. offer to pay the judgment by instalments). The court would then notify the creditor of the application to suspend the Warrant. If the creditor contests the application the court will list the application for a hearing. The court would then decide whether to uphold the application to suspend or whether the Warrant of Execution still stands. (The debtor has to pay a fee to the court to apply to suspend the Warrant of Execution).
If the debtor fails to pay or apply for the Warrant of Execution to be suspended, the bailiff will usually within 15 working days visit the debtor at their home address. They will attempt to identify items which can be sold to recover the debt. Certain items are unable to be taken and the County Court Bailiff has to follow strict guidelines as to how they can take the goods. They are not allowed to break into any property – entry must be via a “peaceable” method such as unlocked door, window. If the bailiff is let into the property by a bailiff he can take payment there and then or may take an inventory of goods. This is known as a “walking possession order”. This means that if payment is not made the bailiff may / will revisit and take the goods. At this point the bailiff is allowed to break into the property if he has entered the property “peacefully” before.
A Warrant of Execution lasts for a period of one year from the date of issue. If the creditor wishes to extend the Warrants life beyond one year they must supply the court with sufficient reasons for this to be granted and unless there are exceptional circumstances this should be done prior to the Warrant of Execution expiring. There is a fee to extend the Warrant of Execution.
If you have any queries about Warrants of Execution or would like an informal chat please do not hesitate to contact me:-
0800 4 96 95 94 or EMAIL
JARGON BUSTING.........WRIT OF FIFA!
Writ of FiFa is derived from the Latin term “fiery facias” and forms part of the law of execution; this is another solution after a judgment has been issued. A Writ of FiFa is the High Court equivalent of a Warrant of Execution, but unlike a Warrant of Execution it does not require any notice to be given. County Courts do not have the authority to issue these Writs. It is an order to the authorised High Court Enforcement Officer to seize assets and sell the possessions of the debtor to enforce the money judgement whether that be commercial or residential premises.
The minimum amount a Writ of FiFa can be issued for is £600. Court Fees and Statutory Interest may also be added to the original Judgement once the Writ of FiFa has been issued.
Once a Judgement has been issued and remains unsatisfied a Writ of FiFa may be issued without notice to the debtor, once the petitioning creditor has paid a fee.
A High Court Enforcement Officer is allowed to enter premises to levy execution. However, as with all bailiffs they are not entitled to enter domestic premises where they are denied permission to enter BUT the High Court Enforcement Officer is allowed to enter by “peaceable” means – through open windows, unlocked doors etc. Commercial premises are different and they are allowed to gain entry (peaceable or not) as long as the residential property is not connected i.e. multi-use (pubs etc). Upon lawful entry into the premises any internal doors, cupboards or windows may be broken in order to execute the Writ.
On the rare occasion that entry is unlawful, the sale of goods collected IS lawful and therefore will be sole to execute the judgement. The High Court Enforcement Officer would / could be pursued by the debtor for trespass.
If you would like further information about Writs of FiFa then please do not hesitate to get in touch for an informal chat.
The minimum amount a Writ of FiFa can be issued for is £600. Court Fees and Statutory Interest may also be added to the original Judgement once the Writ of FiFa has been issued.
Once a Judgement has been issued and remains unsatisfied a Writ of FiFa may be issued without notice to the debtor, once the petitioning creditor has paid a fee.
A High Court Enforcement Officer is allowed to enter premises to levy execution. However, as with all bailiffs they are not entitled to enter domestic premises where they are denied permission to enter BUT the High Court Enforcement Officer is allowed to enter by “peaceable” means – through open windows, unlocked doors etc. Commercial premises are different and they are allowed to gain entry (peaceable or not) as long as the residential property is not connected i.e. multi-use (pubs etc). Upon lawful entry into the premises any internal doors, cupboards or windows may be broken in order to execute the Writ.
On the rare occasion that entry is unlawful, the sale of goods collected IS lawful and therefore will be sole to execute the judgement. The High Court Enforcement Officer would / could be pursued by the debtor for trespass.
If you would like further information about Writs of FiFa then please do not hesitate to get in touch for an informal chat.
0800 4 96 95 94 or EMAIL
EFFECTIVE DEBT COLLECTION.......
Many companies may offer debt collection services, how do you know who to choose and in the end who will be most effective at getting your money? If you have tried every available avenue yourself then why would another company sending a letter work any better?
Ok, sometimes it does – sometimes people may be frightened when they receive a letter from a third party but this is a very small percentage.
You need to decide what action you are prepared to take. Effective debt collection will cost you; this is not fees but court costs. There are lots of routes you can go down to collect a debt BUT you need to ensure that you follow the correct procedures before each step.
For example, if the debt is owed to you by a Limited Company you can issue a Winding-Up Petition if the debt is over £750 – this in effect means that if the company doesn’t pay or doesn’t offer you an acceptable amount / instalment then the company will be “wound up”.
If the debt is owed to you by a Sole-Trader / Individual then you can get a Stat Demand issued for bankruptcy – this can be very effective if the debtor owns their own property. If they do own their own property then another option would be a “charging Order” on their property.
As with everything there are pro’s and con’s – especially with the bankruptcy route – if the debtor doesn’t own any assets then you are not likely to see your money and may be a blessing in disguise for them as it will not only wipe out your debt but other as well.
If you are owed monies then it is best to get advice. We offer free informal advice therefore if you wish to discuss anything then please get in touch:-
Ok, sometimes it does – sometimes people may be frightened when they receive a letter from a third party but this is a very small percentage.
You need to decide what action you are prepared to take. Effective debt collection will cost you; this is not fees but court costs. There are lots of routes you can go down to collect a debt BUT you need to ensure that you follow the correct procedures before each step.
For example, if the debt is owed to you by a Limited Company you can issue a Winding-Up Petition if the debt is over £750 – this in effect means that if the company doesn’t pay or doesn’t offer you an acceptable amount / instalment then the company will be “wound up”.
If the debt is owed to you by a Sole-Trader / Individual then you can get a Stat Demand issued for bankruptcy – this can be very effective if the debtor owns their own property. If they do own their own property then another option would be a “charging Order” on their property.
As with everything there are pro’s and con’s – especially with the bankruptcy route – if the debtor doesn’t own any assets then you are not likely to see your money and may be a blessing in disguise for them as it will not only wipe out your debt but other as well.
If you are owed monies then it is best to get advice. We offer free informal advice therefore if you wish to discuss anything then please get in touch:-
0800 4 96 95 94 or EMAIL
Tuesday, 18 August 2009
TENABLE BUSINESS SUPPORT NOW INCLUDES FREE COMPANY CREDIT CHECKS.......
We recently sent questionnaires to our members asking what we could do to improve our service. A number of people responded and said that they would like the membership to include credit checks - so we've done exactly that! Our membership now includes 5 credit checks per month. This makes Tenable Business Support even better value for money.
The Credit Checks are thorough and can be done on any UK Limited company. Although we cannot tell you who to give credit to and who not to we can advise how they run the company so far - if their accounts are up to date, if they have any CCJ's but more importantly we look at the directors. Are they in the habit of closing companies and starting up again?
All of the information will give you a clearer picture of who you are dealing with.
This information will be with you within an hour therefore you can give your potential client an answer the same day.
The membership to Tenable Business Support is £25 per month or £249 per year. Credit Checks are only one of the benefits! To see full details of how Tenable Business Support can help your business visit the website.
If you would like further information the please do not hesitate to email me or call me on 0800 4 96 95 94 for an informal chat.
The Credit Checks are thorough and can be done on any UK Limited company. Although we cannot tell you who to give credit to and who not to we can advise how they run the company so far - if their accounts are up to date, if they have any CCJ's but more importantly we look at the directors. Are they in the habit of closing companies and starting up again?
All of the information will give you a clearer picture of who you are dealing with.
This information will be with you within an hour therefore you can give your potential client an answer the same day.
The membership to Tenable Business Support is £25 per month or £249 per year. Credit Checks are only one of the benefits! To see full details of how Tenable Business Support can help your business visit the website.
If you would like further information the please do not hesitate to email me or call me on 0800 4 96 95 94 for an informal chat.
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