• understand if you can apply for an administration order;
• find out what an administration order does;
• help you to fill in an N92 application form for an administration order; and
• help you to make a court application (a 'composition order') to pay less than the full amount of your debt.

What is an administration order?

An administration order is a court order which stops further action by creditors whilst you make payments to court. You will make a single payment every month into the court. The court staff will then divide the money amongst your creditors on a pro-rata basis.

Advantages of an administration order

Whilst an administration order is in place, none of the creditors listed on it can take any action against you without first getting the court's permission. Visits from debt collectors, letters or phone calls from your creditors should stop once the administration order is in place.

• Having an administration order can save you a lot of time and trouble as the court deals with your debts on your behalf.
• Any interest and other charges that were being added on to the debts are stopped.
• It can also save you money if you were spending a lot on postage or on bus fares to make your payments.
• You do not have to pay a fee up front to the court for an administration order. The court will take a handling fee of ten pence out of every pound you pay in over the time the order lasts. This means the handling fee is 10% of your total debts. The fee is deducted from your payments into the court.

Composition orders

If you apply for a composition order at the same time as you apply for your administration order, then the amount of time you make payments for is limited, usually to three years . See the later section What is a composition order?

Who can apply?

You can get an administration order if:

• you have at least two debts;
• you have at least one county court or High Court judgment against you; and
• the total of your debts is less than £5,000 .

If you have received a parking penalty or congestion charge, you might be able to use this to apply for an administration order. Contact us for advice about doing this.

How do I apply?

• You apply for an administration order on an N92 form which you can get from your local county court office. It comes with some notes to help you complete it.
• Put the name of your local County Court on the form. This may be a different court to the one in which your creditors have taken you to court.
• PART A of the application form asks for details of your family and employment circumstances and details of your financial situation. This is similar to My Money Steps and you can simply transfer the information on to the 'statement of means' form, using the spaces marked other for expenses that aren't listed elsewhere.
• You need to fill in details of your bank accounts and savings. The form also asks for details of your mortgage and how much your house is worth.
• You also need to fill in your weekly or monthly outgoings under the section 'regular expenses and arrears' in PART A . List your regular payments in column (a). If you are in arrears with any of your priority debt payments, put the total amount you owe in column (b). It is important to show how much you are paying off the arrears in column (c). So, for example if you have made an arrangement to pay your rent arrears at a set amount each week, this figure should go in to column (c).
• PART B of the application form asks you to list your debts in the 'list of creditors'. You should list them all; arrears on priority debts as well as the total credit debts, but make it clear if you have separate arrangements to cover your priorities. Contact us for advice.
• Quote the account number, and the creditor's address to which the court can send your payments. If your creditors have passed the debts on to a solicitor or debt collection agency give this address for payment.
• In PART C of the application form, complete the box saying what you can afford to pay, otherwise the court staff will decide for you. You can get an idea of how much you can afford by looking at what is left, once you have paid your monthly expenditure, on My Money Steps.
• If you are getting a benefit, or on a low income, you may have to offer a very small amount a month if that is all you can afford to pay.
• Take statements or letters from your creditors with you as the court may want to see proof of your debts. They will also want a copy of any county court or High Court judgments you have listed.
• Keep a copy of your form in case there are any problems.

Don’t sign the form yet

Do not sign PART D 'declaration' on the form at this stage. This is because you will need to take it to the court yourself and sign the declaration in front of a court officer, to say that the information it contains is true to the best of your knowledge. The court officer may go through the information you have put down, and query anything that is not clear.

After I have handed in my application

• Once the court has accepted your application form they will inform your creditors that you have applied for an administration order.
• Your creditors then have 16 days in which to tell the court of any objections that they may have. They may think the offer you are making is too low, or they may disagree with the amount you say you owe.
• Your creditors can also ask the court to leave them out of the administration order. Priority creditors such as mortgage, rent, gas and electricity are likely to object because they want to make separate arrangements.
• If no objections are received within the time, and the court staff and district judge are happy with what you have offered, then the order will be made. Provided you pay what you have offered, the creditors can take no further action.
• You must attend the hearing. If you cannot go, you should write to the court explaining the reason why and ask for a new date.
• If there are any problems at all, the order should not be refused without a court hearing. A hearing should be arranged at court for you to go to and a district judge will consider your application. This hearing should be held in the district judge's private rooms. If creditors have objected they, or their representative, may go to the hearing too. You should be given a chance to state your case, and if the problems are then resolved, the district judge will make the order.
• Once the order is in place, you make your payments to the court and not to the creditors.

If your application is turned down

If your application is turned down you may have grounds for appealing or making a new application. Contact us for advice.

How long does an administration order last?

Unless the judge makes a composition order (see the later section What is a composition order?) or you stop making regular payments, an administration order will go on until all the debts are paid off in full. Your creditors may ask for your payments to be reviewed, or you can apply to change the terms of the order if your circumstances change. Details of your administration order will be recorded on credit reference files for a period of six years from the date of the administration order.

Problems with applying for an administration order

If you have to go to a hearing, it may be useful to contact a local advice agency such as a money advice centre or citizens advice bureau, all of whom may have experience of your local county court's policy. Here are some problems that you might come across.

My debts are more than £5,000

• Although administration orders are designed to deal with credit debts, the instructions for completing your application say to list all your debts. This can cause problems, because if you have mortgage arrears, or other priority debts, this can sometimes mean that the total of your debt looks as though it is over £5,000.
• You should state on the form that you are trying to come to separate arrangements with your priority creditors. If there is a hearing, take copies of any letters from your creditors to prove this.
• If you have to apply again, you should try putting a line after listing your priority debts, so that they are clearly separated, and not including them in the final total.
• Most courts will expect all your debts to be listed including priority debts. The creditors can then object to being included and then to go to the hearing. If they do not object they will be treated in the same way as all the other creditors listed. They should not be able to take any other action against you.

Some of my debts are in joint names

• When you fill in the administration order application form, you should state if another person borrowed the money with you and put down their name and address.
• You should put down the total amount of debt, and count it in full when deciding if your debts are under £5,000. This is because when you borrow money with someone else, you are each liable for the whole amount, not just for half each. This is known as joint and several liability.
• This may cause problems if the other borrower is your partner, as the creditor will still be able to go to them for the money if you get an administration order. If the other person also has a county court or High Court judgment and debts of less than £5,000 they can apply for their own administration order. If not, they will need to make a separate arrangement with the creditor concerned.
• Even if all your debts are in joint names, you will still have to apply for an administration order for each person. The court does not usually accept joint applications.
• If you have a court judgment between you, but it is in joint names, you can use the same judgment to make separate administration order applications.

I haven't got any available income

• Some courts may turn you down automatically if you are getting a benefit from the Department of Work and Pensions. They should not be doing this. Contact us for advice.
• Your applications may be refused if the information on the form makes it look like you haven't got enough money to pay what you have offered.
• Take a copy of your budget to the hearing. If you have kept up with the payments on court judgments in the past you can tell the court this to show that you can afford the payments you have offered.
• Tell the district judge about any other circumstances you think she/he may not have taken into account.
• If you have been turned down without a hearing, or you have had a hearing but still don't know why the district judge has refused to make an administration order, you may be able to get an explanation by writing to the court. Address your letter to the court manager.

Other issues

What about council tax and community charge arrears?

• Community charge (poll tax) is no longer in force so it is not an ongoing bill. Following a case called Preston BC v Riley [1995] the court should allow you to include poll tax arrears in your administration order.
• Council tax is an ongoing tax so you will have to include your usual payments in your essential expenditure on your budget.
• Council tax arrears for previous years can be included on the administration order on the basis of the Preston BC v Riley [1995] case in the same way as poll tax debts.
• The current year's council tax bill cannot normally be included unless you have fallen behind with payments and the council has told you that you have lost your right to pay by instalments, meaning the whole year's bill is now due.
• If your council tax is included in the administration order, any deductions from your benefit for payment of arrears should stop. Payments being taken from your wages for council tax arrears should also stop. Contact us for advice.

What about magistrates’ court fines?

You should include any magistrates’ court fines in your application for an administration order. It is common for the fine to be left out of your administration order by the district judge.It is important to keep paying the fine as normal to the magistrates’ court until it is agreed that it can be included in your administration order. Otherwise the magistrates’ court will take other action against you.Include the payments you are making to the magistrates’ court in your 'regular expenses' on the administration order. See our Magistrates’ court fines guide for more information.

Social fund loans and benefit overpayments

If you are having a weekly deduction made from your benefit for a social fund loan or overpayment of benefit you may find the Department for Work and Pensions (DWP) will continue to make deductions and object to being included in your administration order. You should still include a social fund loan in your application but it is likely to be left out by the district judge.

Make sure you only include the benefit you are actually paid after deductions are taken under 'income' on the application.

What can I do if I cannot afford to pay?

• You can apply to change the amount you pay each month if you think the court has set your payments too high, or if you have a change of circumstances that means you have less money available.
• You can use an N244 form, which is a general county court application form. You can get one from your court office. You should not pay a fee for making this application.
• These costs are treated as already being covered by the ongoing deductions to cover fees already in your administration order. If you are told to pay a fee complain to the court manager or, contact us for advice.
• State you wish to apply for a variation of the payments you are making under your administration order and say why you are applying. You can attach a copy of your budget to show how you have worked out your offer.
• You will usually have a hearing with the district judge in their private rooms. The district judge can change the terms of the administration order or composition order.

What if I don’t keep up with the payments?

The court can cancel or 'revoke' your administration order if you do not keep up with the payments. This is why it is very important to keep up with the payments or ask the court to reduce your payments if you can no longer afford them. If your administration order is revoked your creditors can pursue you again for each debt you owe in full, even if you had a composition order made.

What will happen when my administration order is paid off?

• When you have paid the administration order off in full you can get a 'certificate of satisfaction' from the county court. You have to pay a fee of £19 for this.
• Details of your administration order are kept on the Register of Judgments, Orders and Fines. This agency should mark your file to show the debts and the administration order are satisfied. If you have a composition order on your administration order then you can still get a certificate of satisfaction to show the administration order is paid but individual county-court judgments and other debts showing up on your credit reference file will not be marked as satisfied as they have not been paid in full.
• None of your creditors listed on the administration order can take further action against you if your administration order has finished, either because you paid it in full or paid the amount owed under the composition order.

What is a composition order?

If you are only paying a very small amount to your creditors there is a danger that your administration order could go on for years. A composition order is a way of trying to make sure that this does not happen. If the district judge makes a composition order, it means that you only have to pay part of your debts, usually an amount that you could manage to pay over a three-year period.

Asking for a composition order

Although the court should automatically consider whether it is appropriate to make a composition order in your case, you can use the anything else you would like the court to take into account box in PART C of the application form to say you would like a composition order.When applying for a composition order you need to work out how much you can afford to pay each month. This is then compared with how much you owe.

The result is that for every pound you owe, you will only pay a percentage of this off your debt. In the example shown below 11 pence is paid for every pound owed.

If you do not have a composition order made, you can apply for one separately even after your administration order is up and running. To apply for a composition order after the administration order has been made, use a form N244 which you get from your court. You should not have to pay a fee for this application.

The court can either agree your application or ask you to go to a hearing with a district judge in the County Court. Your application should not be rejected without a hearing. Contact us for advice.

How to work out a composition order

Example

In this example, you would offer to pay ‘to the extent of 11p in the £’

If you want to check you have worked out the composition correctly, contact us for advice.

Other guides that may help you

Council tax arrears guide

Credit reference agencies guide

Magistrate court fines guide

Ways to clear your debt

Get all the help you can

Being homeless can be overwhelming, but it is important to know what help is available to you. If you qualify for help under the homelessness rules, the council may be able to help you find a home. In some circumstances, the council will have to offer you accommodation. 

Don't assume that you can’t get any help. This guide can help you understand what the council can do for you. It might make a positive difference to what happens next. 

Use this guide to:

• work out what housing you might be able to get;
• help you understand when you can get help;
• understand the process the council must follow; and
• deal with the problems you may face in trying to get rehoused.

If you are not currently homeless, but are worried that you may lose your home, see our Advice if you are worried about losing your home guide for information.

Extra rules apply if you are worried about losing your home because of domestic violence. If you need to find somewhere else to live because you are experiencing or being threatened with domestic violence in your home, contact your local council or another council straightaway. In this situation, the council should treat you as homeless. Use this guide to see what help you can get.

Help from the council

In England, the rules that councils must follow are set out in  Part VII of the  Housing Act 1996. On  3 April 2018, some of the legislation in the  Housing Act 1996 was replaced by the  Homelessness Reduction Act 2017.

In Wales, the rules that councils must follow are set out in the  Housing (Wales) Act 2014. Although England and Wales have different legislation, the rules councils must follow are very similar.

Councils use this legislation to work out what help to give you if you are either threatened with homelessness or are homeless.

The law uses special terms, such as:

• eligible for help;
• in priority need;
• intentionally homeless; and
• a local connection.

These are explained in the following sections.

Who is eligible for help?

If you are homeless, you will be treated as eligible for help unless you are 'a person from abroad'. Certain categories of people who are classed as a 'person from abroad' can be eligible, for example if you have:

• refugee status;
• settled immigration status; or 
• exceptional leave to enter and remain.

European Union (EU) nationals

The rules about EU nationals and who is eligible for help are complicated. This section shows the main rules that apply. This advice also applies if you are a citizen of Iceland, Liechtenstein, Norway or Switzerland. 

• You can get help if you are an Irish citizen.
• You can get help if you have settled status in the UK. 
• You may be able to get help if you have pre-settled status in the UK, but you will have to meet extra conditions.
• You may be able to get help if you applied to the EU settlement scheme by  30 June 2021 and are still waiting for your application to be processed.

If you are unsure whether you are eligible for help, contact Shelter for more information. See Useful contacts at the end of this guide.

Who is in priority need?

The council will say you are in priority need if:

• your household includes someone who is pregnant;
• your household includes dependent children;
• you are vulnerable (for example, because of old age or a mental or physical disability), or your household includes someone who is vulnerable;
• you are homeless because of domestic abuse; or
• you are homeless because of an emergency such as a flood, fire or other disaster.

This is not a complete list of why the council might class you as in priority need. If you think you are in priority need because of another reason, check with your local council to see if this means they can help you.

Young people

Aged 16 or 17

If you are homeless, in most cases you are classed as a ‘Child in Need’ and are the responsibility of social services. This also applies if you have left foster care. Social services should take your wishes into account and should not offer foster care as a homelessness solution if this is not necessary.

Contact the homeless department of your local council who should provide emergency ‘interim’ accommodation to make sure you are safe. They will speak to social services. The council and social services will decide between them which department should help you in the longer term.

Who is intentionally homeless?

You are intentionally homeless if all of the following apply:

• you deliberately do or don’t do something which caused you to be homeless by leaving your accommodation (unless it was in good faith);
• the accommodation was otherwise available for you to live in; and 
• it was reasonable for you to keep living there.

The council may decide you are intentionally homeless if:

• you had somewhere else that was reasonable for you to live, but you chose to leave or to give up the property;
• you left somewhere where you could have continued to live, and you only left to get some help from the council;
• you have contrived your eviction (meaning you have arranged with your landlord that they tell you to leave); or
• you took on a new tenancy or mortgage even though you knew you could not afford the rent or mortgage payments at the time, and you have now lost your home due to arrears.

There are other reasons the council could decide you are intentionally homeless, for example, if you were evicted because of anti-social behaviour. If you are not sure whether you have made yourself intentionally homeless, contact Shelter for more information. See Useful contacts at the end of this guide.

You should not be intentionally homeless in the following situations.

• You left home because you felt threatened with violence.
• Your home was repossessed due to arrears which arose because you could not afford to pay your rent or mortgage, but you were able to afford the payments when you moved in. You need to show you were in financial hardship and there was no way your income could cover your rent or mortgage payment.
• The conditions in your home were so bad that you could not remain, and it would have been unreasonable to expect you to stay.
• You lost your home through someone else's actions which you did not know about or had no control over.

If the council decides you are intentionally homeless and you are a family with dependent children, the council can refer you to social services for help. You have to agree to the referral first. Social services have the power, under Section 17 of the Children Act 1989, to assist you with finding accommodation, perhaps by helping with rent in advance and a deposit. If the council says that they do not have to house you, then social services will offer to house the children only. Any adults in the family will have to find their own accommodation. In this case you may be able to challenge a decision. Contact Shelter for more information, see  Useful contacts at the end of this guide.

Living in Wales

If you live in Wales, each council can usually choose whether or not to apply the intentionally homeless rules when deciding if they should help you.

Although, from  2 December 2019, all councils in Wales have a duty to secure accommodation for certain households who are in a priority need, even if they are considered intentionally homeless. This usually includes households containing a pregnant person, dependent child or an adult under age  21 (or under age 25  if previously in care).

If you are unsure which rules your council should follow, contact Shelter Cymru. See Useful contacts at the end of this guide.

What is a local connection?

The council look at whether you have a connection to their area. If you have no local connection with the council where you have applied, you can be referred to an area where you do have a local connection instead.

You will have a local connection if you:

• have lived in the area for six months out of the last year, or three out of the last five years;
• work in the area;
• want to live near a close relative who has lived in the area for more than five years; or
• need to live in the area for a particular reason, such as you or your family needing to go to a certain school or use a hospital that is there.

If you have a local connection with the council you have applied to, as well as to another area, then you should not be referred to another council. If you have no local connection with the council you have applied to for rehousing, they may ask another council to help you, unless there is a risk of violence to your household if you return to the other council’s area.

If you have no local connection with another area (for example, you may have just come from abroad), then the council you apply to first must help you.

Armed forces

You will be treated as working in the area if you are serving in the armed forces.

Care leavers

If you are leaving care and do not have somewhere to live, you are entitled to help from the council. The council call this ‘leaving care duties’. You are considered to have a local connection with:

• the local authority that owes the leaving care duties;
• any authority in the country where you were looked after by the county council; or
• an authority in which you have lived for at least  2 years, at least some of the time before you turned  16.

This kind of local connection will last until you are  21.

Where can I get information?

If you are homeless, you should go to the housing department at the local council. The council must give advice to anyone who is homeless, or threatened with homelessness. This advice is free.The advice should tell you:

• what your rights are;
• what help is available from the council; and
• how to get help.

The advice must be accessible to everyone. It should be designed to meet the needs of vulnerable people.

Will the council carry out an assessment?

The council has a duty to carry out an assessment with you if they think you are:

• homeless; and
• eligible for help (see earlier section: Who is eligible for help?).

The assessment must look at:

• why you are homeless;
• what your housing needs are; and
• what help you need to find and keep suitable accommodation.

The assessment must be in writing. The council should give you a copy of the assessment.

You and the council should then try to agree a 'personalised housing plan'. The personalised housing plan will be based on the assessment that the council carried out. It should show what steps you need to take to find new accommodation. It should also say what steps the council will take to help you do this.

Councils in England should give you a copy of your personalised housing plan and there will be a copy for you at the council’s housing office.

If you and the council don't agree with the personalised housing plan, councils in England must write down why you disagree. The plan must include what steps they believe it would be reasonable for you to take and what steps it would be reasonable for them to take.

The assessment and personalised housing plan

The council should keep the assessment and personalised housing plan under review. Tell the council if your circumstances change.

What are the council’s duties if I am homeless?

The council has a responsibility to help you if you are homeless. The council must help you for  56 days if:

• you are homeless; and
• you are eligible for help (see earlier section: Who is eligible for help?).

The council must take reasonable steps to help you find and take up accommodation. The steps both you and the council must take are explained in your personalised housing plan.

The council has a duty to help  all eligible applicants, even if you are not in priority need and have been found intentionally homeless. This is sometimes called the 'relief duty'.

What help can you expect if you are homeless but not in priority need?

If you are eligible for help, but do not have a priority need, the council must help you for  56 days to try to find somewhere to live. This accommodation must be somewhere you can live for at least six months. The help the council could give includes:

• making you an offer of accommodation;
• providing you with a rent deposit; or
• helping you to find affordable accommodation.

The council's duty to help you can come to an end if:

• you have found suitable accommodation that is likely to last for six months  or more;
• you refuse an offer of accommodation that is likely to last for  six months or more;
• the council believe that you have ‘deliberately and unreasonably refused to co-operate’; or 
• you withdraw from the process.

The council must give you written notice that the process is coming to an end. They must also explain to you how you can ask for a review.

What help can you expect if you are homeless and in priority need?

When the council has reason to believe you are homeless, eligible for help and in priority need, they must provide you with interim accommodation. The council must do this until they have made a decision on whether you are in priority need. If you are intentionally homeless and in priority need, the council must provide you with temporary accommodation for a reasonable period. They must also offer you advice and assistance.

If the council offers you suitable accommodation and you refuse, they have no further duty to help you.

If you refuse to co-operate with the steps in the personalised housing plan but you are in priority need, the council must offer you a "final accommodation offer". This can be a tenancy with a private landlord. This is usually called an assured shorthold tenancy. There are more details about this type of tenancy in the later section, Other housing options.

Duty of public authorities

You can be referred to the council for help with housing by other public bodies. Public bodies could be hospitals, prisons, schools or GPs. They can only do this if they believe you are at risk of becoming homeless and they have your permission to do so. You can choose which council you are referred to.

Other housing options

The council waiting list

You can go on the waiting list at the same time as applying for rehousing as a homeless person.

Councils must have a scheme for deciding who can join the council waiting list. Individual councils have the power to decide who can join their list and why.

Reasons that someone may not be able to join a waiting list include the following.

• Immigration status (this could prevent you from joining any waiting list).
• Unacceptable behaviour, for example, serious anti-social behaviour or having previous rent arrears.

All schemes must give priority when allocating council housing to certain groups of people. This is called ‘reasonable preference’. Individual councils can choose who they give reasonable preference to. You may be given reasonable preference if:

• you live in overcrowded or unsanitary accommodation;
• you live in temporary or insecure accommodation;
• you live with dependent children or you are a pregnant woman;
• you live in a household with someone who needs settled accommodation because they are ill or disabled; or 
• you find it difficult to get settled secure accommodation.

Someone who is single and already has somewhere to live may wait a long time to be offered accommodation or may be excluded from some scheme lists altogether.

What if I disagree with the council's decision?

You can ask the council for a review if they will not let you on their waiting list. The deadline for requesting this type of review is normally  21 days. Contact us for advice.

Housing associations

Housing associations may be able to offer good accommodation at an affordable rent. Some will only let you apply if you already have your name on the council waiting list. In some areas housing associations and the council operate a joint waiting list. If this is the case, you will not need to apply individually to each housing association. Ask the housing association what rules apply in your area.

Housing associations may have their own criteria for people who they will house first. Some associations are set up to help certain groups of people, such as the elderly or low-income families. The council should be able to give you a list of housing associations in your area. GOV.UK provides details of your local council’s website.

Private landlords

Private landlords often advertise on the internet, in the newspaper or in shop windows. Some choose to let the property through an estate agent or property agent. Agents will often run credit reference checks. If you have some adverse information such as a county court judgment (CCJ) on your credit reference file, a private landlord may not agree to let you rent out their property.

If you decide to rent privately, look around first to find out what is on offer in your area and get an idea of what sort of rents are being charged.

You may need to find out from a local advice agency what maximum rents will be covered by the housing element of Universal Credit or by Housing Benefit in your area. They may also keep lists of local landlords. Landlords who have a smaller amount of properties may be more likely to rent you a property if you receive the housing element of Universal Credit or Housing Benefit. They are also less likely to run credit checks on potential tenants. Have a look at the house before you agree to move in or hand over any money. Ask for a receipt for any money you pay as rent or as a deposit. There are different types of private tenancy agreements. Your rights are affected by the type of tenancy you take and what sort of accommodation you have. Before signing an agreement with a landlord get advice from a local advice agency. 

In England, most private tenancies are assured shorthold tenancies. These will usually run for a minimum of  six months. You can be evicted with a court order using a bailiff’s warrant just because the tenancy has ended once the term of the tenancy has run out. Bailiffs are commonly known as enforcement agents. 

In  Wales, you will usually have a standard occupation contract if your landlord is a private landlord. Check your contract (also called a ‘written statement’) to see what type of agreement you have and how it can be ended.

Help with rent payments

If you are on a low income, you might be able to claim the housing element of Universal Credit to help with your rent. The amount of help you can get depends on where you live, how many bedrooms you are entitled to and the type of landlord you rent from. If you rent from a private landlord, you can work out the maximum you are allowed at the Directgov website.

In some circumstances, you might need to apply for Housing Benefit instead. This is usually because you have reached State Pension age or live in certain supported, sheltered or temporary housing. Housing Benefit may not cover your rent payments in full. You should work out a budget before signing any new agreement to make sure you can afford to ‘top-up’ your rent payments.

If you are under  35, rent from a private landlord and live alone, you may have to top up more rent than if you were in different circumstances. For more information go to www.shelter.org.uk and type 'Local housing allowance (LHA) if you’re under 35′ into the search box.

If you get the housing element of Universal Credit or Housing Benefit and the amount doesn't cover all your rent, you can apply to your council for a Discretionary Housing Payment. This is an amount of money the council can give you to help with housing costs that doesn’t have to be paid back. It is up to the council whether to give you a discretionary housing payment, and if so, how much. Shelter has an online tool that uses your postcode to find the contact details for your council's discretionary housing payments team. Go to www.shelter.org.uk and type 'Discretionary housing payments' into the search box.

If you get certain benefits, you may be able to apply for a budgeting loan or advance. For more information about benefits go to www.gov.uk and type the name of the benefit you are looking for into the search box.

Help with deposits

In some areas rental deposits, or 'bond' schemes, have been set up to help people on a low income or benefits to find private rented accommodation. These schemes help with rental deposits. Under the scheme you do not have to pay a deposit up front, and the tenancy agreement is with a landlord from an approved list. Your council may also help with rent in advance under their homelessness prevention powers. Schemes vary, so contact your local advice agency, local council or Shelter for more information. See  Useful contacts at the end of this guide.

Tenancy deposit protection

Since April 2007, any deposit you have to pay for a new assured shorthold tenancy must be protected under a government tenancy deposit protection scheme. Your landlord must tell you which scheme they have used to safeguard your deposit money until the end of the tenancy. The schemes can sort out disputes between you and your landlord. For more information, go to www.gov.uk and type 'tenancy deposit protection' into the search box.

If your landlord does not protect your deposit in time, you may be entitled to compensation. It may also prevent your landlord from evicting you in certain circumstances. Contact us for advice.

Other help

You may also be able to get help in the following ways.

• Asking social services for help if you have children. Contact your council for details of your local social services department.
• Applying to the council’s local welfare assistance scheme. Check with your local council if they still run one of these types of schemes.

Useful contacts

Shelter You can get further advice from www.shelter.org.uk, or a local Shelter advice service.If you have nowhere to sleep tonight, are at risk of harm or losing your home within the next two months, call ShelterHelpline on 0808 800 4444 for advice and information on your options.

Shelter Cymru For expert housing advice if you live in Wales. Phone: 0800 049 5495 www.sheltercymru.org.uk

Law Centres There may be a law centre locally that deals with housing issues. Phone: 020 3637 1330www.lawcentres.org.uk

Local Citizens Advice The address of your local Citizens Advice Bureau should be in the phone book. You can also check the Citizens Advice website: www.citizensadvice.org.uk

Civil Legal Advice To find a local housing solicitor. Phone: 0345 345 4345 www.gov.uk/civil-legal-advice

Other guides that may help you

Advice if you are worried about losing your home guide

Rent arrears – England guide

Rent arrears for standard occupation contracts – Wales guide

Rent arrears for secure occupation contracts – Wales guide

Get all the help you can

Being at risk of losing your home can be overwhelming, but it is important to know what help is available to you. If you qualify for help under the homelessness rules, the council may be able to help you to stay in your current home or help you to find another one if you have to leave.

Don't assume that you can’t get any help. This guide can help you understand what the council can do for you. It might make a positive difference to what happens next. 

Use this guide to:

• help you understand when you can get help;
• understand the process the council must follow; and
• deal with the problems you may face in trying to get rehoused.

The information in this guide does not apply if you are currently homeless. If this is the case, see our Advice if you are homeless guide for information.

Extra rules also apply if you are worried about losing your home because of domestic violence. If you need to find somewhere else to live because you are experiencing or being threatened with domestic violence in your home, contact your local council or another council straightaway. In this situation, the council should treat you as homeless. See our Advice if you are homeless guide.

Help from the council

In England, the rules that councils must follow are set out in Part VII of the Housing Act 1996. On 3 April 2018, some of the legislation in the Housing Act 1996 was replaced by the Homelessness Reduction Act 2017.

In Wales, the rules that councils must follow are set out in the Housing (Wales) Act 2014. Although England and Wales have different legislation, the rules councils must follow are very similar.

Councils use this legislation to work out what help to give you if you are either threatened with homelessness or are homeless.

The law uses special terms, such as 'eligible for help' and 'threatened with homelessness'. These are explained in the following sections.

Who is eligible for help?

You will be treated as eligible for help unless you are 'a person from abroad'. Certain categories of people who are classed as a 'person from abroad' can be eligible, for example if you have:

• refugee status;
• settled immigration status; or
• exceptional leave to enter and remain.

European Union (EU) nationals

The rules about EU nationals and who is eligible for help are complicated. This section shows the main rules that apply. This advice also applies if you are a citizen of Iceland, Liechtenstein, Norway or Switzerland.

• You can get help if you are an Irish citizen.
• You can get help if you have settled status in the UK.
• You may be able to get help if you have pre-settled status in the UK, but you will have to meet extra conditions.
• You may be able to get help if you applied to the EU settlement scheme by 30 June 2021 and are still waiting for your application to be processed.

If you are unsure whether you are eligible for help, contact Shelter for more information. See Useful contacts at the end of this guide.

Who is threatened with homelessness?

In England and Wales you are threatened with homelessness if:

• you are likely to be homeless within 56 days; or
• you have received a valid Section 21 (s21) notice from your landlord that will run out within 56 days.

When you are threatened with homelessness the council has a duty to try to help you. The council should provide you with information and may have to carry out an assessment to help you further.

Where can I get information?

If you are threatened with homelessness, you should go to the housing department at the local council. The council must give advice to anyone who is threatened with homelessness. This advice is free.

The advice should tell you:

• what your rights are when you are threatened with homelessness;
• what help is available from the council; and
• how to get help.

The advice must be accessible to everyone. It should be designed to meet the needs of vulnerable people.

Will the council carry out an assessment?

The council has a duty to carry out an assessment with you if they think you are:

• threatened with homelessness; and 
• eligible for help (see the earlier section, Who is eligible for help?).

The assessment must look at:

• why you are threatened with homelessness;
• what your housing needs are; and
• what help you need to find and keep suitable accommodation.

The assessment must be in writing. The council should give you a copy of the assessment.

You and the council should then try to agree a 'personalised housing plan'. The personalised housing plan will be based on the assessment that the council carried out. It should show what steps you need to take to try to keep your current home or to find new accommodation. It should also say what steps the council will take to help you do this.

Councils in England should give you a copy of your personalised housing plan and there will be a copy for you at the council’s housing office.

If you and the council don't agree with the personalised housing plan, councils in England must write down why you disagree. The plan must include what steps they believe it would be reasonable for you to take and what steps it would be reasonable for them to take.

The assessment and personalised housing plan

The council should keep the assessment and personalised housing plan under review while you are threatened with homelessness. Tell the council if your circumstances change.

What must the council do if I am threatened with homelessness?

If the council thinks you are eligible for help under these rules, they have a duty to try to stop you being made homeless. This is sometimes called the 'preventative duty'. The council's duty starts  56 days  before the date you are likely to be made homeless. The council is expected to take reasonable steps to prevent you from being made homeless or to help you keep your current home. The steps the council must take will be explained in your personalised housing plan. The steps might include:

• giving you advice on how to defend a repossession claim and try and save your home;
• mediation to try to keep your family together; or
• help with a deposit to allow you to find alternative accommodation when your tenancy ends.

This is not a full list, but gives some idea of the type of help the council might be able to give you.

The council's duty to prevent you from being made homeless can end sooner than 56 days in some cases. The duty could end early if:

• you find suitable accommodation that you can live in for a minimum of 6 months;
• you deliberately refuse to co-operate with the assessment and the council think this is unreasonable;
• you refuse an offer of accommodation;
• you chose to withdraw from the process; or
• you become homeless. (In this situation you will be able to get further help. See our Advice if you are homeless guide.)

If the council want to end their involvement they must give you notice. This notice must explain why they are ending the help. It must also explain how you can ask for a review.

Section 21 (s21) notices

There are special rules if your landlord has given you a valid section 21 (s21) notice. The council must start to help if you are 56 days from the expiry date of the s21 notice. The council must carry on helping you, even if this takes longer than 56 days for you to be evicted. They must continue to help you until they are satisfied you are homeless, or there is a separate reason to end the preventative duty, for example, if you find suitable accommodation that you can live in for a minimum of 6 months.

Duty of public authorities

You can be referred to the council for help with housing by other public bodies. Public bodies could be hospitals, prisons, schools or GPs. They can only do this if they believe you are at risk of becoming homeless and they have your permission to do so. You can choose which council you are referred to.

Help with rent

If you are on a low income, you might be able to claim the housing element of Universal Credit to help with your rent. The amount of help you can get depends on where you live, how many bedrooms you are entitled to and the type of landlord you rent from. If you rent from a private landlord, you can work out the maximum rent you are allowed at the Directgov website.

In some circumstances, you might need to apply for Housing Benefit instead. This is usually because you have reached State Pension age or live in certain supported, sheltered or temporary housing. Housing Benefit may not cover your rent payments in full. You should work out a budget before signing any new agreement to make sure you can afford to ‘top-up’ your rent payments.

If you are under 35, rent from a private landlord and live alone, you may have to top up more rent than if you were in different circumstances. For more information go to www.shelter.org.uk and type 'Local housing allowance (LHA) if you’re under 35′ into the search box.

If you are already claiming the housing element of Universal Credit or Housing Benefit in your current accommodation and the amount you get doesn't cover all your rent, you can apply to your council for a Discretionary Housing Payment. This is an amount of money the council can give you to help with housing costs that doesn’t have to be paid back. It is up to the council whether to give you a discretionary housing payment, and if so, how much. Shelter has an online tool that uses your postcode to find the contact details for your council's discretionary housing payments team. Go to www.shelter.org.uk and type 'Discretionary housing payments' into the search box.

If you get certain benefits, you may be able to apply for a budgeting loan or advance. For more information about benefits go to www.gov.uk and type the name of the benefit you are looking for into the search box.

Help with deposits

In some areas rental deposits, or 'bond' schemes, have been set up to help people on a low income or benefits to find private rented accommodation. These schemes help with rental deposits. Under the scheme you do not have to pay a deposit up front, and the tenancy agreement is with a landlord from an approved list. Your council may also help with rent in advance under their homelessness prevention powers. Schemes vary, so contact your local advice agency, local council or Shelter for more information. See Useful contacts at the end of this guide.

Tenancy deposit protection

From 6 April 2007, any deposit you have to pay for a new assured shorthold tenancy must be protected under a government tenancy deposit protection scheme. Your landlord must tell you which scheme they have used to safeguard your deposit money until the end of the tenancy. The schemes can sort out disputes between you and your landlord. For more information, go to www.gov.uk and type 'tenancy deposit protection' into the search box.

If your landlord does not protect your deposit in time, you may be entitled to compensation. It may also prevent your landlord from evicting you in certain circumstances. Contact us for advice.

Other help

You may also be able to get help in the following ways.

• Asking social services for help if you have children. Contact your council for details of your local social services department.
• Applying to the council’s local welfare assistance scheme. Check with your local council if they still run one of these types of schemes.

Other housing options

The council waiting list

You can apply to go on the council waiting list at the same time that you ask for help because you are at risk of becoming homeless.

Councils must have a scheme for deciding who can join the council waiting list. Individual councils have the power to decide who can join their list and why.

Reasons that someone may not be able to join a waiting list include the following.

• Immigration status (this could prevent you from joining any waiting list).
• Unacceptable behaviour, for example, serious anti-social behaviour or having previous rent arrears.

All schemes must give priority when allocating council housing to certain groups of people. This is called ‘reasonable preference’. Individual councils can choose who they give reasonable preference to. You may be given reasonable preference if:

• you live in overcrowded or unsanitary accommodation;
• you live in temporary or insecure accommodation;
• you live with dependent children, or you are a pregnant woman;
• you live in a household with someone who needs settled accommodation because they are ill or disabled; or
• you find it difficult to get settled secure accommodation.

Someone who is single and already has somewhere to live may wait a long time to be offered accommodation or may be excluded from some scheme lists altogether.

What if I disagree with the council's decision?

You can ask the council for a review if they will not let you on their waiting list.

The deadline for requesting this type of review is normally 21 days. Contact us for advice.

Housing associations

Housing associations may be able to offer good accommodation at an affordable rent. Some will only let you apply if you already have your name on the council waiting list. In some areas housing associations and the council operate a joint waiting list. If this is the case, you will not need to apply individually to each housing association. Ask the housing association what rules apply in your area.

Housing associations may have their own criteria for people who they will house first. Some associations are set up to help certain groups of people, such as the elderly or low-income families. The council should be able to give you a list of housing associations in your area. GOV.UK will provide details of your local council’s website.

Private landlords

Private landlords often advertise on the internet, in the newspaper or in shop windows. Some choose to let the property through an estate agent or property agent. Agents will often run credit reference checks. If you have some adverse information such as a county court judgment (CCJ) on your credit reference file, a private landlord may not agree to let you rent out their property.

If you decide to rent privately, look around first to find out what is on offer in your area and get an idea of what sort of rents are being charged.

You may need to find out from a local advice agency what maximum rents will be covered by the housing element of Universal Credit or by Housing Benefit in your area. They may also keep lists of local landlords. Landlords who have a smaller amount of properties may be more likely to rent you a property if you receive the housing element of Universal Credit or Housing Benefit. They are also less likely to run credit checks on potential tenants. Have a look at the house before you agree to move in or hand over any money. Ask for a receipt for any money you pay as rent or as a deposit.

There are different types of private tenancy agreements. Your rights are affected by the type of tenancy you take and what sort of accommodation you have. Before signing an agreement with a landlord get advice from a local advice agency.

In England, most private tenancies are assured shorthold tenancies. These will usually run for a minimum of six months. You can be evicted with a court order using a bailiff’s warrant just because the tenancy has ended once the term of the tenancy has run out. Bailiffs are commonly known as enforcement agents.

In Wales, you will usually have a standard occupation contract if your landlord is a private landlord. Check your contract (also called a ‘written statement’) to see what type of agreement you have and how it can be ended.

Useful contacts

Shelter You can get further advice from www.shelter.org.uk, or a local Shelter advice service.If you have nowhere to sleep tonight, are at risk of harm or losing your home within the next two months, call ShelterHelpline on 0808 800 4444 for advice and information on your options.

Shelter Cymru For expert housing advice if you live in Wales. Phone: 0800 049 5495 www.sheltercymru.org.uk

Law Centres There may be a law centre locally that deals with housing issues. Phone: 020 3637 1330www.lawcentres.org.uk

Local Citizens Advice The address of your local Citizens Advice Bureau should be in the phone book. You can also check the Citizens Advice website: www.citizensadvice.org.uk

Civil Legal Advice To find a local housing solicitor. Phone: 0345 345 4345 www.gov.uk/civil-legal-advice

Other guides that may help you

Advice if you are homeless guide

Rent arrears – England guide

Rent arrears for standard occupation contracts – Wales guide

Rent arrears for secure occupation contracts – Wales guide

This guide covers orders which are made in the County Court after you have received a county court judgment (CCJ). We will help you to understand your rights and the options you have to deal with an attachment of earnings order.

Use this guide to:

• find out when a creditor can apply for an attachment of earnings order;
• understand what court forms you will get and how to deal with them;
• find out what to do if an attachment of earnings order may affect your job;
• ask the court to look again at their decision about the terms of the order;
• apply to change the terms of the order if your circumstances change; and
• get more information about any court fees you may have to pay.

This guide includes:

• information about and links to the application for an attachment of earnings order and reply form.

Attachment of earnings orders

If a creditor has a judgment against you in the County Court that you do not pay, they can try to enforce the judgment against you. One of the ways this can be done is the creditor applying to the County Court for an attachment of earnings order to be made. This order tells your employer to make deductions straight from your earnings in order to pay the debt. Your employer then sends the money to the court.

The court can order deductions to be made directly from your earnings if:

• you are behind with the payments on your county court judgment (CCJ);
• you are an employee (not self-employed or on benefits); and
• you owe more than £50 on the judgment.

Fees and costs

The creditor has to pay a fee when they apply for an attachment of earnings order. They can add this fee to your debt. Your employer can also deduct £1 every time they take money out of your wages towards the cost of administering the attachment of earnings order.

Filling in the court forms

If the creditor makes an application for an attachment of earnings order, the court will send you a form to fill in called an N56. This asks you to fill in:

• your name, address and number of dependants;
• your employer details;
• your income and outgoings; and
• any other debts and court orders that you have.

There is a section asking you to make an offer of payment that you can afford. You should fill this in and make sure you have included details of all your other debts and how much you are paying to other creditors. You can also ask the court to agree to make a suspended attachment of earnings order by ticking the box and filling in the reason why you want a suspended order. This could be that you may lose your job or promotion prospects if your employer finds out you are in debt.

Court forms

You can find most court forms using the court form finder on the HM Courts and Tribunals Service website. You can fill in application forms online and print them off to sign and send to the court.

What happens when I send back the court form?

A court officer will use the information on the N56 form to make an attachment of earnings order. It is a good idea to send the form recorded delivery and keep a copy.

The court cannot make an attachment of earnings order if your take-home pay is below a certain level. This is called the 'protected rate'. Although the County Court generally looks at your ability to repay the debt they use a much stricter system for calculating attachment of earnings repayments. They do this because it is a method of enforcement. The 'protected rate' is calculated by the court staff and uses set figures for essential expenditure such as housekeeping.

The court will then send you the order in writing. If you have asked for the attachment of earnings to be suspended the court staff will decide if they agree with you and include this in the order.

Contacting the court by email

You may be able to contact the court by email. Contact us for advice.

What happens if I don’t send the form back?

You must send the form back to the court so that the court gets it within eight days of you receiving the N56 .

It is an offence not to send back the form or to give false information .

If you don't send back the N56 form then county court bailiffs (also known as enforcement officers) will serve you with an order to fill it in. If you still don't contact the court then you will be sent a notice to go to a court hearing to explain why you have not given the court the information requested.

If the creditor knows your employer’s address, the court can go directly to the employer to ask them to provide details of your earnings if you do not return the N56 form to the court.

What if I disagree with the order made by the court?

You or your creditor have 14 days to tell the court you disagree with the terms of the order. You should write to the court and keep a copy of your letter. You may have asked for the order to be suspended and need to give the court more details about why your employment may be affected. You may find the court has set the instalments too high.

A hearing will be arranged in your local County Court hearing centre with a District Judge in their private rooms. Make sure you go to the hearing and take your personal budget and details of your other debts with you. At the hearing you should explain to the District Judge why the level of the attachment of earnings will cause problems or how the order will affect your job if it is not suspended.

Consolidated orders

If you have an attachment of earnings order and have other county court judgments (CCJs) then you can apply to have a consolidated attachment of earnings order made. This makes it easier for you if you have to make your own payments to several different creditors. A consolidated attachment of earnings order means one monthly payment is deducted by your employer to cover all the CCJs and sent to the court. The court then divides the money up and sends the payments to all your creditors for you.

To apply for a consolidated attachment of earnings order you must make an application to the court on a form called an N244, giving details of all the attachment of earnings orders and CCJs that you want to consolidate.

You do not have to pay a fee up-front to make this application. Instead, ten pence is deducted by the court for every pound paid in whilst the consolidated order is in force.

There is no hearing. The creditors have 14 days to object to the order being made. It is unusual for the court to refuse to make a consolidated attachment of earnings order and you will be sent details of the new order by the court.

Include a budget summary

Make sure you include a budget summary and make it clear how much you can afford to pay in total on the new order. If you can afford no more than the current attachment of earnings payments and want this to be divided up between all the creditors then you should say so.

Think before applying

This is only a good idea if you do not mind having the attachment of earnings order being deducted from your wages. It will only cover other debts if those creditors have a CCJ against you. If you have other credit debts that have not been to court, they cannot be included in the consolidated order. You will need to build in the payments to those creditors in your personal budget.

Changing the payments

You can apply to the court on an N244 to 'vary' or change the order if you find that you cannot afford the deduction rate on the attachment of earnings order because your circumstances have changed. You will have to give full details of your budget and why you cannot afford the deductions set by the court. You can also use this form if your circumstances at work change and you want the court to look at suspending the attachment of earnings order.

Court fees

You will have to pay a fee to the court when you make your application. If you are on a low income or certain benefits, you may not have to pay the fee.

Leaving your job

If you leave your job the attachment of earnings stops but is not cancelled by the court. If you get another job the attachment of earnings order can be used again by the creditor. You must give the court details of your new employer or the court can decide you have committed an offence and you can be fined by the court or sent to prison. If your creditor stops getting payments and thinks you have a new job, they can ask the court to order you to file a statement of means at the court or explain why you have not done so at a court hearing. Contact us for advice.

Other guides that may help you

Help with court fees guide

• understand the sorts of debt that are collected by private bailiffs;
• find out about the guidelines that apply to them; and
• find out about the different ways of making a complaint.

The sample letters mentioned in this guide can be filled in on our website.

Debt collection agencies

Sometimes creditors will use debt collection agencies to ask you to pay what you owe. Debt collection agencies are usually asked to act for the creditor before a creditor takes court action against you. They are not bailiffs and have no right to take your goods or to come into your home. Before using this guide, check whether you are dealing with a debt collection agency or bailiff. If you are not sure, contact us for advice.

Terms used to describe bailiffs

Bailiffs are also commonly known as enforcement agents. In this guide we use the term bailiff.

Private bailiffs

This guide deals with complaints about private bailiffs. It does not apply to complaints about county court bailiffs or high court bailiffs. If you have a complaint about a county court bailiff or high court bailiff, contact us for advice.

• Creditors can only use private bailiffs as their agents in certain circumstances. A private bailiff can be employed by a creditor to try to remove your goods. Private bailiffs can usually only be asked to collect a debt after a creditor has taken court action against you.
• Councils can only use bailiffs to collect business rates or council tax arrears after they have got a liability order against you.
• Councils can only use bailiffs to collect unpaid parking penalty charges after they have got an order for recovery through the Traffic Enforcement Centre (part of the County Court).
• The Child Support Agency or the Child Maintenance Service can only use bailiffs to collect child support arrears after they have got a liability order against you.
• Magistrates' court bailiffs can only be used after you have got a fine from the magistrates' court.
• If bailiffs remove goods, those goods may be sold to raise money to pay what you owe.
• In this guide, the term 'creditor' is used to describe the local authority, the Child Support Agency or whichever organisation has instructed the bailiff to act.

You will often have chance to negotiate with the creditor before bailiffs can be used. Contact us for advice about the options you have to deal with your debt and to avoid bailiff action.

On 6 April 2014, changes were made to bailiff law. Under the new rules, it appears that most bailiffs do not have the right to force entry to your home unless you have let them in peacefully before and they have followed the correct procedures. If the bailiffs have already been into your home, get help to check whether they have followed the new rules correctly. If you are unsure about your rights, or if bailiffs threaten to come into your home when they have not been in before, contact us for advice.

Get help

Get advice first. Bailiff law is very complex, and even if you think what the bailiffs have done is unfair, they may still be acting within the law.

Complaint issues

If you are unhappy with the way a bailiff has treated you, you have a right to complain. This does not always mean you will be successful. But it does mean that your views should be heard. Common examples of things that you could complain about include the following.

• Bailiffs being threatening or aggressive.
• Bailiffs telling you that they have the power to do things when they do not.
• Bailiffs charging you more in fees than the law allows.
• Bailiffs giving you unclear or misleading information about your rights.
• Bailiffs not taking your circumstances into account when negotiating with you.
• Bailiffs trying to take goods that do not belong to you.
• Bailiffs trying to take goods that the law says they shouldn't take.

Contact before complaining

Before making a complaint, contact us for advice to see if you have grounds for making a complaint.

Taking Control of Goods: National Standards

The Ministry of Justice has issued guidelines called ‘Taking Control of Goods: National Standards’. These apply to all types of bailiffs and describe how they are expected to behave. The guidelines are not legally binding. This means that if a bailiff breaks the guidelines, they are not breaking the law. However, because the guidelines describe how bailiffs should behave, they are useful to mention when making a complaint.

You can view a copy of the guidelines on www.gov.uk or contact us for advice.

The guidelines explain that the bailiffs should:

• act within the law at all times;
• not say they can do things when the law does not allow them to;
• not act in a threatening way towards you;
• provide information to you in a clear way;
• give you clear information about fees that are added to your account;
• provide you with a breakdown of fees that have been added to your account when you make a written request;
• avoid telling anyone else why they are visiting you;
• respect your religion and culture;
• take care that proper procedures are followed when they try to take your goods;
• handle your goods with care to avoid unnecessary damage; and
• recognise when you may be vulnerable.

If you are vulnerable, you can ask the bailiff to return the debt to the creditor or to accept monthly payments from you without taking further action. The bailiff should follow the procedures they have agreed with the creditor to help make sure you are dealt with fairly. They should report any concerns they have back to the creditor. If a bailiff does not agree to do this, you may be able to persuade them if you can show that you fall within one or more of the groups that the guidelines say may be vulnerable. You may find our Tell a bailiff that you are vulnerable sample letter helpful.

Am I vulnerable?

The guidelines describe when you may be viewed as vulnerable. This includes when you:

• are old or seriously ill;
• have a disability;
• are a single parent family;
• are pregnant; or
• have difficulty speaking, reading or understanding English.

This is not a full list of all the situations when you might be considered vulnerable. Even if you fall into one of these categories, it does not mean that you will always be classed as vulnerable.

Enforcement Conduct Board – Standards for Agents

The Enforcement Conduct Board (ECB) is an independent oversight body for the debt enforcement sector in England and Wales. It monitors and supervises the conduct of bailiffs and enforcement firms who are accredited ECB members, aiming to ensure fair treatment and accountability.

The ECB has introduced a set of standards which describe how bailiffs who work for ECB accredited firms are expected to behave. The ECB's Standards for Agents – Professional Values and Standards of Practice for Enforcement Agents have been designed to be similar to the Taking Control of Goods: National Standards discussed in the previous section. The standards are not legally binding. This means that if a bailiff breaks the standards, they are not breaking the law. However, they are useful to mention when making a complaint to the ECB about the poor behaviour of bailiffs who work for one of their accredited member firms.

You can find details of ECB member firms listed in the Accredited Firms Register.

Complaining to the bailiff

It is usually a good idea to complain to the bailiff first.

• Write to the bailiff explaining your complaint.
• Set out the facts as clearly as you can.
• Say what you are not happy with, and what you want them to do about it.
• Include any evidence that you feel supports your complaint.
• You may find our Complain to a bailiff company sample letter helpful.

Ask the bailiff for a copy of their complaints procedure. This will tell you how they should deal with your complaint, and in what timescale. Remember to send a copy of your complaint to the creditor.

Complaining to the Enforcement Conduct Board

The Enforcement Conduct Board (ECB) is an independent oversight body for the debt enforcement sector in England and Wales. You can complain to the ECB about accredited enforcement firms and their bailiffs if you have already tried complaining to the enforcement firm or bailiff directly. The ECB can only consider complaints about enforcement action that took place from 1 January 2025 onwards.

You can find details of ECB accredited member firms listed in the Accredited Firms Register. The ECB will not handle complaints about Local Authority in-house enforcement teams, despite some being accredited by the ECB.

The ECB website has an online complaints form. You need to initially answer a few questions to check that your case is suitable. You will then be prompted to set up an account in order to access the complaints form.

If you aren’t able to use the online form you can download the form and email it to: Complaints.Team@enforcementconductboard.org. However, the ECB warn that emailing a complaint form to them can cause delays, so the online route is likely to be the best option if you are able to use it.

You will need to provide information on the following points when completing the complaints form.

• Details of your complaint.
• When it happened.
• The impact it has had on you.
• The outcome you are seeking.
• If your complaint is with another complaint handler. For example, an ombudsman.
• If you are taking or planning to take legal action.
• If you are complaining on behalf of yourself, or for someone else.
• The correspondence relating to your complaint that you have exchanged with the enforcement firm.

Complaining to the creditor

If you are unhappy with the bailiff's response to your complaint, you can also complain to the creditor. Ask for their complaints procedure so that you can see how they should deal with your complaint. They may also have a policy about how the bailiffs should treat you and when bailiffs should return your case to them. Send the creditor a copy of your original complaint and the bailiff’s response.

Explain why you are unhappy with the bailiff's response. The creditor is generally responsible for the actions of their bailiffs. Don't be put off if the creditor says that they cannot handle your complaint. Send them a copy of your complaint by recorded delivery and keep a copy for your own records.

Complaining to the magistrates' court

If you are dealing with a bailiff who is collecting a magistrates' court fine, you can raise the matter with the magistrates' court that instructed the bailiff. Explain why you are unhappy with how the bailiff has dealt with your case and what you want the court to do to resolve the matter. Ask the court for a copy of their complaints procedure.If you have followed the court's complaints procedure in full and are unhappy with the response, you can ask your MP to refer your complaint to the Parliamentary and Health Service Ombudsman.

Guides

We produce other guides that contain information about particular types of bailiffs. See the later section Other guides that may help you.

Complaining to the ombudsman

For some debts, you may be able to make a complaint to an ombudsman about how the bailiffs have behaved. You will not be charged a fee for doing this. You usually have to complain to the creditor that employs the bailiff first. For example, you may be able to complain to the Local Government and Social Care Ombudsman (LGSCO) about bailiffs employed by a council in England, but you must complain to the council first.

The LGSCO may not consider complaints if there is a specific court process to deal with the issue, for example disputes about ownership of goods or bailiffs’ fees. If the ombudsman agrees with your complaint, it can ask the creditor to:

• apologise to you;
• pay you compensation; and
• improve their procedures.

The Local Government and Social Care Ombudsman (for England) and Public Services Ombudsman for Wales have useful information on their websites about how to make a complaint and what types of complaint they can deal with. See the later section Useful contacts.

Civil Enforcement Association

Most private bailiff firms are members of the Civil Enforcement Association (CIVEA), which is a trade body. Trade bodies are formed to represent the interests of their members. If a bailiff is a CIVEA member shown on www.civea.co.uk, you can use the CIVEA complaints process.

CIVEA will not deal with complaints that relate to the following debts.

• Local authority debts, such as council tax, business rates and penalty charge notices (PCN).
• Transport for London (TfL) debts, such as the congestion charge.

Bailiff certification

Bailiffs have to have a certificate granted by the County Court. A complaint from you can help get the certificate withdrawn. The court will hold a hearing and can cancel the bailiff's certificate. Alternatively they can suspend the bailiff's certificate and order them to retrain. You do not have to pay a fee to make this application. You need to fill in a Complaint against a certificated person form and send it to the County Court hearing centre that granted the bailiff their certificate. Contact us for advice.

Certificated bailiff register

You can find out if a bailiff has a current certificate by searching the Court Service on-line Certificated Bailiff Register on this website:

certificatedbailiffs.justice.gov.uk/CertificatedBailiffs/.

Alternatively, call the County Court Bulk Centre on 0300 123 1057.

Other remedies

This guide covers the main types of complaint that you can make about bailiffs. There may be other things you can do if a bailiff has broken the law.

For example, there are different types of court action you can take.

• If the bailiffs have taken goods that they shouldn't, you could issue a court claim for return of goods.
• If the bailiffs have not followed the proper procedures when taking control of your goods, you could issue a court claim for any loss you have suffered.

Get advice before taking any type of court action. Talk to a local money advice centre, law centre, citizens advice bureau or contact us for advice.

Useful contacts

Civil Enforcement Association Phone: 0844 893 3922 www.civea.co.uk

Local Government and Social Care Ombudsman (England) Phone: 0300 061 0614 www.lgo.org.uk

Public Services Ombudsman for Wales Phone: 0300 790 0203 www.ombudsman.wales

Taking Control – The campaign for bailiff reform www.bailiffreform.org

Other guides that may help you

Council tax arrears guide

Magistrates’ court fines guide

Penalty charge notices guide

• understand what bankruptcy is;
• find out how to make yourself bankrupt;
• find out how a creditor can make you bankrupt; and
• understand how bankruptcy can affect you and the things you own.

Bankruptcy

Bankruptcy is a way of dealing with debts that you cannot pay. While you are bankrupt any assets that you have might be used to pay off your debts. After a period of time (usually one year) most of your outstanding debts are written off and you can make a fresh start. This is known as discharge from bankruptcy. The effects of going bankrupt are the same whether you apply yourself or a creditor makes you bankrupt.

How to go bankrupt yourself

If you wish to make yourself bankrupt, you must apply online. There is no minimum amount of debt you have to owe before you can apply for bankruptcy. Go to www.gov.uk and search for ‘apply for bankruptcy’. If you do not have access to the internet, contact us for advice.

Do I have to pay a fee?

You have to pay a total fee of £680 to go bankrupt. You can pay the fee online when you apply. If you cannot afford to pay the full fee all at once, you can pay the fee by instalments of at least £5. However, you must pay the full fee before you can complete your application. You can also pay the fee in cash at certain banks. However, if you choose this method, you cannot pay by instalments and you must pay the whole fee at once. If someone has agreed to make the payment for you, they can pay online when you apply.

What happens after I have applied?

Once you have completed your online application, it is sent to the adjudicator at the Insolvency Service. You do not have to go to a court hearing. The adjudicator will check your application to make sure that you cannot pay your debts as they fall due. They will also check that England or Wales is the correct place for you to go bankrupt. The adjudicator will decide whether to make a bankruptcy order within 28 days of receiving your application.

If the order is made you will then have an appointment to see the official receiver who deals with your bankruptcy. Sometimes this will take place over the phone. They will want to go through a long questionnaire with you to look at some personal and financial details. This includes things such as your National Insurance number, details of any pension policies you have, details of any assets you have, and looking at your income and outgoings.

For more information on the bankruptcy process and the interview with the official receiver, see the Insolvency Service's Guide to bankruptcy.

Can my application be refused?

If the adjudicator refuses to make a bankruptcy order, they will send you a notice to tell you this. This is called a 'notice of refusal'. This notice must tell you why the adjudicator did not make you bankrupt. You can ask them to review their decision, but you must do this within 14 days of the notice of refusal being delivered.

When the adjudicator reviews their decision, you cannot provide them with any new information. You must give reasons for asking the adjudicator to review their decision, but they can only consider the information you provided with your original application. If the adjudicator still does not make you bankrupt, they must send you a notice to confirm this. You can appeal to the court against their decision, but you must do this within 28 days of getting the second notice which confirms the adjudicator has refused your application. If you appeal to court and lose, you may have to pay extra court costs.

If you want to appeal to the court against an adjudicator's decision, you will need extra help. Contact us for advice about finding the type of help that you need.

A creditor makes you bankrupt

A creditor can make you bankrupt if you owe £5,000 or more to that creditor and you have not been able to agree how to repay the debt. Creditors can 'club together' to make you bankrupt but this is rarely done. You can also be made bankrupt if have an individual voluntary arrangement (IVA) that fails.

Before applying to make you bankrupt, a creditor usually needs to send you a 'statutory demand'. A statutory demand is a formal demand for a debt of at least £5,000. It requires you to either:

• pay the demanded amount;
• offer to secure the debt against any property you own (create a voluntary charge); or
• offer to pay the debt in a way that the creditor agrees to (for example by instalments).

Statutory demands can be hand delivered or posted.

You can apply to have a statutory demand 'set aside' in certain circumstances – for example if your debt is below £5,000 or there is a significant dispute about the money owed. There are strict time limits for doing this. Contact us for advice.

The creditor can apply for a bankruptcy order through the County Court if:

• 21 days have passed since a statutory demand was served; and
• the debt is still at least £5,000.

A hearing will be held if a creditor applies to make you bankrupt. It is important to attend the hearing if you want to try and stop a bankruptcy order being made. Contact us for advice if a bankruptcy hearing has been set and you want to defend against being made bankrupt.

Being made bankrupt without a statutory demand

In certain circumstances, for example you have an IVA that has failed, your creditors do not have to serve you with a statutory demand before making you bankrupt. If you have an IVA that has failed, or have received a statutory demand, contact us for advice.

Assets

The official receiver in your bankruptcy may be able to sell some of your assets. In certain circumstances (for example if you own a lot of valuable items) a separate insolvency practitioner may be appointed to deal with your assets. The person who deals with your assets in bankruptcy is known as the 'trustee'.

Certain goods are not treated as assets. These are things such as clothing, bedding, furniture and household equipment for basic domestic needs.

Your car may be treated as 'exempt' if the trustee agrees that you need it for your employment or if it is essential to meet the basic domestic needs of you and your family.

• If a car is exempt but valuable, it can be sold and replaced with a cheaper alternative.
• If a car is not exempt, it is likely to be sold or scrapped.

If the official receiver decides you have assets then they will usually be sold as soon as possible.

If you are discharged from bankruptcy before any assets are dealt with, they will not belong to you on discharge. Your assets will continue to belong to (or 'vest' in) the official receiver until they are dealt with.

Hire purchase agreements

There may be a clause in the hire purchase agreement that allows the hire purchase company to end the agreement if you become bankrupt. In this situation, you may have to return the item.

If your agreement is not ended, the official receiver may decide to sell the item depending upon how much is left to pay on the agreement and the value of the item. There may be some situations where you can keep an item if a third party takes over the agreement for you. In some limited circumstances, you may be allowed to keep making the payments under the agreement yourself. Contact us for advice.

Pensions

If you have one or more pensions, you may not be allowed to go bankrupt if:

• you can take money from your pension(s); and
• you can clear all your debts by taking money from your pension(s).

Usually, you cannot take money from a pension before you are 55 years old.

Can my pension be claimed as an asset in bankruptcy?

If you are not able to use a pension to pay all your debts, it will not be affected by bankruptcy in most cases. A pension may be at risk if:

• it is not approved by HM Revenue and Customs (HMRC); or
• you have made very large payments into your pension.

Most UK pensions are approved by HMRC. If you are not sure whether your pension is approved by HMRC, contact your pension provider to ask if it is registered for tax purposes under section 153 of the Finance Act 2004.

A pension that is not approved by HMRC will vest in the official receiver, but it may be possible to have some or all of the pension excluded from the bankruptcy estate. Contact us for advice if you are considering bankruptcy and you have a pension that is not approved by HMRC.

If you have made large payments to your pension, the trustee may consider whether this is unfair to your creditors because that money could have gone towards your debt. If the trustee feels the large payments were unfair to your creditors, they may ask the court to order your pension company to pay money from your pension to the trustee.

What if I am already receiving an income from my pension?

If you are getting an income from a pension, you may be asked to pay some or all of this towards your debt.

If you are getting a state pension and the only other income you receive is from state benefits, you shouldn't be asked to pay this towards your debt.

For more information on being asked to pay towards your debt when you are bankrupt, see the later section Payments from income.

Will I be forced to take my pension?

You cannot be forced to start take a pension that you have not drawn on yet. If you do choose to take payment from your pension, you may be asked to pay some or all of the payment towards your debt if:

• you have not been discharged from bankruptcy; or
• you are already making payments into an 'income payments agreement' or 'income payments order'.

For more information on income payments agreements and income payments orders, see the later section Payments from income.

Property

The value (or 'equity') in a property can be worked out by taking away from the value of the property the amount you owe under any mortgages and secured loans. We use the term 'beneficial interest' to describe your share of the equity after deducting reasonable costs for a sale.

If the property is solely owned by you, your beneficial interest will usually be based on all of the equity. If the property is jointly owned with someone else, your beneficial interest will be based on part of the equity.

If you own property then this might be sold depending on whether it has any equity in it. If you or your spouse and any children live there then there are rules about how quickly this can happen. Contact us for advice. Once you have gone bankrupt, your beneficial interest in your home is transferred to the official receiver or trustee.

If you are the sole owner then the whole of the value in the property is transferred to the official receiver or trustee.

With jointly owned property the official receiver or trustee is usually only entitled to the bankrupt person's share of the equity (that is their 'beneficial interest').

Depending on your circumstances, you may be considered to have a beneficial interest even if you are not named on the mortgage. This is a complex area so contact us for advice.

It may be possible for the joint owner or family and friends to make an offer to the official receiver or trustee to buy out your share of the equity. This can be particularly helpful if there is little or no equity.

How long does the official receiver or trustee have to deal with my family home?

The official receiver or trustee usually has a maximum of three years from when you went bankrupt to deal with your family home. However, this action may be taken before three years have passed. If you went bankrupt before April 2004 and you are now being asked to sell your family home, contact us for advice.

The term 'family home' means:

• the place where you normally live;
• the place where your spouse or ex-spouse normally lives; or
• the place where your civil partner or ex-civil partner normally lives.

Other properties (such as those you rent out) will not be dealt with under the rules described in this section. If you have a beneficial interest in a property that is not classed as your family home, such as a buy-to-let property, contact us for advice.

Within the three years, the official receiver or trustee could:

• come to an agreement with you about the property;
• sell your beneficial interest to a joint owner or other third party;
• apply for an order of possession of your home;
• apply for an order for sale of your home; or
• apply for an order to give them security over your home (known as a charging order).

If they do not deal with your home within the three-year time limit, it will automatically pass back to you.

If your beneficial interest is less than £1,000 when it is finally reviewed, no action will be taken and your beneficial interest will automatically pass back to you.

If your beneficial interest is £1,000 or more when it is finally reviewed, you will be asked if somebody you know will buy your beneficial interest to stop your home being sold. If nobody can buy your share of the home, it is possible that your home may be sold. However, if your beneficial interest is considered to be of low value, the official receiver might apply for a charging order against your home instead of selling it.

Is there a special scheme that can be used to buy back my beneficial interest?

If the official receiver is acting as your trustee and your family home is in joint names, you may be able to use a 'property conveyancing scheme' run by the Insolvency Service. This scheme helps to keep the cost of the process low.

However, you will not be able to use this scheme if:

• your property is in your sole name; or
• a separate insolvency practitioner is acting as trustee.

If you are not able to use the Insolvency Service's property conveyancing scheme, the costs relating to the process of buying your beneficial interest are likely to be a lot higher. In any case, you will need independent legal advice from a solicitor. They will charge you for their services. Any third party who wants to buy back your beneficial interest will also need legal advice. Contact us for advice on how to search for a solicitor.

What if I rent my home?

If you are up to date with your rent payments, you will usually be able to stay in your home. There could be a risk to your home if you have an introductory tenancy, a demoted tenancy or a family intervention tenancy. Contact us for advice if this affects you.

If you have rent arrears from before the date of your bankruptcy order, your landlord can still take court action to evict you from your home. However, they cannot get the arrears back from you because they are a debt that will be included in your bankruptcy.

If you build up any rent arrears after the date of your bankruptcy order, your landlord can take action to evict you and get the arrears back.

When the official receiver works out whether you should pay anything from your income, you may be allowed to continue paying towards your rent arrears to help keep your home. However, the official receiver could ask you to reduce your payments towards rent arrears if they think you are paying too much.

Payments from income

The official receiver will look at your income and expenses to see if you have any spare income (or 'surplus income') after paying for essential living expenses. Usually if your surplus income is above £20 per month, the official receiver will expect you to pay it all into your bankruptcy.

Essential expenses such as your mortgage, rent, household bills and food will be taken into account when working out what your surplus income is. The official receiver will have an opinion on what they consider to be reasonable expenses to meet the needs of you and your family. If the official receiver thinks an expense is not reasonable, you could be asked to pay that money into the bankruptcy instead. For example, if the official receiver thinks a monthly mobile phone payment provides you with more allowances than you need, they may ask for the cost of the extra allowances to be paid into the bankruptcy.

If you receive only state benefits

If your only source of income is state benefits, an income payments agreement or order should not be made.

Income payments orders and income payments agreements

Most bankruptcy orders will end after one year. You may be asked to sign a legally binding agreement to pay monthly instalments from your income to the official receiver for three years from the date of the agreement. This is called an 'income payments agreement' (IPA). If your circumstances change you need to tell the official receiver, as the agreement can be looked at again. If you do not pay, the official receiver can ask the court to order you to pay the instalments. This is called an 'income payments order' (IPO).

If you do not make a voluntary agreement then the official receiver can ask the court to make an IPO. This will run for three years from the date of the order. You can ask the court to look at this order again if your circumstances change.

Income tax and payments from income

Income tax on private pensions and earnings from employment is usually paid through HMRC's Pay As You Earn (PAYE) system. When you are bankrupt, HMRC will put you on a nil tax (NT) code. This will tell your pension provider or employer to stop taking income tax from your pension or wages. An NT code can be applied for different reasons, so it does not tell your pension provider or employer that you are bankrupt.

If the amount of money you get paid increases because of not paying income tax, the extra money can be claimed by the official receiver as part of an IPA or IPO.

The NT code should only be in place until:

• the end of the tax year in which you are made bankrupt; or
• you change your job, if this happens before the end of the tax year in which you are made bankrupt.

The tax year ends on 5 April.

If the NT code stays in place longer than it should, there is a risk of you building up a debt because of not paying the correct amount of tax. If you notice that an NT tax code is being used when you don't think it should be, contact HMRC. See Useful contacts.

Effects of bankruptcy

Your bank account

You will usually have to close your bank or building society account when you are made bankrupt. You may be able to open another one as long as the bank or building society allows you to. You must tell the bank or building society that you are bankrupt. You will usually have to wait to open the account until after you have gone bankrupt. It is up to the bank to decide if you can open an account with them.

Most high street banks allow undischarged bankrupts to open a basic bank account. The bank will usually check your eligibility for their current account first. If the bank decides that you aren't eligible for a current account because you are an undischarged bankrupt, they should offer you their basic bank account.

Utilities

Gas, electricity and telephone companies usually want you to pay in such a way that involves you not having credit. If you live with a partner you could transfer the account into their name. Sometimes a deposit is also asked for as security.

Insurance policies

Bankruptcy can affect some insurance policies, for example car insurance or building and contents insurance. Check all insurance policies you have to see whether bankruptcy would affect your cover. If you renew or take out a new insurance policy while you are bankrupt, you must inform the provider about your bankruptcy if you have an agreement to pay in instalments and the agreement is for £500 or more. See the later section Offences.

Immigration status

If you are applying to stay in the UK or for British citizenship, bankruptcy can impact on your immigration status. If you are concerned that this may affect you, you should seek specialist immigration advice. For information on how to find an immigration adviser, see the GOV.UK page Find an immigration adviser.

Employment

Depending on the type of job that you do, your employment may be affected. Always check your contract of employment to see if bankruptcy is mentioned. You can also ask your staff welfare officer or trade union if you are uncertain. If you belong to a professional body which does not allow you to be bankrupt, you could be struck off. For example, this may affect solicitors and accountants.

Self-employment

If you are self-employed with a business that is currently trading, bankruptcy may affect your business in various ways.

• If your business has assets which are not exempt, the official receiver is likely to decide that the assets should be sold to repay your creditors, and your business could be closed. If your business has few or no assets, you may be able to continue trading after going bankrupt.
• You are not allowed to obtain credit of £500 or more during the bankruptcy without informing the lender that you are bankrupt. You may find it difficult to continue trading if your type of work involves using credit of £500 or more. Credit can include being given time to settle bills, such as 30-day invoices.
• If you have a business lease, it may be considered as an asset. There may also be terms and conditions in the lease which means the landlord can end the agreement.

If you have a trading business and are considering bankruptcy, you should contact Business Debtline for advice. Business Debtline is our sister charity and provides self-help debt advice for small businesses. Their contact details are in the later section Useful contacts.

Creditor letters

Under the rules in the Consumer Credit Act 1974, your creditors will usually have to keep sending you annual statements, as well as arrears and default notices in a set format. This will happen even when you are bankrupt but should stop once you are discharged. Don't worry; this does not mean that there is a problem with your bankruptcy. If you receive other letters demanding payment, you should take this up with the official receiver and contact us for advice.

Obtaining credit

Even after the bankruptcy period you may find it difficult to obtain credit. The bankruptcy order will be registered with credit reference agencies for at least six years. Even after this time you may be asked whether you have ever been bankrupt, when applying for some credit, particularly a mortgage. Details of your bankruptcy are also kept on the Individual Insolvency Register for three months after the date of your discharge from bankruptcy.

Gazette advert

Details of your bankruptcy are usually published in an official public record called 'The Gazette'. Your bankruptcy details will not usually appear in your local paper. However, the official receiver can decide to advertise if, for example, they think you have not told them about all your assets.

Offences

Whilst you are bankrupt it is a criminal offence to:

• take out credit of £500 or more without telling the lender you are bankrupt;
• use a new business name without revealing the name you were made bankrupt under;
• act as a director of a limited company without permission; or
• act as an insolvency practitioner.

Limited company directors

A limited company will be dissolved if it has no director. If you want to go bankrupt but do not want the company dissolved, you may need to appoint another director in your place. If the company has more than one director, you should resign before going bankrupt. If you are a company director and want to go bankrupt, contact Business Debtline for further advice. You can find their details in the Useful contacts section towards the end of this guide.

Bankruptcy restrictions orders

You will usually be discharged from bankruptcy after one year. See the later section, Discharge. The court has the power to make a bankruptcy restrictions order against you if the official receiver feels your behaviour has been dishonest in some way, or if there has been 'unfit' conduct.

Unfit conduct can include:

• not keeping records that could explain a loss of money or property;
• gambling;
• trading whilst you knew you couldn't pay your debts;
• causing your debts to increase by deliberately not managing your business properly;
• taking out credit which you knew you couldn't repay;
• giving away your assets or selling them at less than their value to avoid them being included in the bankruptcy; and
• paying some creditors rather than others.

A bankruptcy restrictions order means you are not allowed to:

• apply for credit of £500 or more without telling the lender about the order;
• continue to run a business in a different name from the one in which you were made bankrupt, without telling those you want to do business with the name under which you were made bankrupt;
• become an MP or local councillor;
• be a director of a limited company or form a new limited company without permission; or
• be an insolvency practitioner.

Discharge

You will be automatically discharged from your bankruptcy after one year, whatever you owe. If you applied for bankruptcy online you should get a letter from your official receiver to confirm that you have been discharged. If a creditor made you bankrupt and you need proof that you have been discharged, you need to apply to court and pay a fee for a certificate of discharge. Contact us for advice.

You can also apply to have your bankruptcy 'annulled' (that is, cancelled). This can be done for example, if you have paid all the debts and expenses of the bankruptcy in full, or you can show that a bankruptcy order should never have been made. If you want further information on these points, contact us for advice.

Which debts do I still have to pay after bankruptcy?

Although you will be released from liability to pay most of your debts once you are discharged, there are exceptions to this. Even after discharge you will still be personally liable for:

• magistrates' court fines;
• student loans;
• arrears of maintenance or maintenance payments ordered by a court;
• Child Support Agency and Child Maintenance Service arrears;
• debts you built up through fraud; and
• debts you owe as a result of a personal injury claim against you.

This is not a complete list of the debts that you will still have to pay after your bankruptcy ends. Contact us for advice.

Alternative solutions

Individual voluntary arrangements

An individual voluntary arrangement (IVA) is a formal arrangement to repay your creditors part of what you owe and can be a way of avoiding bankruptcy. You need to be able to raise a lump sum to pay the creditors or be able to make regular payments from your income to your creditors.

• An IVA will usually last for up to five years. If you do not keep to the arrangement, the insolvency practitioner or your creditors can apply to make you bankrupt instead.
• To arrange an IVA you need to find an insolvency practitioner prepared to work for you. The insolvency practitioner prepares a proposal to put forward to your creditors. If more than 75% by value of voting creditors accept the proposal, then the IVA is put in place.
• Insolvency practitioners' fees can be expensive and they may want some payment in advance. It is worth asking them for an initial free meeting to discuss whether an IVA is appropriate.

If you are interested in setting up an IVA, contact us for advice. We may be able to refer to an insolvency practitioner who will not charge any up front fees. We will be able to discuss an IVA with you, as well as advising you on what other solutions there are for dealing with your debts.

Debt relief orders

A debt relief order (DRO) is a way of dealing with your debts if you have a low surplus income and few assets. A DRO may be able to help you if meet the following rules.

• You do not own your home.
• Your total assets are worth £2,000 or less.
• You have £75 a month or less spare income to pay your creditors.
• Your total debts are £50,000 or less.

If your DRO application is successful then most of your creditors will be unable to take action to recover your debts for 12 months. The debts are then written off after the 12 months are up.

See our Debt relief orders guide for more information.

Informal arrangements and debt management plans

If bankruptcy or an IVA are not suitable solutions, you may be able to make informal arrangements with your creditors. Contact us for advice on how to negotiate payment arrangements with your creditors. If you would like an organisation to act on your behalf to negotiate affordable payments, you might want to consider a free debt management plan (DMP). This is a repayment schedule for unsecured debts.

Useful contacts

Business Debtline Phone: 0800 197 6026 (9am – 8pm Monday to Friday) www.businessdebtline.org

HM Revenue & Customs (HMRC) Phone: 0300 200 3300 www.gov.uk

The Individual Insolvency Register Online search through the Insolvency Service website. www.insolvencydirect.bis.gov.uk/eiir/

The Insolvency Service The Government agency that deals with bankruptcy. Phone: 0300 678 0015 www.gov.uk/government/organisations/insolvency-service

Other guides that may help you

Debt management plans guide
Debt relief orders guide
Individual voluntary arrangements guide
Statutory demands guide
Ways to clear your debt guide

Use this guide to:

• check whether you may be able to go bankrupt in England or Wales if you live abroad;
• understand what is likely to happen after you go bankrupt;
• understand the effect that a bankruptcy order in England or Wales may have on you abroad; and
• see if your creditors may still be able to take action against you abroad after you have gone bankrupt in England or Wales.

Bankruptcy in England or Wales if you live abroad

If you live outside of the UK, you may be able to go bankrupt in England or Wales in some circumstances.

You cannot apply to become bankrupt in England or Wales if you live in Scotland or Northern Ireland.

When you apply to make yourself bankrupt, your application is decided by the adjudicator. The adjudicator may make the bankruptcy order if your ‘centre of main interests’ is in England or Wales. Your centre of main interests is usually considered to be the country where you mainly live or earn your living, and in which people would expect to find you.

If your centre of main interests is not in England or Wales, you may still be able to go bankrupt in England or Wales if any of the following applies to you.

• Your centre of main interests is in an EU member state (except Denmark) and you have carried on business in England or Wales in the three months before applying for bankruptcy.
• You have either carried on a business, been ordinarily resident or had a place of residence in England or Wales in the three years before you apply for bankruptcy. You may be considered to have been resident or had a residency in England or Wales if you can show that you were settled or had your usual home there. Temporarily living in somebody else’s home with their permission may not count as a residence.
• You are domiciled in England or Wales. ‘Domiciled’ is a complicated legal term. It generally relates to the country that the law considers to be your permanent home. It is possible to be domiciled in England or Wales even if you have lived abroad for many years.

You may need legal advice on whether the adjudicator will be able to make you bankrupt in England or Wales. Contact us for advice about how to find suitable legal help.

A bankruptcy order granted in England and Wales will not automatically be recognised abroad and creditors may still take action against you in the country you are living in. For more information, see the later sections How your bankruptcy is viewed abroad, Assets abroad and Foreign creditors.

How to apply

You must apply online at www.gov.uk/bankruptcy. It costs £680 to submit your application. Your application will be sent to the adjudicator at the Insolvency Service. They will check that you cannot pay your debts as they fall due and that England or Wales is the correct place for you to go bankrupt. This means that if you do not meet the criteria described in the earlier section Bankruptcy in England or Wales if you live abroad, your application will be refused. The adjudicator will usually make their decision within a maximum of 28 days of receiving your application. You do not have to go to a court hearing.

If the adjudicator refuses to make a bankruptcy order, they will send you a notice to tell you this. This is called a 'notice of refusal'. This notice must tell you why the adjudicator did not make you bankrupt. You can ask the adjudicator to review their decision, but you must do this within 14 days of the notice of refusal being delivered. You must give reasons for asking the adjudicator to review their decision, but they can only consider the information you provided with your original application. You cannot provide them with any new information. If the adjudicator still does not make you bankrupt, they must send you a notice to confirm this.

You can appeal to the court against the adjudicator’s final decision. You must do this within 28 days of getting the notice which confirms the adjudicator's decision following your request for a review. If you want to appeal to the court against the adjudicator's final decision, you will need extra help. Contact us for advice about finding the type of help that you need.

If your bankruptcy application is unsuccessful, you will be refunded £550 of the fee that you paid when you submitted your application.

After bankruptcy

After a bankruptcy order has been made, you will need to provide the official receiver with further information. The official receiver manages the administration of your bankruptcy. You may be asked to complete further forms or provide certain documents. The official receiver may ask you to attend their office for an interview. In some situations, they may agree to interview you over the phone.

The further information that the official receiver may require cannot be provided before a bankruptcy order is made, and you cannot pre-book an appointment for the interview. However, if you explain your circumstances to the official receiver, for example that you are only in the country for a limited period, they may try to arrange an appointment for you as soon as possible. Alternatively, they may agree that the interview can take place over the phone. You must provide any information that the official receiver asks you for. If you cannot do so, think carefully about whether bankruptcy is the right solution for you. Contact us for advice.

The trustee in your bankruptcy will take control of your assets and contact your creditors. The trustee will either be the official receiver or a separate insolvency practitioner.

How your bankruptcy is viewed abroad

If you go bankrupt in England or Wales and live or move abroad, you may need to apply to a local court to have your bankruptcy recognised in that country.

Whether your bankruptcy can be recognised in another country depends upon whether that country has any agreement about this with the UK. If there is no agreement in place and that country does not recognise your bankruptcy, your creditors could try to take action against you in that country.

The bankruptcy order made in England or Wales could also lead to other implications for you if you live or move abroad. You should seek legal advice in the country that you live in or intend to move to about the effects of a bankruptcy order made in England or Wales. Contact us for advice about how to find suitable legal help.

Previous bankruptcy rules

If you have previously been made bankrupt under an order made before 11pm on 31 December 2020, the bankruptcy should be recognised by other EU member states (except Denmark). This means that creditors will not be able to take action against you in these countries to recover debts that were included in the bankruptcy. However, the bankruptcy could still result in there being restrictions placed on you in a foreign country that you live in or move to. Seek advice in that country about any possible restrictions and what they are likely to be.

Assets abroad

All your assets transfer to your trustee in bankruptcy after the bankruptcy order is made. In most cases, this applies wherever the assets are in the world.

The trustee may find it difficult to sell assets that you have abroad. This is because the other country may not recognise their authority. This may mean that the trustee has to take legal action if they want to deal with those assets.

You may need legal advice about the effect of bankruptcy on your assets abroad. Contact us for advice about how to find suitable legal help.

Assets in the EU and previous bankruptcy rules

If you were made bankrupt under an order made before 11pm on 31 December 2020, your trustee should be able to deal with any assets you have in the EU (except Denmark).

Foreign creditors

If you go bankrupt in England or Wales, the following points apply.

• All of your qualifying creditors in the world will be included. This means that they cannot take action against you in England or Wales to recover the money you owe. A ‘qualifying creditor’ is a creditor that is owed a debt which gets included in bankruptcy. Some debts are not included in bankruptcy, for example debts taken out by fraud.
• Creditors may still try to take action against you in countries outside of England or Wales.
• If you have any assets abroad, creditors may be able to take action that puts those assets at risk.

This is a complicated area. You may need specialist legal advice. We may be able to help you find suitable legal advice. Contact us for advice.

Creditor action and previous bankruptcy rules

If you were made bankrupt by an order made before 11pm on 31 December 2020, creditors will not be able to take action against you in the EU (except Denmark) for a debt that was included in the bankruptcy.

Other solutions

Bankruptcy is a serious solution. Consider it carefully before deciding whether to apply. There are both advantages and disadvantages to take into account when deciding. It is also important to get debt advice about all of the solutions available to you to deal with your debts. Contact us for advice on the different ways to deal with your debts.

Use this guide to:

• understand why you may have a benefit overpayment;
• know how you may be able to appeal an incorrect benefit overpayment decision;
• see what options you have to deal with a benefit overpayment; and
• know how the overpayment may be recovered.

What is an overpayment under the Universal Credit system?

A benefit overpayment is money owed as a result of being paid too much benefit. Universal Credit overpayments will be owed to and collected by the Department for Work and Pensions (DWP).

Overpayments may occur for a variety of reasons, for example:

• the benefits office made a mistake;
• the information you gave may have been incorrect; or
• you didn't inform the benefit office of a change in circumstance which would have meant your benefit would reduce or stop.

An overpayment under the Universal Credit system will be an overpayment of Universal Credit, New Style Jobseekers' Allowance (New Style JSA) or New Style Employment and Support Allowance (New Style ESA).

If you received a Universal Credit Advance but no longer receive Universal Credit, any money you owe will also be recovered as though it is an overpayment of Universal Credit.

The DWP will contact you to inform you of an overpayment. If you don't think the overpayment decision is correct you can challenge it. If the money is owed you can usually try to negotiate repayments at an affordable amount.

If you have been overpaid, the DWP will be able to recover the overpayment regardless of the cause of the overpayment. So, even if the DWP made a mistake in how much they paid you, they can still look to recover the money.

However, if you think you were entitled to the amount received, you can appeal the overpayment decision. See the Mandatory reconsideration section.

Knowing whether an overpayment decision is correct can be difficult to work out. If you do not have enough information to be sure that you were overpaid, you can ask for a written statement of the reasons for the overpayment. You must do this within one month of the overpayment decision. If you are still unsure if the money is owed, you should contact a benefit adviser to help you.

Mandatory reconsideration

You can appeal against a decision that you have been overpaid, or the amount of the overpayment, by asking for a mandatory reconsideration. The request should be made within one month of being given the decision. This is called an 'any grounds' revision where the DWP will look again at your circumstances when the decision was made.

If you have requested a statement of reasons for the overpayment, the period of time you have to apply for a mandatory reconsideration will be extended to:

• one month and 14 days of being given the decision, if the statement is provided within one month: or
• 14 days of receiving the statement if it has not been provided within one month period.

You can make a mandatory reconsideration request through your online journal. Explain in your journal why you think the decision is wrong and provide any new information that will support your case. You should also phone the Universal Credit helpline on 0800 328 5644 to tell them you have done this.

If your Universal Credit claim has closed and you no longer have a journal, you'll need to call the Universal Credit helpline on 0800 328 5644, or you can send a mandatory reconsideration request form from the GOV.UK website to the address on the decision letter. (This can also be done for late applications, see the following section about Late mandatory reconsideration requests).

After making a mandatory reconsideration request, you will receive a mandatory reconsideration notice which will tell you the outcome. If you believe the decision the DWP has made is incorrect, you can appeal to the First-tier Tribunal. See the First-tier Tribunal section below.

The DWP will usually continue trying to collect the debt during the mandatory reconsideration process.

Late mandatory reconsideration requests

If you are outside the one month application period, you may still be able to apply for a mandatory reconsideration within 13 months of being notified about the decision. You need to show that there were special circumstances which meant you couldn't apply in time.

If a late request within 13 months is refused, it will still count as a mandatory reconsideration request, so you can still appeal to the First-Tier tribunal (see the First-Tier tribunal section).

If it has been more than 13 months, you'll need to show that the DWP has made a mistake to be able to apply for a mandatory reconsideration. This could be that they got the law wrong or overlooked some evidence you may have sent them. This is called a 'specific grounds revision.' You should speak to a benefits adviser to make sure you have grounds to make a request after 13 months.

If a late request after 13 months is refused, the DWP may say that it hasn't counted as a mandatory reconsideration request and so you have no right to appeal to the First-Tier tribunal. You may consider writing to the First-tier Tribunal to argue that the DWP has considered the mandatory reconsideration request and so you are able to appeal. You should contact a benefits adviser if you are considering this.

First-tier Tribunal

If you believe the decision the DWP has made is incorrect, you can appeal to the First-tier Tribunal. You must be able to evidence to the first-tier Tribunal that the DWP has considered you mandatory reconsideration application. Send a copy of the mandatory reconsideration notice to the Tribunal when you appeal.

If you have not received a mandatory reconsideration notice, remind the DWP that this needs to be done even if they believe your claim is not valid. If you are still unable to obtain a mandatory reconsideration notice, you could still consider appealing to the First-tier Tribunal, but you would need to provide evidence that an application was made. The tribunal will decide whether the evidence is sufficient for them to consider your case.

Also supply any documents that support your appeal that have not already been supplied to the DWP, and a summary of why you think the DWP decision is wrong.

• You can request to attend the hearing when you make the application if you wish.
• The tribunal must deal with the case fairly and justly.
• The tribunal can ask you or the DWP for further information to help them make a decision. It is important to respond to any request or your appeal could be struck out.
• You can have a representative who can help present your case to the tribunal. You would need to give the tribunal written notice of this at least 14 days before the hearing.

Time limits

You must make the appeal no later than one month after the date you have been sent the mandatory reconsideration notice.Applications after one month can still be treated as being in time if neither the DWP nor anyone who has been added to the appeal objects. It is not common for the DWP to object, so it is worth making an application even if late. Explain why your application is late when you apply.

Decision notice

You will receive a decision notice; this will detail the tribunals decision and the reasons for it. If you have won, the DWP should carry out the tribunal's instructions straight away.

If you lose, you may be able ask for a set aside on procedural grounds but only if it is in the interest of justice to do so. You may also be able appeal to the Upper Tribunal. You'd need to be able to show that there has been an error of law. Speak to a benefit adviser before considering either option.

More information on the First-tier Tribunal process can be found on the GOV.UK website.

Fraud and civil penalties

The DWP may say you have committed fraud if you failed to tell them about something that would affect your claim or if you deliberately misrepresented information. If you are accused of fraud, you should seek legal advice as soon as possible.

You should have a formal interview 'under caution' and will be given around two weeks' notice. Use this time to try and find someone, preferably a solicitor, to sit in the interview with you.

The DWP may ask for additional information. If you do not provide this, your benefit payments may be stopped. Your benefit may also be stopped whilst the investigation takes place.

If you are found guilty of fraud, you may be prosecuted. Again, if it looks like this may happen it is important to get legal advice on your options.

If you haven't committed fraud but the overpayment has been caused because you gave an incorrect statement or incorrect information and did not try to correct the error, you may receive a civil penalty. The overpayment will also need have occurred after 1 October 2012 and be more than £65. The civil penalty would be added to the overpayment and recovered in the same way.

DWP discretion to suspend or reduce repayments

The DWP can agree to suspend recovery or reduce your repayment amount. However, this will usually only be done if you can show that the rate of recovery will cause you or your family hardship.

This hardship could be based on:

• Welfare grounds;
• Health grounds; or
• Financial grounds.

You can use our sample letter to ask the DWP to suspend recovery or reduce the repayment amount. You'll need to provide as much information as possible to support your request. For welfare or health considerations, this could include:

• a letter showing exactly how recovery of the debt would have a very negative impact on the welfare of you and your family; and
• a letter from a medical professional showing that your ill health is being made worse or caused by financial hardship. For example, a GP, consultant, psychiatric nurse, support worker or welfare advisor might write a letter for you.

For financial considerations, this could include:

• a copy of your budget sheet to show that the deduction amount is causing you financial hardship; and
• specific examples in the letter that show the difficulties the deductions are causing. This could be that you are having to cut back or are unable to afford essentials such as energy or food. It could be that you are unable to pay your rent in full and could be at risk of eviction. Try to give as much detail as you can.

You can make an initial request through your UC journal if you have one or write to the address on the letter you’ve received. It may be useful to find a specialist benefits adviser who can help. You can try find one on the Turn2us Find an Adviser tool.

If a suspension or reduction is not agreed, you do not have the right to appeal. However, if you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help further. You could also look to complain to the DWP. See the Complaint section for more information.

DWP Discretion to waiver (write off)

The DWP can agree to waiver (write off) the overpayment. However, this will usually only be in exceptional circumstances where recovery action will result in severe welfare issues for you or your family.

The DWP will also look into the circumstances of the overpayment. It may be in your favour if the overpayment was the result of a DWP error rather than because you gave incorrect information or didn't give them relevant information.

The DWP should consider:

• your financial circumstances and those of your household;
• whether the recovery of the debt is impacting your health or that of your family;
• whether you can demonstrate that you did not benefit from the money that was paid; and
• any other factor which appears relevant to the decision maker, or which indicates recovery would not be in the public interest.

You can use our sample letter to ask the DWP to waive your debt. Provide as much information as possible to support your request. This should include the following.

• Any evidence that the overpayment was not caused by you and any steps you took to prevent the overpayment. This may include details of information you provided to the DWP and when.
• A list of all your debts and the steps taken to manage these.
• Full details of your income and expenditure.
• Bank statements for the last six months.
• Evidence of exactly how recovery of the debt would have an excessive negative impact on the welfare of you and your family.
• Evidence that your ill health is being made worse or caused by financial hardship in the form of a letter from a medical professional. For example, a GP, consultant, psychiatric nurse, support worker or welfare advisor.

You can make an initial request through your UC journal if you have one, or write to the address on the letter you’ve received. It may be useful to find a specialist benefits adviser who can help. You can try find one on the Turn2us Find an Adviser tool.

If a waiver is not agreed, you do not have the right to appeal. However, if you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help further. You could also look to complain to the DWP. See the Complaint section below for more information.

Complaint

If you are unhappy about the service you have received from the DWP, you can use the DWP’s complaint procedure. Contact the office that dealt with the decision and make the complaint. You can find relevant details to contact on the GOV.UK website.

The complaint should be dealt with within 15 working days. If you are not satisfied with the outcome, ask that the complaint is passed to a senior DWP manager.

If you are still not satisfied with the outcome, you can escalate the issue to the Independent Case Examiner within six months. This can be done by phone on 0800 414 8529 or by writing to: The Independent Case Examiner, PO Box 209, Bootle L20 7WA.

If you are still unhappy, you could ask your MP to refer the case to the Parliamentary and Health Service Ombudsman.

The Parliamentary and Health Service Ombudsman deals with complaints about maladministration and delays by the DWP. You can begin a complaint by completing the online form and sending this to your MP. You need to do this within one year of becoming aware of the matter.

Recovery

Deductions from Universal Credit

Overpayments can be recovered from most benefits. As you are under the Universal Credit system deductions tend to be 15% of your standard allowance.

Your standard allowance is the basic amount your household will receive each month before any additional payments are added for things like childcare.

If the amount being recovered is causing financial difficulty, you should use your budget sheet to support asking for the amount to be reduced.

You should have no more than three deductions from Universal Credit at any one time and a maximum of 15% of your standard allowance can be taken.

Direct earning attachment

Overpayments can also be recovered from your wage via a direct earnings attachment.

You and your employer will be sent a notice setting out how much will be deducted. The deduction will be a percentage of your net income (your pay after tax and deductions have been taken). You can find the amount you should have deducted on the GOV.UK website.

If the amount being recovered is causing financial difficulty, you should use your budget sheet to support asking for the amount to be reduced. The DWP Benefit Overpayment Recovery Guide states that a reduced payment can be considered if it is causing you hardship.

You should not be left with less than 60% of your net earnings. This is called the 'protected earnings proportion'.

Court action

Whilst not common, the DWP can look to take you to court to get a county court judgment (CCJ). This would usually only be done if you are no longer claiming benefits and you cannot agree a repayment plan.

See our Replying to a County Court Claim guide.

Time limit for recovery

If a debt is barred under statute, it means that by law (the Limitation Act), the lender has run out of time to take court action to try and make you pay the debt.

For benefit overpayments, time starts to run from the date a final decision was made to recover the debt. Once the limitation period is running, the debt will normally be statute-barred if:

• the DWP has not already started a county court claim for the debt; and
• you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years; and
• you have not written to the DWP admitting you owe the debt during the last six years.

However, it will still be possible to recover the overpayment from benefits or wages as the DWP do not have to go through the courts to do this

Useful contacts

GOV.UK for information on finding legal advice www.gov.uk/find-legal-advice

Independant Case Examiner Phone 0800 414 8529 www.gov.uk/government/organisations/independent-case-examiner

The Parliamentary and Health Service Ombudsman Phone 0345 015 4033 www.ombudsman.org

Turn2us for information on finding a benefits adviser https://advicefinder.turn2us.org.uk/

Universal Credit helpline Phone 0800 328 5644

Other guides which may help you

Breathing space guide

Replying to a County Court Claim

Use this guide to:

• find out what a bill of sale is and how it works;
• understand what options you have if you fall behind with payments on a credit agreement secured by a bill of sale;
• find out if the bill of sale is valid; and
• help you to challenge the lender's right to take the goods.

How a bill of sale works

A bill of sale agreement uses a car or other goods as security for a loan. It is sometimes called a log book loan when a car is used for security. The lender will own the goods until the loan has been paid off. If you do not keep up to date with payments, the lender can take and sell your goods. They do not have to go to court to do this.

You cannot sell goods that are secured by a bill of sale agreement because you do not own them until the debt has been paid off.

Before taking out a bill of sale, the lender should give you the key facts about the agreement, so that you can understand the kind of agreement you are taking out. They should also give you a Customer Information Sheet. This describes what a bill of sale is, how you can expect the lender to behave and your responsibilities. When taking out a bill of sale agreement, the lender should give you both the bill of sale document and the credit agreement at the same time.

CCTA code of practice

Most lenders who offer bill of sale agreements are members of the Consumer Credit Trade Association (CCTA). The CCTA has a code of practice on its website covering bills of sale. Members of the CCTA should follow its rules about how to treat you. The code sets out what information they must give you about the agreement and the lender's obligations. Lenders should make sure that you can afford the agreement and that you understand the risks involved in a bill of sale agreement.

The main points of the code are outlined below.

• If you are in arrears you may be able to hand over the car in full settlement of the debt. If so, you will not have to pay any more money, even if the value of the car does not cover the amount you owe. [4.8.11]
• The lender must register the bill of sale with a reputable vehicle registration organisation within 24 hours of making the agreement, so that anyone who might buy the car can check whether it has a bill of sale registered against it. [3.14]
• Before you sign the agreement, the lender must tell you about any charges that they will add if you miss payments. These charges must only be enough to cover the lender’s costs. [4.8.4]
• If you get into difficulty paying the loan, the lender must look at options with you to see how you can repay the debt. The lender should only repossess the car if they cannot agree a repayment arrangement with you to clear the arrears. [4.8.6]
• Lenders should not take your car away unless you owe an amount equal to at least the last two monthly payments . If you are paying weekly, they should not take your car away unless you owe an amount equal to the last four weekly payments . [4.8.7]
• If a money adviser is helping you, the lender should hold action on your account for at least 30 days while you come to a payment arrangement. [4.7.5]
• If they take your car away, the lender should not try to sell it for 14 days . This is to give you time to make an offer to try to keep the car. [4.8.8]
• Lenders should try to sell your car for the highest possible market price. [4.8.8]
• The lender can ask the court to secure any debt left after the car has been sold to your home through a 'charging order'. If the lender gets a charging order, they will not use it later to try to force a sale of your home to recover the money you owe them. [4.8.10] See our Charging orders guide for more information.
• Balloon payments should only be offered to business customers who can show they will have funds to make the final repayment. [4.2.2]

If you feel a CCTA member did not follow the code when giving you a loan, see the later section How to complain .

Balloon payment

A balloon payment is the final payment to pay off the loan. It is usually larger than the regular payment. A balloon payment should only be offered by a CCTA member as an option if the loan is mainly or entirely for business purposes. These kind of agreements should not last longer than 12 months and the lender should check how you are going to afford the balloon payment.

Missed payments

If you miss payments, there is a risk that the goods will be repossessed and sold to pay the debt unless you can come to a payment arrangement with your lender. The lender does not have to go to court to repossess the goods. You can still negotiate with the lender to stop this happening. See the later section Keeping the goods .

If the lender has ended the agreement, they do not have to take you to court before they can take the car. They will be able to take your car if it is parked on the road. Check the terms and conditions of your agreement to see if there is any section that states the lender can take the car from a locked garage. If it does, the lender might break into your garage to take your car away.

The lender could also apply to court for a 'return of goods' order if you do not return the car when asked to do so. If you ignore a return of goods order, the lender can ask the court to use bailiffs to remove the car instead.

Ending the agreement yourself

You may be able to end the agreement yourself if the lender has not already issued a default notice. If you are currently up to date with the agreement and the lender is a member of the CCTA, you may be able to hand the goods back and not owe any further money, as long as the goods are in a reasonable condition. It is a good idea to take photos to record the actual condition of the goods when you return them. However, if you are not able to end the agreement and you do owe money to the lender, you can treat this as a non-priority debt if the goods have been repossessed.

When the lender can take the goods

Before your lender can end the agreement and take your goods, they must send you an arrears notice and a default notice under the Consumer Credit Act 1974 . The default notice gives you 14 days to make up any missing payments. If the lender is a member of the CCTA, they must follow two rules from their code of practice before taking the goods back.

• They must try to reach a realistic repayment agreement with you.
• You must also have missed paying an amount equal to the last two monthly payments (or the last four weekly payments if you pay weekly).

When the goods are taken and sold

The lender must wait a minimum of five days before selling the goods. If the lender is a member of the CCTA, they must wait 14 days before selling. CCTA members are also supposed to try to get the highest market price for the goods. If you still owe money to the lender after the sale, you can treat this debt as a non-priority debt and make an offer of payment using your budget. See our self-help pack for advice on how to do this. You may find the Pro-rata offers sample letter in our sample letters suite helpful. If the lender does not accept your offer, they can apply for a county court judgment for the amount you owe.

See our guide Replying to a County Court claim form for more information.

Challenging charges

You may be able to challenge any extra charges if you feel they are too high, or if they are different to what you were told about when you took out the agreement. Get legal advice if you decide to challenge charges in court. If you are unsuccessful, you might have very high extra court costs added to your debt. See the later section Pro bono legal advice for information about where to get legal help.

Keeping the goods

You will need either to make an arrangement to pay off the arrears to keep your goods or find a way to stop the lender repossessing your goods.

Making an offer to repay arrears

Section 4.7.3 of the CCTA code states that members should be sympathetic and positive when dealing with people in financial difficulties. You may be able to get the account suspended for 30 days if you can show you are in contact with a debt adviser who is helping you to work out a repayment plan.

Use your budget to show what you can afford and make sure you pay what you can. It is likely that the lender will want you to pay your contractual monthly payment plus an additional amount on top to start reducing the arrears. Your lender may agree to lower payment if the amount you owe will still be cleared within a reasonable time.​

The terms and conditions of your agreement should include information on what extra charges the lender can ask you to pay. You may be able to challenge extra charges if you feel they are too high, or if they are different to what you were told about when you took out the agreement. Get legal advice if you decide to do this. If you challenge charges in court and you are unsuccessful, you might have very high extra costs to pay. See the later section Pro bono legal advice for information about where to get legal help.

Preventing recovery of the car

If you cannot get the lender to agree a repayment arrangement with you, you have several options to try to stop the lender taking your car.

• You can check to see if the bill of sale is in the required form. If it is not, the lender has no right to take the car. See the later section Checking a bill of sale agreement .
• You can apply through the High Court to strike out the bill of sale from the register. You will need legal support to do this. If you are successful, the lender will not have the right to take the car away. See the later section Striking the bill of sale from the register.
• You can apply for an injunction through the County Court to stop the lender taking the car. You will need legal support to do this. See the later section Applying for an injunction. See our Time orders on a secured debt guide for more information.
• You can apply for a time order to give you more time to pay in the County Court on an N440 form. You may have to pay a large court fee to make the application. If successful, the court can reschedule and reduce your payments, as well as stop the lender from taking the car away. This is a complicated application and you may need legal support, since there may be extra court costs added to the debt if you are not successful. If you would like to know more about this option, contact us for advice.

Checking a bill of sale

A bill of sale needs certain items included in it, set out in the correct way, in order for it to be effective. If they are missing or wrong, the bill of sale will not have been made properly. This means that the lender will not have the right to take the goods away, even if you are not up to date with the payments.

Check the content

Consideration

The 'consideration' is the total amount of money the lender gave you. This is also known as the 'amount of credit'. Some lenders use the 'amount of credit' figure from the agreement. You should check that this figure is just the money loaned. If the figure is different, because it includes extra things like interest, it will mean the bill of sale is not stating the correct amount.

Schedule of items

This should set out the goods that the bill of sale is secured against. It will usually include the details of your car, such as the registration number. Make sure that the information is correct.

Restatement of consideration

This must be the same figure as the amount of money the lender gave you, the 'amount of credit'. The figure should be the same as the one stated in the 'Consideration'.

Statement of interest

The statement of interest needs to be set out as a simple percentage rate. This is not the same as the 'APR' or Annual Percentage Rate. If you think that the figure is not correct, ask your local trading standards office to check it for you.

Repayment instalments

The bill of sale must set out an accurate statement of the instalments you must pay under the agreement.

Witness to the bill of sale

An agent or employee of the company must witness the bill of sale.

See the later section An example of a bill of sale for how this might look on paper.

Check the registration

The lender must register their bill of sale in the High Court within seven days of the agreement being made or it will not be valid. If the loan term is longer than five years, the bill of sale must be re-registered every five years to remain valid.

You can make a written application to the Royal Courts of Justice in London to check if a bill of sale has been put on the register. There is a fee to pay. If you go to the court, you will be charged for the time that you spend examining the register. See the Useful contacts section at the end of the guide for information about the Royal Courts of Justice.

If you think that the bill of sale is not made correctly, is not effective as a security and the lender is threatening to take your goods, you should challenge the bill of sale. Send a letter to the lender by either registered post or recorded delivery. Explain why you think that the bill of sale is not effective. Ask the lender to confirm that they understand that the bill of sale does not secure the goods. Ask the lender to confirm that they will not attempt to take your goods.

If the lender agrees that the bill of sale is not effective, ask them to confirm this in writing. You should give the lender the opportunity to tell you they will not take the goods before taking any further action through the court.

Even if the bill of sale is not valid, you will still have to repay the money you owe on your credit agreement, assuming that the credit agreement has been made correctly.

A lender can apply to register a bill of sale after the seven-day time limit. You may be able to challenge this with legal support. If you do challenge a late registration in the High Court and lose, you may have to pay very high extra costs. Contact us for advice.

Striking the bill of sale from the register

You can ask the court to remove ('strike') the bill of sale from the High Court register. We recommend that you get legal advice if you are thinking about this option. You risk having to pay for the lender's costs if you are not successful. See the later section Pro bono legal advice for information about how to get legal help.

Applying for an injunction

You can ask the court to grant an injunction to stop the lender taking your goods. This stops the lender from acting. This is a complicated application and you must get legal advice first, as you will need support to complete the process. See the following section Pro bono legal advice for information about how to get legal help.

Pro bono legal advice

'Pro bono' legal advice or representation is the name given to free legal help where you cannot afford to pay for legal help and you do not qualify for legal aid. Help is given by volunteer lawyers but none of the providers can guarantee that they will be able to help you. They have their own rules for deciding who they can help and whether they have a suitable lawyer available. The following two organisations provide pro bono help in this area.

It is worth remembering that if you do not win your case you may have very high extra costs added to your debt to cover the lender's legal expenses.

• The Bar Pro Bono Unit
• LawWorks Clinics

See the Useful contacts section at the end of the guide for more information.

How to complain

If you feel your lender is being unreasonable, or is not treating you fairly, you may wish to complain. If the lender does not deal with the complaint to your satisfaction, after eight weeks you can complain to the Financial Ombudsman Service (FOS). See the Useful contacts section at the end of the guide for contact details. Even if the lender is not a member of the CCTA, you can use the CCTA’s code of practice to identify the lender's poor behaviour because the code is industry best practice.

An example of a bill of sale

Your bill of sale document may be slightly different to this example. The words used on your bill of sale document do not have to be exactly the same. Your lender can add some extra content, but this must not change the basic bill of sale. If you would like to discuss your bill of sale agreement, contact us for advice.

This Indenture made the _ day of __ 20 between Mr A.N Other of the one part, and Jacks Cars Ltd of the other part, witnesseth that in consideration of the sum of £__ now paid to Mr A.N Other by Jacks Cars Ltd, the receipt of which the said Mr A.N Other hereby acknowledges, he the said Mr A.N Other doth hereby assign unto Jacks Cars Ltd, his executors, administrators, and assigns, all and singular the several chattels and things specifically described in the schedule hereto annexed by way of security for the payment of the sum of £, and interest thereon at the rate of per cent per annum. And the said Mr A.N Other doth agree and declare that he will duly pay to the said Jacks Cars Ltd the principal sum aforesaid, together with the interest then due, by equal payments of £____ on the first day of the month. And the said Mr A.N Other doth also agree with the said Jacks Cars Ltd that he will insure, maintain the car and keep secure at all times.

Provided always, that the chattels hereby assigned shall not be liable to seizure or to be taken possession of by the said Jacks Cars Ltd for any other cause other than those specified in section seven of the Bills of Sale Act (1878) Amendment Act, 1882.

In Witness

Signed and sealed by the said Mr A.N Other in the presence of me Mr A.N Employee of Jacks Cars Ltd, 13 High Street, Anytown, West Midlands.

Useful contacts

Bar Pro Bono Unit www.barprobono.org.uk

Consumer Credit Trade Association Phone: 0127 471 4959 www.ccta.co.uk

LawWorks Clinics National Pro Bono Centre www.lawworks.org.uk/clinics

Royal Courts of Justice Queen's Bench master's support section Royal Courts of JusticeStrandLondonWC2A 2LLPhone: 020 7947 6000 www.gov.uk

The Financial Ombudsman Service Exchange TowerLondonE14 9SRPhone: 0800 023 4567www.financial-ombudsman.org.uk

Other guides that may help you

Charging order guide

Complaining about your lender guide

Replying to a County Court claim guide

Time order on a secured debt guide

• find out if you might qualify for breathing space;
• understand how breathing space might benefit you; and
• find out which debts can be included in breathing space.

What is breathing space?

Breathing space is a government scheme which is designed to give you time to receive debt advice and find a solution to sort out your debt problems. There are two kinds of breathing space.

• Standard breathing space is where most creditors will have to stop collection and enforcement of your debts. Creditors will also have to freeze interest and charges on any eligible debts. See the Which debts can be included in breathing space? section.
• Mental health crisis breathing space can provide extra protection for people who are receiving mental health crisis treatment. You can find more information in the What is a mental health crisis breathing space? section.

Am I eligible for standard breathing space?

To be eligible for standard breathing space you need to meet the following criteria:

• you need to live in England or Wales;
• you must be unable to repay some or all your debts ‘as they fall due’;
• you must not be in a DRO, IVA or be an undischarged bankrupt; and
• you must not have had breathing space in the last 12 months.

You will need to apply for standard breathing space through an approved debt adviser. Your debt adviser must agree that:

• you need time to get debt advice; and
• you are likely to enter a debt solution.

Are you up to date with payments?

Breathing space is more likely to help if you are already behind with your payments. If you are up to date with your household bills and credit repayments and can afford them, breathing space is unlikely to be an option for you. Breathing space gives you time to get debt advice but does not give you a ‘payment holiday’ by deferring your debt payments.

If you stop making payments to your creditors, your credit file could be affected. Your account will fall into arrears and this can lead to your lender treating your account as being in default.

Overdrafts and access to credit

You need to be careful if you regularly use your overdraft or another form of credit, such as a credit card, to live on.

As all your debts must be included in breathing space, you may lose access to these lines of credit. Contact us for advice if you are concerned that losing access to credit will make it difficult to cover your living expenses.

It is also a good idea to make sure that you have a safe bank account if you need to. A safe bank account would be one with a bank or building society that you do not owe any money to. You can find out more in our Safe bank account guide.

What happens when you apply for standard breathing space?

Once you are in breathing space, all creditors who have been included will be told and they must stop any collection or enforcement activity.

If you pay any of your creditors through a direct debt or standing order, you should still cancel those that you no longer want to pay during breathing space. This is because some creditors might continue to take these payments even though you are in breathing space.

However, it is important to try and continue to pay your 'ongoing liabilities.' You can find out more about what these are in the 'Pay your ongoing liabilities ' section of this guide.

Breathing space will last for 60 days as long as you remain eligible. Once the breathing space ends, creditors will be able to collect the debt in the usual way.

During breathing space, you will need to try and decide on the best solution to deal with your debts. To do this you will need to work out what payments you can afford to pay your debts. To help you, visit our online tool and click 'Get started'. If you can't afford your payments, we'll let you know which debt solutions are suitable for you.

For more information on your possible debt solutions please see our Ways to clear your debt guide.

Once you have had standard breathing space you will not be able to have another one for 12 months .

You will be expected to meet certain requirements during breathing space. These are explained in the Requirements during breathing space section.

Creditor review

Your creditors can ask your debt adviser to review your breathing space. This could happen if the creditor felt that:

• you do not meet the eligibility criteria;
• the debt you have with them is not eligible for breathing space; or
• you have enough money to repay the debt.

Your debt adviser will carry out the review. The debt adviser can cancel your breathing space if they agree there are sufficient grounds.

If your lender is unhappy with the outcome of the review, they can apply to court to try to get your breathing space cancelled or have their debt removed.

If the court agrees with your creditor's request for review, you may be asked to pay the creditor's costs.

In some cases a creditor may be able to go directly to court to challenge whether a debt is eligible for breathing space. This would mean that the creditor doesn't follow the creditor review process. This is only likely to be possible if the creditor had taken court action before your breathing space started.

Your debt adviser will be able to give you guidance on what to do if this happens.

Your credit file and the breathing space register

Whilst you are in breathing space, creditors will report any payments you miss to the credit reference agencies in the usual way. The credit reference agency will not be told that you are in breathing space.

Individuals lenders who have been included in a breathing space may keep their own record of you having breathing space. This could mean that future borrowing with that lender might be affected.

Basic personal details, such as your name and address, will be placed on a breathing space register. However, this is not available for everyone to view. Only creditors who have had a debt included in your breathing space will be able to access the register and they will only be able to view their debt along with your details.

Although the public cannot see the breathing space register, you can still ask that your residential address is not added to the register if you believe there may be risk of violence against you or someone you live with. Discuss this with your debt adviser.

Debts in joint names

If any of the debts you have included in breathing space are in joint names, the other person named on the agreement will also be protected against enforcement action by your creditors.

However, other people who are liable for debts included in your breathing space will not be added to the breathing space register.

Not paying your debts will have an effect on the other liable persons credit file as well as your own. You may want to discuss this with the other liable person to see if they want to maintain the payments even if you cannot.

After the 60 days breathing space, creditors will be able to start collecting the debt in the usual way. If the other liable person is unable to maintain the payments, they will need to seek debt advice themselves.

It is not possible to make a joint breathing space application. The other liable person may need to make their own breathing space application if they have their own debts that they need help with.

Debts with a personal guarantor

Some creditors ask for a guarantor before agreeing to lend money or provide a service. If the person who borrowed the money or used the service doesn't pay, the creditor can ask the guarantor to pay, or to compensate them for their losses.

If somebody has given a personal guarantee for a debt you include in a breathing space, they will not receive any protection from the creditor. If you are behind with the debt repayments or the guarantor cannot keep up the payments, the creditor can still carry on with collection and enforcement activity against the guarantor.

Which debts can be included in breathing space?

Most types of debt can be included in breathing space and you are not allowed to leave any eligible debts out of your application.

If you accidentally miss an eligible debt out of your application, you can add this in later. However, it will only receive the protections until the end of the breathing space period, not for the full 60 days.

Arrears on essential bills

Arrears are payments that you have missed on your debts and household or business bills. Arrears can also include interest and charges that have been added.

You can normally include arrears on essential bills. Examples include:

• rent arrears;
• mortgage arrears;
• gas and electricity arrears;
• water arrears;
• hire purchase arrears;
• council tax and business rates arrears; and
• income tax and National Insurance arrears.

As covered earlier in the guide, whilst you can include arrears on essential bills; you will usually have to keep up with your ongoing repayments. See the Things I'll need to do in a breathing space section for more detail on what may happen if you don't pay your ongoing essential bills.

Non-priority debts

You can include all non-priority debts. Examples of debts you can include are:

• mobile phone arrears;
• credit cards and store cards;
• bank overdrafts and bank loans;
• loans to finance companies;
• catalogues;
• home-collected credit;
• family or personal debts; and
• mortgage shortfalls (money you owe if your house was sold for less than the outstanding mortgage).

Which debts can't be included in breathing space?

Some debts cannot be included in breathing space. These include:

• magistrates' court fines;
• maintenance, Child Support Agency (CSA) and Child Maintenance Service (CMS) payments and arrears;
• student loans;
• budgeting loans and crisis loans;
• money owed under a 'criminal confiscation order';
• Universal Credit advances;
• fraudulent debts;
• debts resulting from certain personal injury claims against you.

You will be expected to pay your ongoing payments to these debts, and any arrears you may have. We'll let you know how to include these on your budget sheet when you speak to us about breathing space.

Business debts

Your business debts are not eligible for breathing space if your business is registered for VAT, or you are in a business partnership with anyone else, and the debt you have relates solely to the business. It may be difficult to work out if you are eligible for breathing space. If you are self-employed contact Business Debtline.

The advantages of breathing space

• Your creditors cannot add interest or charges to an eligible debt during breathing space.
• Your creditors or collection agency cannot contact you to ask for payment towards a debt that has been included in breathing space.
• No enforcement action can be taken against you for a debt that has been included in breathing space. You can find more information about what types of enforcement you would be protected from in the Protections during breathing space section.

Protections during breathing space

Breathing space will stop creditors that can be included from starting or continuing with enforcement action against you. The protections you receive will depend on the types of debt you have and the kinds of enforcement action that are being threatened or taken.

Bailiffs (also called enforcement agents)

Bailiffs are also commonly called enforcement agents. In this guide, we refer to them as bailiffs.

• A creditor will not be able to start bailiff action against you whilst you are in breathing space.
• A bailiff is not allowed to try to take control of your goods whilst you are in breathing space.
• If a bailiff has already taken goods from your property, they will still be able to sell these. However, the bailiff cannot charge for the storage of these goods during or after the breathing space.

If a bailiff takes any action whilst you are in breathing space, show them your breathing space confirmation and contact your debt adviser for advice.

Bailiffs can be involved in collecting a variety of debts. Rules can be different depending on the type of debt they are collecting. For more information see the following guides:

County Court bailiffs guide;

High Court enforcement guide;

Council tax arrears guide; and

Penalty charge notices guide.

Court action

• A creditor will not be able to start court action against you whilst you are in breathing space.
• If a creditor has already started court action, they should not take enforcement action to try and recover money from you.
• A creditor cannot start bankruptcy proceedings against you or issue a statutory demand.

However, if a creditor has already obtained an attachment of earnings order to take money from your wages, breathing space will not stop this. For more information see the following guides:

Replying to a County Court claim guide;

Attachment of earnings orders guide;

Varying a CCJ guide;

Bankruptcy guide; and

Statutory demands guide

Your home

• If you rent your home, in most cases your landlord will not be able to start court action to evict you for rent arrears whilst you are in breathing space.
• If you have a mortgage, in most cases your mortgage lender will not be able to start court action to repossess your home whilst you are in breathing space.

You will be expected to maintain your usual ongoing mortgage or rent payments during breathing space.

For more information about dealing with arrears on your home see our Mortgage arrears guide or Rent arrears guide.

Energy

• In most cases, your energy supplier will not be able to disconnect your gas or electricity whilst you are in breathing space.
• Your energy supplier will not be allowed to fit a prepayment meter to take payments towards the debt whilst you are in breathing space.

You need to keep paying your ongoing energy bills during breathing space.

For more information about dealing with energy arrears see our Gas and electricity arrears guide.

Harassment and complaints

Creditors, including debt collection agencies, should not contact you to ask for payment whilst you are in breathing space.

If you feel you are being contacted unreasonably by your creditor, see our Harassment by creditors guide.

Some creditors will still have a legal obligation to send letters under the Consumer Credit Act 1974 such as a "notice of arrears". You do not need to reply to these letters, and you are still protected by breathing space.

If a creditor ignores the breathing space protections, tell your debt adviser. They can remind the creditor of their obligations. If appropriate, your debt adviser can tell the Insolvency Service what has happened.

You can also make a complaint to the creditor yourself and take your complaint to the relevant ombudsman if you are unhappy or don't get a response.

• For most credit debts you can take your complaint to the Financial Ombudsman Service if needed. See our Complaining about your lender guide for more information.
• For complaints about the council, you can take a complaint to the ombudsman. If your complaint is about a council in England, you can complain to Local Government and Social Care Ombudsman. If your complaint is about a council in Wales, you can complain to the Public Services Ombudsman in Wales.
• For complaints about your energy provider, you can take complaints to the Energy Ombudsman if needed.

If you are not sure who you should complain or take your complaint to, ask for a copy of the creditor's complaints process.

Third-party deductions

You may be having deductions taken from your benefits for a debt not owed to the Department of Work and Pensions, such as or energy or water arrears. These are often called third-party deductions.

• If you receive Universal Credit, these deductions will continue even if the debt is eligible for breathing space. New deductions will also be possible.
• If you receive Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Housing Benefit, Child Tax Credit or Working Tax Credit, then these deductions should stop if the debt is eligible for breathing space. New deductions will not be possible. Check with your creditor whether the deductions will stop.

You may be paying some important debts through a deduction from your benefits, such as rent arrears. Breathing space may stop the deduction. If you want to carry on making the payment, you’ll need to speak to your creditor and arrange another way of making payment.

Continuing with payments will be especially important if, for example, you have an arrangement to pay rent arrears through court. Contact us for more advice if you’re unsure about this.

You may have a third-party deduction for some ongoing payments rather than repaying a debt, these deductions can continue for rent, fuel and water. Check with your creditor if you are unsure what your deductions are for.

If you are having a deduction made from your Universal Credit to repay a Universal Credit advance, these deductions will continue as Universal Credit advances are currently not eligible debts for breathing space. See the Which debts can't be included in breathing space section for the list of debts which are not eligible

Time limits for recovering debts

If you have debts which you have not paid or talked to your creditor about for a long time, it might be the case that these debts will soon become "statute barred". This means the lender has run out of time to make a court claim to recover the debt.

See our Statute-barred debts guide for more information.

If you have a debt which is due to become statute-barred whilst you are in breathing space, the time limit for the creditor to start a court claim will be extended for eight weeks after the breathing space finishes.

If you have a debt which is soon to become statute-barred, you will need to be careful not to acknowledge the debt. It is not clear, at the moment, whether applying for breathing space is treated as an acknowledgement of the debt or not. If it is, your creditor will usually have another six years to start their court claim.

If you have a debt which you think may be statute-barred or may soon become statute-barred and you are thinking about applying for breathing space, contact us for advice.

What you must do during standard breathing space

There are some things you normally must do when you are in breathing space. Your debt adviser May contact you during breathing space to see if you are meeting these requirements.

Pay your ongoing liabilities

Whilst in breathing space you must make payments to your 'ongoing liabilities' if you can. Ongoing liabilities are generally payments that you must make and are not eligible for breathing space. Ongoing liabilities are covered in detail below

Your mortgage and/or secured loan payment

You will need to keep paying the contractual monthly payment on your mortgage or other secured lending on your home. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.

Your rent or lease payment on your property

You will need to maintain the contractual monthly payment on the rent or lease on your property. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.

Council tax and business rates

If your council tax bill or business rates are still being paid in monthly instalments, you must try to continue to pay these. If your council has issued a reminder notice or the bill for the whole year has become due, you do not need to continue to make payments. Speak to your debt adviser if you are unsure about whether you need to continue with payments.

Water, electricity, gas and other fuel

You should continue to pay ongoing usage for your energy and water supplies. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.

Taxes, duties and National Insurance contributions

If you need to pay your own taxes, duties and National Insurance contributions, you will need to keep paying these.

• If you are employed, income tax and National Insurance will be taken from your wages as normal.
• If you are self-employed, you'll need to contact Business Debtline. If you have arrears, they can discuss the best way to deal with these.

  Insurance agreements

If you have any insurance agreements such as life insurance or contents insurance, you will need to keep paying these.

Inform your debt adviser of any change in your circumstances

You will need to inform your debt adviser of any change in your circumstances such as a new job or a change in your income.

Taking out more credit

You must not borrow more than £500 when you are in breathing space.

Keep in touch with your debt adviser

Your debt adviser will want to know that you are taking steps to resolve your debt situation whilst in breathing space. It's important to try to keep in touch as this is part of the requirements of breathing space. This could include replying to an email, phone call, or seeing your adviser face-to-face.

How to apply for standard breathing space

You will need to speak to a debt adviser to be considered for breathing space. We are able to apply for breathing space for you. If it appears that breathing space may be a good option and you wish to apply, we will need the following information:

• your name;
• your date of birth;
• your usual residential address; and
• details of who you owe money to.

If you are self-employed, we will also need the trading name of your business and the address of your business, if there is one.

It would be useful to have as much information about each debt as possible. This includes:

• the creditor's address;
• the account or reference number; and
• details of any collection agency or enforcement agent collecting the debt.

What is a mental health crisis breathing space?

You can only get a mental health crisis breathing space in very limited situations. A mental health crisis breathing space provides protection from creditors for people who are struggling with debts and who are also receiving mental health crisis treatment. Someone is classed as receiving mental health crisis treatment if they are:

• detained for assessment or treatment under the Mental Health Act 1983;
• removed to a place of Safety under the Mental Health Act 1983; or
• receiving crisis, emergency or acute care or treatment in any setting from a specialist mental health service. (this would be a mental health service provided by a crisis home treatment team, a liaison mental health team, a community mental health team or any other specialist mental health crisis service).

An approved mental health professional (AMHP) will need to confirm that you are receiving mental health crisis treatment. An AMHP will be someone approved under section 114(1) of the Mental Health Act 1983 by any local social services authority in England, or approved under that subsection by any local social services authority in Wales.

You can make a referral yourself, but an evidence form signed by an approved mental health professional will need to be submitted with your application. You can make a referral to We Are Group if you live in England or Citizens Advice Cardiff and Vale if you live in Wales.

Mental Health and Money Advice has more information about mental health breathing space, including who would qualify. The Money and Pensions Service has more information about how to submit a referral for a mental health crisis breathing space.

Important things to know

• A mental health crisis breathing space will provide you with the same protections as the standard breathing space.
• A mental health crisis breathing space will last for the duration of your mental health crisis treatment plus 30 days .
• Unlike a standard breathing space, people who wish to enter a mental health crisis breathing space will not need to receive advice and find a debt solution.
• You can choose someone to talk to the debt adviser for you.
• There is no limit to the number of times that you can enter a mental health crisis breathing space. You can also apply if you have had a standard breathing space in the last 12 months

See our Debt and mental health guide for more information about mental health and dealing with your debts.

Other guides that may help you

Attachment of earnings orders guide

Bankruptcy guide

Complaining about your lender guide

Council tax arrears guide

County Court bailiffs guide

Debt and mental health guide

Gas and electricity arrears guide

Harassment by creditors guide

High Court enforcement guide

Mortgage arrears guide

Penalty charge notices guide

Replying to a County Court claim guide

Rent arrears guide

Safe bank accounts guide

Statute barred debts guide

Statutory demands guide

Varying a CCJ guide

Ways to clear your debt guide

• get more information about debts to HM Revenue and Customs (HMRC);
• understand what to do if HMRC take recovery action against you;
• deal with business rates, rent and utility arrears, accountants' bills, equipment leases and supplier debts; and
• find out where to get specialist help and advice.

This guide gives information about business debts that self-employed people commonly have. We explain how you can deal with these debts if you have stopped trading. We do not give information about debts owed by limited companies.

If you are still trading, you will need to get more advice and information about running your business and dealing with the ongoing debts your business may have. Contact Business Debtline (BDL) on 0800 197 6026.

Debts to HMRC

HM Revenue & Customs (HMRC) are responsible for collecting income tax, National Insurance and value added tax (VAT). HMRC are likely to take further action against you more quickly than some other types of creditors. This may mean that you need to treat a debt to HMRC as a priority. However, you may not need to do this if the types of action they can take do not have serious consequences for you. In the following sections we give more information on the different types of debt that HMRC collect and how they can take action to recover the money you owe. If you are not sure whether to treat a debt to HMRC as a priority, contact us for advice.

Income tax

When dealing with income tax arrears, you need to consider the following points.

• After completing your self assessment tax return, check whether your tax debt is correct. If you think the amount is not correct, contact HMRC to discuss what you think you do owe.
• Send in your tax return even if it is late. The deadline for sending in your tax return depends upon how you send it in. If you send in your tax return over the internet, the deadline is usually 31 January each year. If you send in your tax return by post, the deadline is usually 31 October each year.
• If you have not sent HMRC your tax return by the required deadline, HMRC will estimate how much tax you owe. This is called a 'determination'. You have no right of appeal against a determination so if you think the figures are wrong, send HMRC your tax return as soon as possible.
• If you are late sending your tax return, or pay your tax debt late, penalties can be added to the amount you owe HMRC.
• If you pay your tax debt late, HMRC will also add late payment interest to the amount you owe. This is calculated at a set rate. It is very rare for HMRC to stop adding this interest. This means that the amount you owe can increase quickly.
• HMRC has an online tool which estimates penalties and interest for late filing and late payments under self assessment. Go to GOV.UK and search for ‘Estimate your penalty for late Self Assessment tax returns and payments’.

You may need to treat income tax arrears as a priority debt. It is important to try to make an arrangement to pay HMRC as soon as you can. Use your budget to work out how much you can afford to pay.

You can contact HMRC Self Assessment payment to ask for a payment arrangement on 0300 200 3820. Make sure you have your budget available when you contact HMRC. It will show how much you can afford to pay. It will also help to show that you are not refusing to pay HMRC and cannot pay your debt in full immediately.

In some situations, you may be able to set up an online arrangement to pay HMRC in instalments through your Government Gateway account. For more information about setting up an online payment arrangement, go to GOV.UK and search for 'If you cannot pay your tax bill on time'.

Value added tax (VAT)

VAT is a tax that is charged on most goods and services that certain businesses provide. You should have been registered to pay VAT if your annual turnover was above a certain amount. The amount you should have paid will be the VAT on your sales minus the VAT on purchases for goods and services you bought for your business.

If your business was VAT registered, contact HMRC to de-register for VAT if you have not already done so. This will help to make sure they have worked out how much you owe properly.

• Make sure all your VAT returns have been sent to HMRC.
• If you have outstanding VAT returns, HMRC can estimate what you owe and send you a 'VAT notice of assessment of tax'.
• If your VAT bill has been assessed and you disagree with the amount being claimed, you can ask for a review within 30 days. If you still disagree with the decision, you can appeal to a VAT tribunal. If you are considering making an appeal, contact us for advice.
• HMRC can add penalties if you are late submitting your VAT returns or pay your VAT debt late. This may increase your debt.
• If you pay your VAT debt late, HMRC can also add late payment interest to the amount you owe.

You usually need to treat VAT arrears as a priority debt. Use your budget to help you work out what offer of payment to make to HMRC.

After you have stopped trading and are no longer registered for VAT, HMRC may allow you to pay your VAT arrears over a set period of time. Call HMRC VAT payment on 0300 200 3831 to ask for a payment arrangement. Have your budget available to show that you are offering what you can afford.

In some situations, you may be able to set up an online arrangement to pay HMRC in instalments through your Government Gateway account. For more information about setting up an online payment arrangement, go to GOV.UK and search for 'If you cannot pay your tax bill on time'.

Be aware that any late payment interest will continue to be added to your VAT debt even if you have a payment arrangement in place with HMRC.

National Insurance

National Insurance contributions are dealt with by the HMRC National Insurance Contributions Office (NICO). There are different types, or 'classes', of National Insurance contributions.

Class 1 contributions
Class 1 contributions are paid by employees (and employers) unless earnings are below a certain limit.

Class 2 contributions
Class 2 contributions were previously paid by self-employed people at a weekly flat rate unless their earnings were below a certain limit. For the 2024 to 2025 tax years onwards, self-employed individuals are no longer required to pay class 2 contributions.

Class 4 contributions
Class 4 contributions are paid by self-employed people if their annual profit is above a certain limit. The limit can change every year.

Paying class 2 contributions late

It is a criminal offence not to have paid class 2 contributions on time and HMRC can ask the magistrates’ court to fine you for non-payment. In practice, this is unlikely. If HMRC threaten to do this, contact us for advice.

If you have National Insurance arrears, they may need to be treated as a priority debt. Use your budget sheet to work out an offer of payment that you can afford. Contact us for advice.

Further action HMRC can take

HMRC can try to recover the money you owe in a number of different ways.

Changes to your tax code

For some debts to HMRC, if you are currently working for an employer either full or part-time, HMRC may try to recover the money by changing your tax code. This allows them to recover the debt from your wages before you get them. If you think HMRC are trying to do this for a debt you owe, contact us for advice.

Bailiffs

Bailiffs are also commonly known as enforcement agents. In this guide we use the term bailiff.

The 'bailiff' will be a collector appointed by HMRC Commissioners. HMRC can use bailiffs to recover debts without getting a court order first. This is known as ‘taking control of goods’. If they gain entry to your home, the bailiff will usually list items and ask you to sign a 'controlled goods agreement'. This allows you to keep use of the goods listed while you make payments by instalments. If you do not pay, the goods listed on the controlled goods agreement can be removed. HMRC bailiffs may also remove your goods straight away or lock them up on your premises until you pay what you owe. You should try to agree affordable payments by instalments.

There are some goods which cannot be taken such as basic household items and goods owned by other people. HMRC can take goods used in your business, if you are still self-employed. Contact us for advice.

Bailiffs’ entry rights

You do not have to let the bailiffs into your home but they can come in through open doors. If you refuse entry to an HMRC bailiff, they may apply for a warrant to break into your home, but this is unlikely to happen very often. If you park your vehicle on a public road, HMRC bailiffs can use force to get into the vehicle and take control of it. If you park your vehicle on your drive, the bailiffs may clamp or remove it. If you can, keep your vehicle locked in a garage.

Virtual Controlled Goods Agreement

A bailiff may ask you to agree to making a ‘virtual’ or non-entry controlled goods agreement (CGA) when they initially contact you by telephone or letter, rather than coming to visit your property to take control of goods.

• You don’t have to agree to making a virtual CGA.
• There are potentially advantages and disadvantages to agreeing a virtual or non-entry CGA, depending on your circumstances.

If you are considering whether to agree to making a CGA contact us for advice.

Direct deductions from bank accounts

If you owe HMRC at least £1,000 they can ask your bank if there is any money in your account to pay this debt. They will normally be able to do this 30 days after you have the letter from HMRC telling you how much you owe. HMRC can do this without going to court first. In most cases if you account is less than £5,000 in credit, HMRC cannot take any money.

The minimum amount of £1,000 that must be owed to HMRC can be made up of any type of tax including income tax and VAT.

If you don't agree that HMRC can take this action, for example the debt has been paid, you can object to HMRC. Contact us for advice.

Joint accounts

HMRC can ask for money to be taken from a joint account. Only money in the account belonging to the person who owes the debt can be taken. However, HMRC will assume balances in joint accounts are split equally. For example, if the account is in two names, and only one person owes the debt, HMRC will say 50% of the money in the account can be taken.

County court action

HMRC may make a claim through the County Court to get a county court judgment (CCJ) against you. This may be done if bailiff action is not successful. County court action is most commonly used to recover income tax and National Insurance arrears. A CCJ will be recorded on your credit reference file for six years and can affect your ability to get further credit.

• When county court action is taken against you, you will get a 'claim form'. This gives details about the debt and tells you how much the creditor says you owe them.
• You can complete the 'admission' form if you admit the debt and want to make an offer to pay the debt in instalments.
• If you want to dispute all or part of the debt, contact us for advice.

The County Court should consider your circumstances and your income and outgoings before making a decision about how the debt should be paid back. The final decision about how much you should pay back each month is taken by the court, even if the collector wants a higher amount.

If HMRC applied for a CCJ against you on or after 1 October 2012, they can apply to secure the debt against any property you own, even if you have not missed payments on the CCJ. If HMRC applied for a CCJ against you before 1 October 2012, the rules are different. Contact us for advice. See our Charging orders guide for more information.

If you miss payments on a CCJ, HMRC can take other types of action against you through the County Court, which could include:

• taking regular deductions from your wages if you are working, called an 'attachment of earnings order';
• freezing money in your bank account, called a 'third party debt order'; and
• applying to court for a 'judgment summons'.

For more information about different kinds of enforcement, see our Replying to a County Court claim guide.

Judgment summons

The court can issue a 'judgment summons' for you to go to court and explain why you have not paid. If HMRC do this, you can be sent to prison if you have:

• had the money to pay the amount of the judgment summons since the CCJ was made; and
• wilfully neglected or refused to pay as the court ordered.

In practice, HMRC do not use this procedure very often.

Magistrates' court action

If you owe less than £2,000 on income tax or National Insurance, in some situations HMRC could recover the debt through the magistrates' court. The process is called 'summary proceedings'. The collector has 12 months to start summary proceedings once the debt is due.

Although this power exists, it is not currently being used by HMRC.

Magistrates’ court bailiffs

If a debt has previously been referred to the magistrates’ court and you have not paid as the court ordered, magistrates' court bailiffs could be used to collect the debt. Magistrates' court bailiffs can force entry to your home to remove goods, but this should only be done as a last resort and when it is reasonable. Contact us for advice.

To find out more about magistrates' court action, see our Magistrates' court fines guide.

Bankruptcy

If you owe £5,000 or more, HMRC could apply to make you bankrupt. Bankruptcy means that valuable things you own (your 'assets') could be sold to help pay your debts. You would usually receive a 'statutory demand' before being made bankrupt. This is a legal document which shows what HMRC claim you owe.

Bankruptcy should be a last resort for HMRC after other methods of recovering the debt have been attempted. It is very important to let the collector know if you have very little income or no assets, particularly if your home is worth less than any mortgage or secured loans on it. If the collector can see that you do not have any assets, they may decide not to make you bankrupt. For more information, see our Bankruptcy guide and Statutory demands guide.

How HMRC should behave

HMRC has a service commitment charter, called the 'HMRC Charter'. HMRC should provide you with a service that is fair, accurate and based on mutual respect. They should also be mindful of your wider personal situation, and  give you extra support if you need it.

Complaining about HMRC

You may want to complain if you have been refused time to pay your arrears and you feel that this is unreasonable in view of your circumstances.

Details of how to contact HMRC to make a complaint can be found on their website.If you are unhappy with the way HMRC has dealt with your case, there is a complaints procedure that you can follow.

• You should first contact the HMRC office that has been dealing with your case. If you are not happy with the response, your complaint will usually be passed to a 'complaints handler'. HMRC accept complaints by telephone and in writing.
• If you are still not happy with the response, you can ask HMRC to look at your case again. They will usually ask a different complaints handler to consider your case.
• After going through these steps, if you are still not happy you can contact the Adjudicator's Office. See Useful contacts at the end of this guide. The adjudicator is not part of HMRC and they can act as an impartial referee in unresolved complaints.
• If you are not happy with a decision that HMRC has made, such as the amount of tax you owe or the charges they have asked you to pay, you may need to follow the review and appeals process instead of complaining. Contact us for advice.

Business rates

Business rates are a tax you have to pay to the council. If you have stopped trading, tell the council straight away. You may still be responsible for paying business rates if you are still leasing premises, even if they are empty. However, there may be discounts you can claim.

• You may be entitled to 'relief' from business rates in certain circumstances. Contact us for advice.
• Check the bill to make sure it has been calculated correctly. Contact us for advice.
• Business rates are a priority debt. Use your budget to work out an offer of payment that you can afford.

Remitting business rates

The council has the power to remit or 'write off' all or part of your business rates arrears. In practice, local authorities do not agree to this very often. However, it may be worthwhile making an application if you feel that you can show that you are in exceptional circumstances.

In order to remit business rates, the council must be satisfied that:

• you would suffer hardship if they did not remit the business rates: and
• it is reasonable for them to remit your business rates, taking into account the interests of local people.

Exceptional circumstances may be where:

• your business is essential to the local community. This may include a rural post office, a nursery and day care facilities where there are no other similar services in the area; or
• your business has failed, you are left with arrears on business rates and your personal circumstances mean you are unable to make an offer of payment. If you now receive only benefit income and this is unlikely to change in the future, your circumstances are more likely to be considered exceptional. For example, this could apply if you are suffering from long-term ill health.

You need to write to the council asking for your business rates to be remitted under section 49 Local Government Finance Act 1988. You also have to:

• show how you would suffer hardship;
• show what steps have been taken to make the business work; and
• provide details of your budget and any assets you have.

Collection procedures

Treat business rates arrears as a priority debt. This is important because the council has a range of powers to recover business rates arrears. They should send you a reminder notice when you fall behind on your payments. If you still do not pay after reminders have been sent, the council can ask the magistrates' court to make a liability order. This allows the council to try different ways of collecting the debt from you.

Unlike council tax, you cannot have money taken out of your benefits directly to pay back business rates arrears.

Bailiffs

The council can send bailiffs to business premises or your home. The procedure is almost exactly the same as for council tax. They cannot take protected goods such as basic household items. The main difference is that they can take tools of the trade. For more information, see our Council tax arrears guide.

Bailiffs’ entry rights

Bailiffs cannot force their way in if they have not gained entry peacefully before. If the bailiffs have not yet been into your home, you can choose not to let them in. Contact us for advice.

If the bailiffs have not yet taken control of any vehicles you own, keep them safe by locking them in a garage or parking them well away from your property. However, if you do park your vehicle away from your property and the bailiffs find it, they may clamp it or use force to get into it and take it away.

Contact the bailiffs and the council and try to negotiate an offer of payment that you can afford. Start paying immediately.

Virtual Controlled Goods Agreement

A bailiff may ask you to agree to making a ‘virtual’ or non-entry controlled goods agreement (CGA) when they initially contact you by telephone or letter, rather than coming to visit your property to take control of goods.

• You don’t have to agree to making a virtual CGA.
• There are potentially advantages and disadvantages to agreeing a virtual or non-entry CGA, depending on your circumstances.

If you are considering whether to agree to making a CGA contact us for advice.

Imprisonment

If the council has tried to use bailiffs and you are still in arrears, they can ask for a hearing in the magistrates' court called a 'means enquiry'. The court should not send you to prison unless they can show that you are guilty of:

• wilful refusal (you have deliberately refused to pay); or
• culpable neglect (you could afford to pay but did not).

The court can order all or part of your business rates arrears to be written off in exceptional circumstances, but are more likely to tell you to pay the arrears off in weekly instalments. You must go the hearing and explain why you have not been able to pay. Take your budget.

If you do not pay the amount ordered, you will usually have to go to court again and may be sent to prison. It is very important to get advice before the hearing. Contact us for advice.

Get further help

If you have not been able to get help before the hearing you can ask to speak to the duty solicitor in the court on the day.

Gas and electricity arrears

If you were trading from home, still live in the same property and have the same supplier, you will need to treat gas or electricity arrears as a priority debt. This is because there is a risk to your energy supply being disconnected. Make an offer of payment to clear the arrears as well as paying your current bill. For more information, see our Gas and electricity arrears guide.

If you are threatened with disconnection or a prepayment meter at home for gas or electricity arrears from separate business premises, contact us for advice.

Water rates

You can no longer be disconnected at home for water rates arrears. This applies to your ongoing water rates bill and also a water debt for any previous property you lived in or traded from. The water company may make a claim through the County Court to get a county court judgment (CCJ) against you. This is a court order which states what you owe and how it should be repaid. Therefore it is a good idea to build your ongoing water rates into your budget.Make an offer of payment you can afford on the arrears on the same basis as your credit debts.

Old business suppliers

If you have debts to businesses that used to supply goods and services to you, they could take further action against you to recover their money.

Debt collection agencies

Sometimes old suppliers will use a 'debt collection agency' to try to collect their money. Don't worry. A debt collection agency has no greater powers than the organisation you owe the money to. They are not bailiffs and have no right to come into your home.

County court action

Old suppliers may make a claim through the County Court to get a county court judgment (CCJ) against you. The supplier should send you a letter before they start court action telling you how to pay and how to contact them to discuss what repayment options you might have. The county court process is the same as described earlier for debts to HM Revenue & Customs. See the earlier section County court action under the heading Debts to HMRC.

Debts to suppliers are not usually regulated by the Consumer Credit Act 1974. If this is the case and you do not keep to the payments the court has ordered on a CCJ, high court bailiffs could be used to recover the debt. If high court bailiffs have not been into your home before, do not let them in. This is because they should not force their way into your home unless they have been in peacefully before and taken control of your goods properly. See our High Court enforcement guide for more information.

Judgment summons

Old business suppliers cannot use a ‘Judgment summons’ if they are successful in taking county court action against you. Therefore, you cannot be sent to prison for not paying a debt to an old supplier, even if you have a CCJ against you.

Bankruptcy

If you owe £5,000 or more, your old supplier could apply to make you bankrupt. The process used is similar to that for debts to HMRC. See the earlier section Bankruptcy under the heading Further action HMRC can take for more information.

Business rent arrears

You may have had a lease for business premises. When you cease trading you may still be liable for ongoing rent and any arrears even if you have given up the lease and returned the keys to the landlord.

Monthly tenancy

If your tenancy runs from month to month, then you must give the correct period of notice before leaving. However your liability usually ends when your tenancy finishes. Check the terms of your tenancy agreement.

Long-term lease

• If your lease is over a period of years then you may be liable for the rent until the lease expires or a new tenant is found either by you or the landlord. Check the terms of your lease agreement.
• If your landlord evicts you from the business premises the lease will end and you will not be liable for ongoing rent and business rates.
• If you are liable for the ongoing rent, you may be able to sublet or 'assign' the premises. Check your agreement. The landlord should not normally 'unreasonably refuse' to let you do this.
• Ask the landlord to let you surrender the lease. If the landlord accepts surrender of the lease they will be liable for business rates while the property is empty. Therefore they are unlikely to agree unless they can easily find another tenant.
• A landlord for a business tenancy can send bailiffs to recover rent arrears without a court order. However they can only usually call at the rented business premises to remove your stock and equipment. Therefore if the premises are empty, bailiffs cannot usually come to your home and remove personal belongings. If your landlord is threatening to use bailiffs for rent arrears, contact us for advice.
• After you have stopped trading you can treat the rent as a non-priority debt and negotiate payments you can afford with the landlord.

Equipment leases

You may have had an agreement with a company to lease equipment for your business. Check the agreement to see whether you have the right to keep the equipment at the end of the lease. You may have to pay for the equipment until the lease runs out whether you return the equipment or not.If you want to keep the equipment you have leased but cannot afford the payments, contact us for advice.

Selling leased equipment

It is a criminal offence to sell leased equipment without the consent of the company.Check with the leasing company if the debt will be reduced if you return the equipment. If you no longer need the equipment because you have ceased trading, you can treat this as a non-priority debt and negotiate payments you can afford with the company.

Accountants' bills

If you have an accountant who usually deals with your tax returns, you may have a problem if you are not up to date with their bill. Sometimes accountants refuse to complete tax returns or give you back your books if they have not been paid. This can cause problems with HMRC if they have sent you an estimated tax bill that is too high.

• If you cannot get your books back, try to give HMRC a summary of your trading figures from any papers you have.
• Tell HMRC why you have no books. Ask them to accept your estimate even if you have no papers to prove your figures.
• Try to negotiate with your accountant to give your books back. They may agree if they can see you are in no position to make any sort of payment to them, or you may be able to make an agreement for a part payment instead.

Debt solutions

To get personal advice on how to deal with your debts, use My Money Steps. Tell us about your situation and your debts, and our tool will advise you on the solutions suitable for you. Go to My Money Steps and click on 'Get started'.

Useful contacts

Adjudicator's Office Phone: 0300 057 1111 www.adjudicatorsoffice.gov.uk

Business Debtline Phone: 0800 197 6026 They are open: Monday to Friday 9:00am to 8:00pm www.businessdebtline.org

Taxaid If you need specialist advice on tax you can ring Taxaid. Phone: 0345 120 3779 www.taxaid.org.uk

Other guides that may help you

Bankruptcy guide

Breathing space guide

Charging orders guide

Council tax arrears guide

Gas and electricity arrears guide

High Court enforcement guide

Magistrates' court fines guide

Replying to a County Court claim guide

Statutory demands guide

• find out the risks of using buy now pay later;
• help you stop a continuous payment authority;
• find out alternatives to buy now pay later; and
• help you make a complaint.

What is buy now pay later?

Buy now pay later (BNPL) has become a very popular way for people to pay for items. You will see it as an option when you buy most things online. It allows you to buy an item straight away, but delay payment of the item until a later date. You may be expected to pay the money back in one go, or you may be allowed to pay for the item in several instalments, usually spreading the payment over three months or more.

Potential risks

While delaying the payment of an item may be useful in some situations, you need to be careful when deciding to choose BNPL to pay for an item.

• There is a risk that you may be tempted to purchase an item which would otherwise be unaffordable. You are also more likely to spend more, thinking you'll be fine paying it back in the future.
• You may be tempted to use BNPL to pay for essential items such as groceries, clothes or toiletries. This may disguise that you are struggling to afford your essential costs and need debt advice.
• Spreading the repayments may be tempting. However, the debts will need to be repaid. You need to consider that if you can't afford to pay for the item now, you probably won't be able to in the future either.
• If you can't pay the BNPL agreement on time, charges for late payment can increase the amount you owe.

Before using BNPL to buy an item, think about whether you can afford it and whether it is essential. If it's not essential, it may be better to wait until you can afford it to avoid getting into debt.

If you are using BNPL to pay for everyday items like food, clothes or energy bills, it may be that you do not have enough income to pay for all your current outgoings. See the What to do if I can't pay my BNPL section if you find you are becoming reliant on BNPL, or you cannot afford the repayments.

Types of BNPL

Short-term BNPL

When you purchase an item online, you are usually given the option to pay for the item after 30 days, or over a period of three or four months. Klarna and Clearpay are 2 of the main short- term BNPL providers that offer this payment option. Be aware of the following.

• The BNPL provider will usually carry out a 'soft' credit check only. This means they are not checking your ability to repay the debt and you may be more likely to take out more lending than you can afford.
• Research has shown that people are more likely to spend more money than they would normally if they are delaying the repayment of the debt.
• You will not be protected by Financial Conduct Authority (FCA) regulations. See the Financial Conduct Authority regulations section below for more information.
• If you miss a payment, this will be added to your next scheduled payment and missed payments can be shared with credit reference agencies.
• No interest will usually be added to the account.
• Each time you buy an item through BNPL you are taking on a new debt that will need to be repaid at some point in the future.

Longer-term BNPL

This will usually be for more expensive purchases, and you will be offered the chance to pay after a period of time, usually 6 or more months .

• There may be a charge for using this type of BNPL.
• Research has shown that people are more likely to spend more money than they would normally if they are delaying the repayment of the debt.
• Each time you buy an item through BNPL you are taking on a new debt that will need to be repaid at some point in the future.
• There is likely to be an interest-free period in which you need to repay the BNPL balance before interest is added. See the Interest and charges section for more information.
• The amount owed can increase significantly if the balance is not repaid during the interest-free period.
• You will be protected by Financial Conduct Authority (FCA) regulations. See the Financial Conduct Authority regulations section below for more information.

Interest and charges

Short term BNPL agreements (paid back in 30 days, or less than 4 monthly payments) will usually be interest free. You should check with the BNPL provider to be sure.

Most short term BNPL agreements charge late payment fees. You'll need to check your agreement to find these out. For example :

• Klarna will add a £5 late payment fee for any payments made more than seven days after the due date, though this is currently capped at two late payment fees per order; and
• Clearpay will add a late repayment fee of £6 for each late instalment and a further £6 if the payment is still outstanding seven days later. These charges will be capped based on how much you've borrowed. Check your agreement for clarification on this.If you have several BNPL agreements that you struggle to repay, the risk of charges substantially increasing your debt level is very real.

You'll need to check your agreement, but longer term BNPL agreements will usually allow interest and charges to be added to your BNPL account.

It is important to be aware of the annual percentage rate (APR) that you may be charged, as this can be high compared to the APR for loans and credit cards from high street banks. APR is the total cost of the borrowing over a year.

It is likely that these agreements will have an interest-free period, usually 6 or 12 months. If you repay the total amount owed within the interest-free period, then no interest should be added. However, if you don't pay the amount owed within the interest-free period, interest will be added to the balance owed. Depending on the nature of the agreement you have signed, the interest may be backdated to the start of the agreement.

If you are unable to clear the balance within the interest-free period, you may end up paying a lot more for the item you've purchased than if you'd bought it outright. You'll also need to make monthly repayments and the balance will continue to accrue interest until it is paid in full.

Credit reference file

Most BNPL companies now report information to credit reference agencies. This will include how you are managing the account(s). If you fall behind with your payments on a BPNL agreement, this can be recorded. If you fall behind with your payments for 90 days or more, the account may be reported as 'defaulted'. A defaulted account will stay on your credit report for six years. For more information about your credit file, see our Credit reference agencies guide.

Financial Conduct Authority regulation

Most BNPL agreements are not regulated by the Financial Conduct Authority (FCA), this means that you won't benefit from the consumer protections you get when borrowing money from most other types of creditors.You should check with your BNPL lender, but generally:

• agreements that are paid back in four instalments or less and do not add interest/significant charges will not be regulated; and
• agreements that are paid back in more than four instalments or do have interest/significant charges added will be regulated.

If the agreement is unregulated, it means that the BNPL provider will not usually carry out a full affordability check. This may make it more likely that you could borrow too much.

If your BNPL debt isn't regulated by the FCA, you have fewer options if you need to make a complaint. You can't escalate a complaint to the Financial Ombudsman Service. See the BNPL Complaints section for more information.

You also don't have the same 'section 75' protections that you have with a purchase on a credit card. Section 75 can, in some situations, make the creditor legally responsible if there is a problem with your purchase. The MoneySavingExpert website has more information on the benefits of section 75 protection.

Continuous payment authority

When you purchase an item on BNPL, you will usually give the creditor your card details and set up a recurring payment called a 'continuous payment authority’ (CPA). This will allow the BNPL provider to take repayments from your card on an agreed date. If the money is not in your account to repay the amount required, the BNPL provider can try again later. The creditor taking this money may mean you don't have enough money to pay your essential bills.

There has been a lot of confusion about CPAs and the right to cancel them. If you have agreed to repay your BNPL agreement this way and are unable to afford the payment, you can take action to stop the payment being taken.

Contact the BNPL company

Write to, or email, the BNPL provider to tell them you are withdrawing your permission for money to be taken from your card. See the sample letter Withdraw your continuous payment authority from buy now pay later company.

If you withdraw your continuous payment authority and the money is still taken from your account, this is an 'unauthorised transaction'. Your card issuer should give you a refund. This should include any interest or charges added to your account because the payment was taken.

If your BNPL is FCA regulated, the FCA’s Consumer Credit sourcebook (7.6.12) states that, where a customer is in financial difficulties, a firm must not request payment on a continuous payment authority more than twice on the same agreement once it has already been refused. If you later agree that more payments can be requested, this rule does not apply.

Stopping payments to the BNPL company may help you pay your essential bills and living costs, but it does not mean you no longer owe the money. You need to get full advice on how to deal with the debt in the long term. See the What to do if I can't afford to pay my BNPL section.

Contact your bank

If you are finding it difficult to contact the BNPL provider, for example, because they are an online company, contact your card issuer. See the sample letter Withdraw your continuous payment authority from your card issuer. Your bank should stop the payment (or payments) being taken, even if you haven't told the BNPL company.

The FCA website confirms that you have a right to cancel the CPA.

"In most cases, you should be able to cancel by contacting the company taking the payment and asking it to stop. However, you do have the right to cancel directly with your card issuer. Once you have done this, it must stop payments immediately – it cannot insist that you agree this with the company taking the payment first."

What to do if I can't afford to pay my BNPL

BNPL debts are non-priority debts. If you are struggling financially, you should always pay your essential costs first, such as your mortgage or rent, gas, electricity and food.

Cancel the continuous payment authority you have set up. This avoids money being taken that you need to pay for essential items. See the Continuous payment authority section for more information on doing this.

Filling in your budget is the starting point for dealing with your debts. We know that when you are struggling with debt, the thought of writing down your income and outgoings might feel like the last thing you want to do. But doing a budget might be easier than you think.

Use My Money Steps to work out your budget and get instant tailored advice. You won’t be able to choose a solution to deal with your debts without a budget.

Your budget will show how much money is left over after you have paid for all of your essential costs of living. This doesn't include payments towards arrears on bills, BNPL debts or credit debts.

See our Making the most of your money guide for ways of cutting your costs.

Alternatives to BNPL

You may have used BNPL, or be thinking about it, because you are finding it difficult to manage. Lots of people get into debt because they are not getting all the help to which they are entitled. We've outlined some possible help below.

Food

If you are struggling to afford to buy food from the supermarket, don't be embarrassed to get food from elsewhere. Doing this could free up money to pay for other essential items. Many people get help with their food through charitable organisations that provide valuable support.

Trussell Trust food banks can give you a minimum of three days’ food in an emergency. You will need to obtain a voucher first. You can get vouchers from various places, such as a doctor or health visitor. Some Jobcentres, councils and local Citizens Advice also provide vouchers. You can contact your local Trussell Trust food bank to find a full list of who gives out vouchers locally. For information about your nearest food bank, go to the Trussell Trust website or contact us for advice.

Clothing

It is usually cheaper to buy second hand clothes. You can get second hand clothes through a variety of places, such as charity shops, car boot sales and eBay. There are also apps such as Vinted and Depop that you can use to buy second hand clothes. You'll need a smart phone for these apps.You may be able to get free clothing through Freecycle or Freegle. People offer various items, including clothes through these websites. You can reply and arrange collection.

Benefits

Which benefits you may be entitled to, will depend on your circumstances. Use an online benefits checker, for example, the Benefits Calculator on the Turn2us website www.turn2us.org.uk.

Local council

Some councils have a welfare assistance scheme which can help if you are in an emergency situation. Individual councils decide on the rules for their scheme. Contact your local council to see whether they run a welfare assistance scheme and what it offers.

Government help

You can apply for help with funeral or maternity costs, cold weather and winter fuel payments and in some cases, budgeting loans. If you are on Universal Credit, you can apply for a budgeting advance instead of a budgeting loan. There are rules about who can apply. Contact us for advice.

Credit unions

If you have a local credit union, you may be able to get a loan from them. Usually, but not always, they give loans if you have saved a certain amount with them first. You can search for a credit union near you at www.abcul.org.

Charitable grants

Turn2us can search over 1,400 charitable grants for you. Use the Turn2us Grants Search tool to find charitable organisations that might be able to help you. Go to https://grants-search.turn2us.org.uk. It takes less than five minutes on average.

See our Help from charitable organisations guide for more information along with tips on applying for a grant.If you need money for furniture or white goods, see if there is a recycling project near you. For furniture, electrical items and white goods, try Fair for You’s website www.fairforyou.co.uk. Your local advice agency, for example your Citizens Advice Bureau, should also have details of furniture and white goods schemes in your local area.

Our Making the most of your money guide has lots more information about trying to save money.

BNPL complaints

Complaint to your BNPL lender

If you are unhappy with the service provided by a BNPL provider you can complain. Ask them about their complaint's procedure. Make your complaint to the BNPL company. Resolver is an independent and free service that can help you do this.

If your complaint relates to a short-term BNPL debt, and you aren't happy with the response, it's likely you'll need to escalate the complaint internally. Each BNPL provider will have its own process, so you'll need to clarify this with them.

The Financial Ombudsman Service (FOS) will not get involved in complaints for this type of agreement.

If the debt is a longer term BNPL agreement and you aren't happy with the response to your complaint, or you've not had a response after eight weeks, you can escalate your complaint to the FOS.

Complaint to the Financial Ombudsman Service

You can only use the Financial Ombudsman Service (FOS) if your BNPL agreement is regulated by the FCA. See the Financial Conduct Authority regulation section earlier in this guide.

If you have made a complaint to your bank or BNPL lender and you are not happy with the response, you can ask the FOS to investigate. The FOS plays a very important part in complaints. It does not have the power to fine or punish businesses, but it can help settle disputes between businesses and consumers. The FOS can look into your complaint and can award compensation to you.

You have six months from the date of the final response from your lender to take your complaint to the FOS. Your bank or lender should tell you when their response is final. It may be their only response to your complaint. If you are not sure, ask them. If you do not complain to the FOS within six months, they may not be able to help. Time limits may also apply if what you are complaining about happened some time ago. Contact us for advice.

The FOS cannot help with all complaints. You will need to speak to them by phone or fill out their complaints form to see if they can help. See Useful contacts below.

Useful Contacts

Clearpay Contact form

Financial Ombudsman Service Phone: 0800 023 4567 or 0300 123 9123 www.financial-ombudsman.org.uk

Klarna Phone: 0808 189 3333 Webchat Contact form

Resolver www.resolver.co.uk

Turn2us Phone: https://www.turn2us.org.uk/

Use this guide to:

• find out when and how your creditor can apply for a charging order;
• work out if you can stop a charging order from being made; and
• find out how and when a creditor can apply to sell your home.

County court judgments (CCJs)

My CCJ was applied for before 1 October 2012

In this situation, the creditor can apply for a charging order if they have a CCJ against you and:

• you have been ordered to pay the whole debt immediately, or by a certain date, (this is known as a 'forthwith' judgment) and you have not done so; or
• the court has ordered you to pay the judgment by instalments and you have missed one or more payments.

If you have been ordered to pay a CCJ by instalments that you cannot afford, you may be able to ask the court to look at their decision about the rate of payment again.

If you apply to the court to vary the instalments of a judgment made before 1 October 2012 after this date, the creditor may argue that they can apply for a charging order. There are legal arguments against this. Contact us for advice.

Paying the debt by instalments

If you have been ordered to pay the debt by instalments and are not behind on the payments, the court should not make a charging order. This is because of a very important case called Mercantile Credit Co Ltd v Ellis in 1987. See the later section on Instalment orders for more information.

My CCJ was made on or after 1 October 2012

In this situation, changes to the law mean that the creditor can apply for a charging order even if the court ordered you to pay the CCJ by instalments and you are up to date with them.

Charging order process

The application for a charging order process changed on 6 April 2016. This guide explains the new rules. There are two stages.

Stage one – the interim order

When the creditor makes an application for a charging order, the court will make an 'interim charging order' if it is satisfied that you own, or have a part share (an interest) in the property. This is not the final order.

An interim charging order is usually made without a hearing, by a court officer. You can object in some circumstances but only have 14 days to do so. You would need to show a legal reason why the charge should not have been made, contact us for advice.

The application will be referred to a judge if:

• you are up to date with an instalment order that was made before 1 October 2012; or
• the court officer thinks there is a reason why the application should be considered by a judge.

If the decision is made by a court officer, your creditor will have to send you a copy of the interim order within 21 days of the order being made.

If the decision is made by a judge, they can either:

• refuse to make an interim order charging order;
• make an interim charging order; or
• make an interim charging order and set a hearing date at your local county court hearing centre. At the hearing the judge will consider whether to make a final charging order. See Stage two – the final charging order.

The creditor will register the interim charging order as a 'notice' or 'restriction' on your property with the Land Registry, which should inform you of this in writing. This means that the creditor can stop you from selling the property until the court has decided whether to make a final charging order. If the creditor has not followed these steps, they may not be able to carry on with their charging order application. Contact us for advice.

Court fee

The creditor has to pay a fee to the court for a charging order application. The creditor will add this to your debt. They can also add other court costs to the debt.

Stage two – the final charging order

Once you have been served with a notice that an interim charging order has been made, you have 28 days to object to a final charging order. You must send your objections in writing to both the court and the creditor. There will be a hearing at your local county court hearing centre, and a judge will decide whether to make the final charging order.

If you do not send any objections, a judge will decide whether the charging order can be made final without a hearing.

If a judge has already arranged a hearing after making a decision about the interim charging order, you must send any objections you have to both the court and the creditor at least 7 days before the hearing.

You should go to the hearing. If you cannot attend on that date, explain this to the court and ask for a different hearing date. If you do not attend the hearing, the court is likely to make the order final.

Objections

You should send your objections to both the creditor and the court. This could be in the form of a letter outlining all the arguments you have against the charging order being made. This should be sent by recorded delivery to both the creditor and the court. Include a copy of your budget, so the court is aware of your current financial circumstances.

Court forms

You can find most court forms using the court form finder on the HM Courts and Tribunals Service website http://www.justice.gov.uk/about/hmcts.You can fill in application forms online and print them off to sign and send to the court.

Can I stop a final charging order?

The court must consider whether it is reasonable to make a final charging order. Under the Charging Orders Act 1979, the court has to consider all the circumstances of the case and in particular:

• the circumstances of the person owing the debt; and
• whether any creditor would be 'unduly prejudiced'. This means the court has to decide if making a charging order would disadvantage other creditors.

Also, if:

• your creditor applied for the CCJ on or after 1 October 2012;
• the court ordered you to pay the debt in instalments; and
• you are up to date with the instalments;

the court must take this into account when considering whether to make the charging order final. This means that you can argue that it would be unfair for the court to allow the creditor to get a final charging order, if you have not defaulted on any instalments that the court set on the CCJ. However, under the law, the court does not have to accept this argument and can still choose to make the charging order final.

The other arguments you can use against the order being made final will vary, depending on:

• your own circumstances;
• whether you have any other debts;
• whether you have 'equity' in your house; and
• whether you own your home in joint names or on your own.

‘Equity’ means the profit you would have left if you sold your home and paid off your mortgage and secured loans.

Depending on the circumstances of your case, these are some of the factors that the court may consider.

• Does any member of your family have a disability or serious illness?
• How many debts do you have?
• Will making a charging order in favour of one creditor give them unfair priority over the other unsecured debts? It can be helpful if you can show that the creditor that has taken court action against you has acted in such a way that it would be unfair to your other creditors.
• Sometimes it can be helpful to point out if you already have payment arrangements in place with your other creditors, and that a final charging order would upset these. It can also be worth highlighting if any of your other debts are larger than this one, and if any other creditors have frozen the interest. In practice, the court will often not take these things into account.
• Your creditor is supposed to list all the other creditors that they are aware of in their application for an interim charging order. The judge can direct the interim order to be sent to the other known creditors, but they do not have to do this. If creditors who may want to object to the final charging order do not receive a copy of the interim order, they will not know about the hearing. If you think that a creditor may be 'unduly prejudiced' by the charging order being made final, you can raise this in your written objections and at the hearing.
• Could the creditor have given you a secured loan when you first took out the loan? If they decided to offer an unsecured loan at a higher rate of interest instead, point out that other unsecured creditors may be disadvantaged by a charging order being made. It may be unreasonable to allow the creditor to secure the debt where a large part of the amount owed is interest and the interest rate that has been charged is typical of an unsecured loan.
• If you are likely to be made bankrupt, you can argue that a charging order would give the creditor an unfair advantage over other unsecured creditors. Contact us for advice.
• There are other ways the court could enforce payment of the debt. You could ask the court to make an instalment order so that you make monthly payments you can afford; or you could ask for an attachment of earnings order so that the instalments would come directly from your wages. This is only useful if you are employed and your employment would not be at risk.

Self-help pack

Our self-help pack includes further information on types of debt and guidance on completing a budget. Contact us for a copy.

More ways of trying to stop a final charging order

• If you owe less than £5,000 in total to all your creditors, you can argue that the debt should be included in an administration order rather than the charging order being made final.
• If your home is jointly-owned and your share of the equity in the property is less than the amount of the debt, you can argue that there is no point in the charging order being made. This is because the creditor would not be paid off in full, even if they forced the sale of your home. This is a complicated area. Contact us for advice.
• If your home is worth less than your mortgage (also known as negative equity), you can argue that there is no point in a charging order being made. This is because the creditor would not be paid off, even if they forced the sale of your home.
• If the debt is very small compared to the amount of equity in your home, you may be able to argue that it is unfair to make a charging order. However, the court may not accept this argument.
• If your debt is small and you have been paying the CCJ as the court ordered, argue that it is unfair to make a charging order. This only applies to CCJs applied for by creditors on or after 1 October 2012.

In practice, it can be very difficult to persuade the court not to make the charging order final.

If the court decides not to make the charging order, you will still have to pay the debt. Keep up to date with any instalments the court has ordered you to pay. This will stop your creditor from using other kinds of enforcement.

Final charging orders

If none of your arguments are successful and the court makes a final charging order, you can ask the court to add conditions to the charging order. Conditions can prevent the creditor from applying to sell your home in certain circumstances. For example, you can ask the court not to allow your home to be sold as long as you have children in full time education who live there.

You could also ask the court to suspend enforcement of the charging order as long as you make certain payments. This will be useful if you previously fallen behind on the payments the court has ordered you to make. If the court agrees to this request, it means that the creditor cannot apply for your property to be sold as long as you keep to the agreed payments.

Once a creditor has a charging order against your home, they could still try to enforce the debt in other ways. Therefore, it is a good idea to apply for the CCJ to be varied to allow you to pay an affordable amount each month. See our Varying a judgment guide for more information..

If your application is successful and you keep the new payments that are ordered, the creditor will not be able to enforce the debt in other ways. Contact us for advice.

Procedure

If you want the court to add conditions to the charging order, or to suspend it on terms of payment, you can ask for this using the procedure for making objections against the order being made final. This means sending the court and creditor written details of your request at least seven days before the hearing. Contact us for advice.

The house is in joint names but the debt is in my name

If the debt is in your sole name, but you own the house in joint names with someone else, they have the right to tell the court about their circumstances and why they will suffer hardship if a charging order is made final. They should have been sent a copy of the interim charging order. They should send their objections in writing to the court and creditor by recorded delivery at least seven days before the hearing. They should be given an opportunity to go to the hearing and explain their objections. If they paid part or all of the deposit to buy the home, or have paid a lot of the mortgage payments, they can explain this to the court. Contact us for advice.

Instalment orders

My creditor applied for the CCJ before 1 October 2012

In these circumstances, if you have kept up with instalments on a CCJ, the court should not make a final charging order. According to a case called Mercantile Credit Co Ltd v Ellis in 1987, a charging order should only be made if the payments on a judgment are in arrears, or if you were ordered to pay the judgment in one lump sum 'forthwith' (immediately) and didn't pay. This case is very important. If you are in this situation and still have an interim charging order made, go to the hearing and take evidence that you have kept up with the instalments ordered on the CCJ. Mention the Mercantile Credit Co Ltd v Ellis case to the District Judge.

My creditor applied for the CCJ after 1 October 2012

The law changed on 1 October 2012. If a creditor applies for a CCJ against you after this date, the creditor can get a charging order even if you are up to date with the instalments the court ordered you to pay.

Divorce or separation

If you are currently involved in divorce proceedings, or a dispute over dividing up your former marital home, you must get legal advice from a solicitor. You may be able to stop a charging order being made, depending upon the stage in the divorce proceedings.

Interest

If a creditor has got a CCJ against you, they may be able to add extra interest once a charging order is made.

• For some types of debt, the law allows interest to be added onto CCJs separately from the terms and conditions of the agreement. This is known as 'statutory interest' and it runs at a standard rate.
• For some debts, there is a clause in the agreement which allows further interest to be added to the debt after the creditor has got a CCJ. This is known as 'contractual interest'.

Statutory interest cannot be added to a CCJ if:

• the debt is for an agreement regulated by the Consumer Credit Act (most ordinary credit agreements, including bank overdrafts); or
• the debt is less than £5,000 in total, even if it is not covered by the Consumer Credit Act.

If:

• an agreement allows contractual interest to be added after a CCJ is made; and
• the CCJ was made on or after 1 October 2008;

the creditor has to follow certain steps, such as sending you a proper notice, before the contractual interest can be added. Contractual interest builds up separately to the judgment and will not be secured by the charging order. Contact us for advice.

Judgments made before 1 October 2008

The rules about contractual interest and CCJs made before 1 October 2008 are more complicated. Contact us for advice.

What does a charging order affect?

A charging order may be made against any item in which you have an 'interest'. This usually means property that you own (or part own) and will usually be your home.

If you own your home in your sole name, then the charging order will be made against the whole property. This is sometimes called a 'notice'.

If you own your home in joint names with someone else and the debt is in your sole name, the charging order will be made against your share or 'beneficial interest' in the property. This is sometimes called a 'restriction'. When the property is sold, the debt should only be paid out of your share of the equity.

Selling my home

If your creditor applied for your CCJ before 1 October 2012, they can apply to the court for permission to sell your home, called an order for sale, if:

• a charging order has been made final; and
• you have not met the terms or conditions that the judge added to the order.

If your creditor applied for the CCJ on or after 1 October 2012, these rules still apply. However, there is an extra rule that may help you. Your creditor cannot apply for an order for sale unless you have missed payments that the court ordered you to pay on the CCJ.

Most creditors are prepared to wait for you to sell your home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted.

You will need to get some help and representation to prepare for an order for sale hearing and to put forward your case at court. We can help you to find the right type of help. Contact us for advice.

At the hearing, the judge will consider your circumstances before making a decision about whether to grant the order for sale. They should take into account the following points.

• The size of the debt.
• The level of equity in the property. If there is not enough equity for the debt to be repaid when the property is sold, the court is unlikely to allow the property to be sold.
• Your approach to the debt. If you have not attempted to come to an arrangement with the creditor to repay what you owe, the court is more likely to grant the order for sale.
• If you can repay the debt in a reasonable time, the court is unlikely to allow the property to be sold.
• The welfare of any children in the household. For example, there may be a need for stability at school. The effect on the children of moving house should be considered.
• The effect the sale of the property would have on any other family members living in the property.
• The interests of any secured creditor.
• When you bought the house, what did you buy it for? Was it intended as a long-term family home? Was it imagined that an elderly person would live there for their lifetime?

The court has the power to suspend an order for sale as long as you meet certain conditions, such as making regular affordable payments based on your budget, or until the youngest child living in the property reaches 18.

If you do not live in the property as your main home, it is likely to be much harder to argue against an order for sale. If you rent the property out, for example, the court may be more likely to grant the order for sale.

On or after 1 October 2012

If the creditor applied for your CCJ on or after 1 October 2012 and you are up to date with the instalments that the court ordered you to pay, the court should not grant an order for sale.

From 6 April 2013

From 6 April 2013 , the court should not make an order for sale if:

• your original debt was regulated by the Consumer Credit Act 1974; and
• your creditor applied for the order for sale when the amount owing under your CCJ was less than £1,000.

Properties in joint names

If the debt is in your sole name, you can argue that it is not fair for the whole family to lose their home because of a debt belonging to one person. You can also point out any other special household circumstances, such as age, illness or disability.

If your share of the equity is less than the amount of the debt, the court may be less likely to grant the order for sale.

Beneficial interest

If the property is in your sole name, but someone else has made significant contributions to the purchase price or ongoing bills, they may have gained a ‘beneficial interest’ in the property. This means that they have got a legal right to the share of the equity, even though they are not a named joint owner. If this can be proven, the extra protection given to jointly-owned situations will apply. This is a complicated area. Contact us for advice.

What can I ask the court to do?

You can still make an offer of payment at this stage and ask the court not to order a sale as long as you keep up with the payments. Use your budget to work out what you can afford to pay towards this debt, taking into account any other debts you have. Contact us for advice.

What if the court makes an order for sale?

If the court makes an order for sale, you will usually be given 28 days to clear the debt or move out of the property. If you do not leave the property within the time the court states, the creditor can apply for a warrant of possession. A warrant of possession gives you a time and date when bailiffs will evict you. If you are in this situation, contact us for advice.

Is there a time limit for a creditor to apply for an order for sale?

An important court case called Yorkshire Bank Finance Limited v Mulhall from 2008 decided that, once a creditor has a charging order against you, there is no time limit within which they must apply for an order for sale. This means that a creditor could ask the court for your property to be sold years after the charging order was originally made.

Paying off a charging order

If you pay off the amount you owe under the charging order, you can apply to the court for the order to be discharged. The amount you have to pay will include court fees and costs that have been added to the debt. Ask the court for a certificate of satisfaction on your CCJ and include evidence of payment. Creditors will usually inform the Land Registry that the debt has been paid so that the charging order can be removed from your property.

If you have enough equity in your home and you move house, the charging order will usually be paid off as part of the sale process. If you own the property jointly with someone else, but the CCJ is in your sole name, this may not happen automatically. Contact us for advice.

A creditor says you have not paid off the charging order

The creditor may say there is interest outstanding on a CCJ. If the creditor disagrees that you have paid the charging order in full, contact us for advice.

The Land Registry

You can check details of charges on property online through the Land Registry website. The Land Registry can be contacted online, or by using the following details.

Land Registry Phone: 0300 006 0411

Other guides that may help you

Attachment of earnings orders guide

Administration orders guide

Help with court fees guide guide

Interest on a CCJ guide

Varying a CCJ guide

• help you make a complaint about a claims management company; and
• find out who you can refer your complaint to.

Claims management companies

Many companies say that they can get your debts written off, or get you compensation by claiming that your credit agreements are unenforceable.

Many credit agreements do meet the legal requirements under the Consumer Credit Act 1974 and are not easy to challenge as unenforceable.

We are a free, independent, confidential advice agency and we can give you advice about your credit agreements and whether they are likely to be unenforceable. We can tell you if there may be genuine grounds for a challenge.

Please think very carefully before paying money that you may not be able to afford to a claims management company. If you are worried about debts, this is unlikely to be your best option to deal with your creditors. It could make your debt problems worse. We can help you look at all the options you have for dealing with your debts. Before signing up with a claims management company, contact us for advice.

Fees

Be careful. There is no guarantee that a claims management company will be successful in challenging your agreements. If the agreement you have made with the claims management company allows it, they may still charge you a fee for their services.

The fee that a claims management company can charge you should be reasonable. In some cases, such as for Payment protection insurance (PPI) claims and non-PPI financial product and service claims, the fee is capped by special rules that are linked to how much redress (compensation) is agreed. For more information, go to www.fca.org.uk and search for 'Using claims management companies'.

The claims management company should also explain how they will calculate their fees in their pre-contract information.

Complaints

The Financial Conduct Authority (FCA) has taken over as the regulator of claims management companies. The FCA has listed a number of principles that claims management companies should follow. For example, a firm must:

• act honestly, fairly and professionally;
• not engage in high-pressure selling in relation to regulated claims management activity;
• publish the standard terms and conditions it enters into with customers on its website; and
• have clear and effective procedures to identify and protect vulnerable customers.

If you have a complaint about the behaviour of a claims management company, you will need to complain directly to the company first. Write to the claims management company and:

• set out the reasons for your complaint as clearly as you can;
• tell them what you are unhappy with;
• tell them what you want them to do about it; and
• ask for a copy of their complaints policy.

If you have any evidence that supports your complaint, also send a copy to the claims management company.

The claims management company has up to eight weeks to respond to your complaint.

If you are unhappy with their response, or they do not reply within this timescale, you can refer your complaint to the Claims Management Ombudsman (CMO). See Useful contacts at the end of this guide.

The CMO is part of the Financial Ombudsman Service and looks at complaints between claims management companies and their customers. The CMO does this in a fair and impartial way and also has the power to put things right.

You must complain to the company first. The CMO can only look at your complaint if you have first complained directly to the claims management company and given them eight weeks to reply.

Time limits

You usually have six months to refer your complaint to the CMO from the date of the claim management company’s final response. If you do not complain to the CMO within six months of the final response, the CMO may not be able to look at your complaint. Time limits may also apply if what you are complaining about happened some time ago. For more information, contact us for advice.

Useful contacts

Financial Conduct Authority Phone: 0800 111 6768 www.fca.org.uk

Claims Management Ombudsman Phone: 0800 023 4567 cmc.financial-ombudsman.org.uk

• understand what you can complain about;
• get tips on making an effective complaint; and
• find out how to take your complaint further.

The sample letter mentioned in this guide can be filled in on our website.

Consumer credit complaints

Companies that carry out consumer credit activities must have permission or authorisation from the Financial Conduct Authority. They must have a formal complaints procedure. If they do not, or if they do not follow the procedure properly, their authorisation may be affected. Without permission or authorisation, a company cannot legally offer credit. Companies that must have permission or authorisation include:

• businesses whose main activity is lending and hiring;
• debt collectors if collecting a due under a credit agreement; and
• credit brokers and businesses who offer consumer credit, such as motor dealers and furniture retailers.

The Financial Conduct Authority (FCA) cannot deal with individual complaints. However, as the regulator, they can take action against companies. This means they are interested in collecting information and evidence about poor behaviour. See Useful contacts for details on how to get in touch with the FCA.

If you don't like how a company deals with your complaint, you may be able to take your complaint to the Financial Ombudsman Service.

Financial Ombudsman Service (FOS)

The Financial Ombudsman Service (FOS) plays a very important part in complaints. It does not have the power to fine or punish businesses, but it can help settle disputes between businesses and consumers. The FOS can look into your complaint and can award compensation to you.

Complaints procedure

You can only complain to the FOS once you have gone through your lender’s complaints procedure. See the later section How to complain.

What you can complain about

The FOS can help with most complaints about UK consumer credit products and services.

• Banking.
• Credit cards and store cards.
• Loans and hire purchase.
• Payday loans and pawn broking.
• Debt collectors that are collecting debt owed under a credit agreement.

Some firms may not be regulated by the FCA, for example non-UK firms. However, some of these firms still voluntarily use the FOS. If your complaint is about a firm that is not FCA authorised, check their complaints policy or speak to the FOS.

Who can complain?

There are many companies that offer to help people make complaints but charge a fee for doing so. There is no need to pay. It costs nothing to complain to the Financial Ombudsman Service (FOS). You can also call them for free if you need guidance and information on complaining or you can contact us for advice.

You do not need specialist help to complain. The FOS complaints procedure is easy to follow, and you should not be disadvantaged if you don't have any help. However, if you do not feel happy doing it yourself, you can appoint someone to act on your behalf. You must give them written permission to do this because of data protection rules. The person could be a friend, family member or an organisation such as Citizens Advice. See Useful contacts for how to find your local Citizens Advice.

Resolver

You can make your complaint through Resolver, a free online service providing information and guidance on complaints. Resolver allows you to set up a case for your complaint, so that you can manage the complaint in one place. It helps you keep records of communication and track progress. It will also tell you who to complain to and how to take your complaint further.

Codes of practice

When you make a complaint, you may be able to point out where a company has done something wrong by referring to rules and standards of practice that it should follow.

Consumer Credit Sourcebook

The FCA's Consumer Credit sourcebook is a set of rules and guidelines for companies carrying out consumer credit related activities. It includes information on communication, assessing customers' ability to repay credit and how to deal with customers who struggle to pay. You can search the Consumer Credit sourcebook to see if there are any rules or guidelines that the company should have followed. If you need help with this, contact us for advice.

Standards of Lending Practice – Personal Customers

The Standards of Lending Practice were voluntary standards that firms registered with the Lending Standards Board agreed to follow. High-street banks were included in the list of firms that registered with the Lending Standards Board. The Standards also applied to any third party that acted on the original lender's behalf, for example, a debt collection agency. The Standards may be useful if your complaint is about something that happened between 1 October 2016 and 31 March 2025.

UK Cards Association Best Practice Guidelines

If your complaint is about a credit card or store card, you may be able to refer to the UK Cards Association Best Practice Guidlines. You can look on the UK Cards Association's website to see if your lender is a member.

Payday Loans Good Practice Customer Charter

If your complaint is about a payday loan or a short-term loan, the lender may be a member of a trade association that is signed up to the Good Practice Customer Charter. The charter outlines key commitments that the lenders have agreed to. For more information on dealing with payday loans, including complaints, see our Payday loans guide.

Good Practice Awareness Guidelines

These are guidelines for helping customers with mental health conditions and debt. The guidelines are useful if you have a mental health issue and the lender hasn't taken this into account when dealing with you. If you have a mental health condition, see our Debt and mental health guide.

Other codes of practice

It is worth checking to see if the company you are complaining about has a code of practice that you can use, or if it is a member of a trade association that has a code of practice.

How to complain

Before the FOS will look at your complaint, you must first complain to your lender.Ask your lender for a copy of their complaints procedure. This will tell you how you can expect your lender to deal with your complaint, and in what timescale.

• Write to your lender explaining your complaint.
• Set out the facts as clearly as you can.
• Say what you are not happy with, and what you want them to do about it.
• Include any evidence that you feel supports your complaint.
• You may find our sample letter Complain to your lender helpful.

By law, your lender has eight weeks to respond to your complaint. The FOS is not able to look into your complaint before this time period is up. They can still offer information and guidance. See the later section Useful contacts for how to contact the FOS.

If you are not happy with your lender's response to your complaint

If you are not happy with the outcome of your complaint to your lender, or they do not respond at all, you can take your complaint to the FOS.

You have six months from the date of your lender's final response to take your complaint to the FOS. Often your lender will tell you when their response is final. It may be their only response to your complaint. If you are not sure, ask your lender. If you do not complain to the FOS within six months, they may not be able to help. Time limits may also apply if what you are complaining about happened some time ago, or you left it too long after you knew, or should have known, there was a problem. Contact us for advice.

To make a complaint to the FOS, you need to fill out their complaints form. This is available on their website www.financial-ombudsman.org.uk, or phone them on 0800 023 4567. They can help you to fill the form in over the phone.

The FOS's decision

The FOS will investigate your complaint and tell you what the outcome is. If your complaint is upheld, the FOS will say what the lender should do to put things right. This may include your lender being told to pay you compensation.

If you accept the decision, it will be binding on the lender. This means they will have to do what the FOS tells them to do, although the lender may ask for the decision to be reviewed. If you do accept the decision, it may stop you being able to take the lender to court for the same complaint.

If you do not agree with the FOS's decision, let your case handler know as soon as possible and ask that your complaint be looked at again. The FOS will let you know when it has reached a final decision.

If you do not accept the FOS's decision, the lender does not have to act on any suggestions by the FOS to put things right. There is no right of appeal if you do not agree with the FOS's final decision, but you can still take your lender to court. See the later section Unfair relationships test.

Unfair relationships test

The Consumer Credit Act 2006 brought in new rules about 'unfair relationships' between borrowers and lenders. You may be able to take court action if you feel that the relationship with your lender is unfair to you because of:

• the terms of the agreement with your lender; or
• the behaviour of the lender.

If the court decides that there is an unfair relationship, they have a wide range of powers. For example, the court can change the terms of the agreement or order the lender to pay money back to you.

There is no defined list of what makes a relationship unfair. Although the Office of Fair Trading (OFT) has closed, its website still provides information about unfair relationships and examples of cases which you may find useful.

There is a fee to pay when you put in a direct claim for an unfair relationship. It may be possible to get help with the fee, see our Help with court fees guide for further information. Even if you get help with the court fee, making a claim that a relationship is unfair is complicated and you could be asked to pay considerable extra costs if your claim is not successful.

Complain first

Only a court can decide if an agreement is unfair under the rules. However, it is usually better to complain to the FOS before making a claim for an unfair relationship. This is because taking court action using these rules is complicated and there is a risk of extra costs if your claim is not successful. There is no cost for complaining to the FOS and you can still put in a court claim if you do not agree with the FOS's decision. See the earlier section Financial Ombudsman Service (FOS).

Contact us for advice if you are considering making an unfair relationship claim.

Your agreement and the unfair relationship rules

The unfair relationship rules apply to new agreements from 6 April 2007 and all existing agreements from 6 April 2008.

The rules cannot usually be used for regulated mortgage contracts. Regulated mortgage contracts include first charge mortgages and secured loans. The rules can be used for some secured loans that were taken out before 21 March 2016, contact us for advice.

Harassment

If you owe money, your lender or a debt collector is allowed to contact you to ask for payment. However, they must not threaten or harass you. If you think the behaviour of your lender or debt collector might be harassment, you can complain. The FCA's Consumer Credit sourcebook has rules and guidance on how companies should behave when collecting debts. Contact us for advice if you are not sure whether you can make a harassment complaint.

To find out more, see our Harassment by creditors guide.

Useful contacts

Citizens Advice Independent, free advice on debt, housing and benefits. Phone: 0808 223 1133 www.citizensadvice.org.uk

Citizens Advice consumer helpline Free and independent advice on consumer issues. Phone: 0808 223 1133 www.citizensadvice.org.uk/consumer/

Financial Conduct Authority Phone: 0800 111 6768 or 0300 500 8082 www.fca.org.uk

Financial Ombudsman Service Phone: 0800 023 4567 or 0300 123 9123 www.financial-ombudsman.org.uk

MoneyHelper Useful information about making a complaint. Phone: 0800 138 7777 (English), 0800 138 0555 (Welsh) www.moneyhelper.org.uk

Other guides that may help you

Debt and mental health guide

Harassment by creditors guide

Help with court fees guide

Payday loans guide

You may find that rising prices push you into a deficit budget. You have a deficit budget if the money you need to spend each month on living costs is higher than the money you receive each month from work and benefits.

Consider essential costs only

A deficit budget means not having enough money to pay for essentials such as your home, food or travel to work. Do not include debt repayments at this point, just essential living costs. Debt payments are paid after essential household bills. Does your income cover your household bills if you don't pay any debts?

If you are worried about not being able to meet your debt repayments, see the later section Unable to make a payment.

One impact of having a deficit budget can be that you start to rely on credit to top up your income. For example, you may find that you are using a credit card, going further into an overdraft, or asking friends or family for help. If you remain in a deficit budget situation, your debt levels will keep increasing and eventually it may not be possible to borrow any more money.

A deficit budget can also mean you cannot afford to pay for essential bills like your mortgage, rent, or gas and electricity.

Missing essential household bills

Your home or essential services could be at risk if you miss payments on household bills. Contact us for advice if you are struggling to make payments on your bills or if you have already missed some payments.

A deficit budget can also stop you from being able to put money aside for one-off bills such as car repairs, house maintenance or emergencies like a washing machine breakdown.

Completing a budget sheet

You can use My Money Steps to work out your budget.

The budget sheet is split into fixed costs and flexible costs. Fixed costs are items such as mortgage or rent, council tax, gas, electricity, water and insurances. Flexible costs include spending on food, clothing, hairdressing, socialising, meals at work and pocket money.

Take time to complete your budget sheet and think about whether it is accurate. For example, if a family member pays something for you, make adjustments for this in the budget sheet. Make sure you are realistic, even if you are spending more than you have coming in. Don't be tempted to stop putting figures into the budget sheet just because it shows you are spending more than your income. You need to work out what you need to spend and what you would like to budget for. Once you have done this you can start to look at where you might be able to make changes.

If you have a debt such as a county court judgment (CCJ) or a magistrates' court fine that is up to date, you need to add it to the budget. Not paying could have serious consequences. Contact us for advice if you cannot afford the payments you are required to make. You can also find more information in our Varying a CCJ guide and our Magistrates' court fines guide.

If you have other priority debts with a payment plan in place, these payment arrangements may also need to be changed. Contact us for advice if this affects you.

Increasing income

Some people do not get all of the income they are entitled to. This makes it harder to afford living costs. There are a number of ways you may be able to increase your income.

• Check if you are claiming all the benefits you are entitled to. You can look at GOV.UK or Turn2us for benefits calculators that you can use. If you are in Wales, Advicelink Cymru can help you check and claim benefits that you may be entitled to.
• Can you increase your hours at work or get any overtime?
• If you don't work, can you look for work, either part-time or full-time? If you have a part-time job, could you ask for more hours or look for a second part-time job? Could your partner look for some work? Are there any other members of the household, such as adult children, who can contribute? Can they contribute more than they do now?
• If you have a spare room, could you rent it to a lodger? The government has a Rent a Room Scheme that allows you to earn some income from a lodger tax free. The Citizens Advice website has information on important points to consider if you are thinking about taking in a lodger, such as whether you need permission and the possible impact on insurance and benefits.

Impact on benefits

If you are receiving any benefits, check whether taking on extra work or a lodger will affect your benefit entitlement.

Reducing costs

Reducing living costs can be difficult to do. You need to think carefully about this. Ask yourself if you can really live on the amounts you decide to set for yourself. Think about how long you need to live on a reduced budget and ask yourself if it is realistic to manage for so long with lower spending.

Reducing your flexible costs

• Can you reduce how much you spend on clothing? Don't be tempted to remove this figure from the budget completely as you are likely to need some clothing or footwear in the long run. If you have children, remember they may need school uniforms too. See GOV.UK for information on getting help with the cost of school uniforms.
• Can you take food from home to eat at work rather than buying food at work?
• Can you reduce your food and toiletries bill by shopping around?
• Can you reduce your smoking costs? Your GP may be able to help with this. The NHS has a Quit Smoking website and mobile app that can help.
• Make sure you are not paying for health costs that you could get reduced or free. If you live in England, see the NHS website. In Wales the situation is slightly different, and the information is on the Welsh Government website.
• Use price comparison websites to shop around for cheaper car and home insurance.
• Look for the best mobile phone, TV and internet deals. If you get certain benefits, you may be eligible for a social tariff which offers reduced prices for broadband and some landline services. For information on social tariffs that are available, see the Ofcom website. If you cannot find a cheaper tariff and you are struggling to pay a broadband or mobile bill, you should contact your provider. The UK's biggest providers have committed to help customers struggling with the rising cost of living to stay connected.
• Can you travel by public transport instead of using a car? If you use public transport, is it cheaper if you buy a weekly or monthly travel pass or a season ticket?

For more tips on saving money on essential costs, see our Costs of living: making the most of your money page.

Short-term steps

You may be able to take short-term steps to help balance your budget quickly. Stopping some spending may allow you to have enough money to pay for essential bills such as your mortgage or rent, council tax, gas and electricity and TV licence.

Steps you may be able to take include stopping spending on items like clothing, socialising, meals at work, house maintenance, gifts, pocket money, hairdressing and opticians and dental costs. However, in the long-term, you will need to add this kind of spending back into your budget.

Long-term steps

You may be able to reduce your spending on some fixed costs. This could reduce your spending now and in the long term.

• If you pay your council tax over 10 months, you may be able to pay over 12 months instead. This will reduce the amount you pay every month, but you will not get a payment break in February and March. Contact your council to ask about this.
• If you pay for a car or household items on hire purchase, you may be able to return these goods. This will mean you will not need to include these items in your budget as an essential payment. Contact us for advice if you are thinking about doing this. You can also find more information in our Hire purchase debt guide.
• Check if you can reduce the cost of your water bills. The CCW website has details of help that may be available, including tariffs which can reduce bills for some customers.
• You might need to consider whether you can afford to pay the mortgage or rent where you live. Could you think about downsizing? Sometimes mortgage lenders might offer help such as extending the term of the mortgage to reduce your monthly mortgage payment. Contact us for advice.

Still in deficit

It is not always possible to sort out your deficit budget by increasing income and reducing costs. If your budget is still in a deficit after you have reviewed your income and expenditure, you may need to decide which essential costs are not affordable. Contact us for advice if you feel that you are in a position where you have to stop paying an essential household bill.

Missing essential household bills

If you miss payments for essential household bills your home or essential services could be at risk. Contact us for advice before you miss any essential bills.

Emergency situations

Some of the steps above might take some time to put in place. While you are taking steps to change your income and expenditure, you might struggle to buy essentials such as food. When you apply for benefits, there is often a waiting period before your first payment.

• Food banks can give you a minimum of three days’ food in an emergency. For information about your nearest food bank go to the Trussell Trust website or contact us for advice.
• If you are claiming benefits, you might be able to claim an advance payment. This is repayable but might help with one-off expenses or allow you to pay for essentials until your benefits start. See GOV.UK for more information about a Universal Credit advance. If you claim Jobseeker's Allowance, Employment and Support Allowance, Income Support or Pension Credit, see GOV.UK for more information on advances you could claim.
• If you live in England, your council may have a local welfare assistance scheme that can help in an emergency situation, such as not having enough money for food or to put your heating on. Councils decide their own rules for their schemes. Contact your local council to see if they have a scheme that can help you.
• If you live in Wales, you may be able to apply for an Emergency Assistance Payment to help with your costs such as food, gas, electricity or clothing in an emergency situation.
• If you are moving, you could stop paying some essential bills. It is important you are sure you are moving before you do this. If this is something you are thinking about, contact us for advice. Whether you can stop making payments will depend on what you can afford and what the law says about what can happen if you miss payments.

Increasing debt

If you don't pay an essential bill, it will create debt. Stopping essential payments could see further charges being added and is likely to leave you with a debt to pay later.

Unable to make a payment

If you know that you will struggle to make a payment to a creditor, contact them as soon as you can to explain your situation. Your creditors are organisations or people that you owe money to, for example banks, councils or family and friends. Most organisations follow rules or codes of practice that say they should offer help if a customer is having difficulty making payments.

Telling your creditors if you are struggling will also give them an opportunity to let you know how they can help you. Help that creditors may be able to offer includes:

• flexibility with repayment dates;
• offering a payment break or payment holiday;
• agreeing an affordable repayment plan based on your budget sheet; or
• offering you a cheaper alternative if you are struggling to meet the ongoing costs of an essential service.

Contacting your creditors can prevent things getting worse, for example it may:

• stop creditors adding interest or late payment charges;
• stop creditors starting debt recovery action; or
• reduce the risk to goods and service that are essential to you.

Credit reference file and future borrowing

Lenders usually use your credit reference file when deciding whether to give you credit. Your credit reference file holds factual information, which can include your payment record on some agreements. Ask your creditor whether the options they offer you will affect your credit reference file.

For more information on credit reference files, see our Credit reference agencies guide.

Who to contact first

Some creditors are more important than others as they have greater powers to recover money that is owed to them. Make a list of your creditors and contact your priority creditors before non-priority creditors.

Priority creditors have more power to get you to pay. For example, landlords and mortgage lenders are usually priority creditors because your home could be at risk if you do not pay them. Common priorities include rent, mortgage, council tax, TV licence and hire purchase agreements.

Non-priority creditors have less power to get their money back. Common non-priorities include credit cards, overdrafts, unsecured loans, payday loans and catalogues. You do still need to deal with non-priority creditors as they could still take you to court.

Contact us for advice if you are not sure which creditors should be treated as a priority.

What to say when you contact a creditor

You should be able to find contact details for your creditors on any letters you have from them or on their website. Most creditors provide different ways to contact them. Choose the method that you are most comfortable with.

List what you want to discuss with your creditor before you contact them. The following is a list of things you may want to say.

• Tell your creditor that you are struggling to pay and explain why. For example, a sharp increase in your gas and electricity bill may mean that you don't have enough money to meet other payments.
• If you have completed your budget sheet, let your creditor know what it shows or provide them with a copy of your budget summary. This will help your creditor understand what options are realistically available to you.
• If you have a disability, are suffering with poor physical or mental health or are in a vulnerable situation, let your creditor know if this makes it more difficult to deal with your finances or to deal with them. Your creditor may have a specialist team that can offer you more support if you are vulnerable.
• Ask your creditor how they can help you. Don't feel pressured into accepting a particular option straightaway. Let your creditor know if you would rather make a note of what your options are and then take time to work out what suits you best.
• If you have not already had debt advice, ask your creditor to give you time to get advice. See the later section How to deal with your debts.

How to deal with your debts

There is no set way of dealing with debts. The best solution for you will depend on what your situation is. By speaking to a debt adviser, you can get an understanding of what steps you need to take to deal with your debts in the best way for your circumstances. See the Get help section of our website for details on how to speak to a National Debtline adviser.

You can also find useful guides on different types of debt and debt solutions in the A-Z debt advice section of our website. Our Ways to clear your debt guide also provides an overview of the different ways you can deal with your debt and how each debt solution works.

Breathing Space

If you need time to get debt advice and find a debt solution, you may want to consider applying for breathing space. Breathing space will stop most types of enforcement, and also stop most creditors applying interest and charges, for 60 days.

To find out more, see our Breathing space guide.

Make sure you're getting all the benefits you should be. It's estimated that at least seven million people aren't claiming the benefits they should be, and any extra income will help you pay for essential items.

There are lots of different types of benefits. Each benefit has its own set of rules. What you are entitled to will depend on your personal circumstances. It can be affected by things such as your age, household income, savings, National Insurance contribution (NIC) record and whether you are able to work.

We have listed some of the main benefits below. If you click on the relevant benefit you'll find more information about the benefit, the eligibility criteria and how to apply.

You can do a free personalised benefits check with Turn2us in less than 10 minutes. Millions of people already have, so don't miss out: go to Turn2us and see what you could get.

Out of work and low income

• Universal Credit is now the main benefit for people who are out of work or are on a low income. Depending on your situation, Universal Credit can also help with housing costs, the costs of raising a child and childcare costs.
• If you are looking for work, you may be able to claim New Style Jobseekers' Allowance.
• If you have a low income or receive benefits, you may be eligible for a Council Tax Reduction.

Children

If you have children from a former relationship, check you are getting the correct amount of child maintenance. You can find advice and arrange child maintenance on the GOV.UK website. If you are unable to use the website, you can speak to a Child Maintenance Service case worker on 0800 171 2345.

• If eligible, Universal Credit can help with the costs of raising a child and childcare.
• Most people with children can also claim Child Benefit.
• You may be able to claim Maternity Allowance if you need to take time off work to have a baby.
• A sure start Maternity Grant is £500 that can help with the costs of having a child if you receive certain benefits.

Ill or disabled

• Personal Independence Payments can help people aged over 16 with the costs of a long-term health condition or disability.
• If you are employed but too ill to work, you may be entitled to Statutory Sick Pay.
• New Style Employment and Support Allowance can help people who do not receive Statutory Sick Pay but have limited capability to work due to illness or disability. It can be claimed alongside Universal Credit.
• If you look after someone who is ill or disabled for at least 35 hours per week, you may be able to claim Carer’s Allowance.

People over pension age

• You may be able to claim Pension Credit if you are over state pension age and are on a low income.
• If you are eligible for Pension Credit you will also receive a free TV Licence.

Housing costs

• Depending on your situation Universal Credit has a housing element which can help with your rent, or you may be able to claim Housing Benefit.
• If you receive certain benefits and own a property you may be able to claim Support for Mortgage Interest to help you with your mortgage costs.

Help from charitable grants

Lots of organisations have set up charitable funds that give grants if you are in financial difficulty. This is money that could help make your situation easier to manage and you do not need to pay it back.

Each organisation has its own rules for who it will help. These vary and could, for example, be based on:

• where you live;
• you, or your partner’s, current or previous job;
• whether you have any medical needs; or
• your financial situation.

Turn2us can search over 1,600 charitable grants for you. Use the Turn2us Grants Search tool to find charitable organisations that might be able to help you. Go to https://grants-search.turn2us.org.uk. It takes less than five minutes on average.

See our Help from charitable organisations guide for more information along with tips on applying for a grant.

Energy and water grants

Several energy and water providers have charitable grants that can help people to pay their bills if they are in financial difficulty. Details of any grants will be on your energy supplier's website. You can also find water and energy grants through the Turn2us grants search.

Help from government support schemes

The government has announced a range of support to help households with rising energy bills and living costs.

Cost of Living Payment

2023 Cost of Living Payment

The government has announced a further £900 Cost of Living Payment for 2023. It will be paid in three instalments.

• £301 first instalment to be paid from 25 April 2023.
• £300 second instalment to be paid from 30 October 2023.
• £299 third instalment to be paid from 6 February 2024 .

To be eligible for the first instalment you must have been entitled, or later be found to be entitled to payment of:

• Child Tax Credit or Working Tax Credit for any day in the period 26 January 2023 to 25 February 2023;
• Universal Credit for an assessment period that ended in the period 26 January 2023 to 25 February 2023; or
• either income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support or Pension Credit on any day during the period 26 January 2023 to 25 February 2023 .

To be eligible for the second instalment you must have been entitled, or later be found to be entitled to payment of:

• Child Tax Credit or Working Tax Credit for any day in the period 18 August 2023 to 17 September 2023.
• Universal Credit for an assessment period that ended in the period 18 August 2023 to 17 September 2023; or
• either income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support or Pension Credit on any day during the period 18 August 2023 to 17 September 2023.

To be eligible for the third instalment you must have been entitled, or later be found to be entitled to payment of:

• Child Tax Credit or Working Tax Credit for any day in the period 13 November 2023 to 12 December 2023.
• Universal Credit for an assessment period that ended in the period 13 November 2023 to 12 December 2023.; or
• either income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support or Pension Credit on any day during the period 13 November 2023 to 12 December 2023.

Disability Cost of Living Payment

2023 Disability Cost of Living Payment

The government announced a further £150 Disability Cost of Living Payment for 2023. This was paid in Summer 2023.

To be eligible, you will needed to have received (or later receive) a payment of a qualifying benefit for 1 April 2023.

For more information, see GOV.UK.

Pensioner Cost of Living Payment.

2023 Pensioner Cost of Living Payment

The government announced a further £300 Pensioner Cost of Living Payment for 2023. This will be paid in from November 2023.

For more information, see GOV.UK.

Other government support

There are other support schemes which were already in place that may help you with paying for some of your essential items. We’ve detailed these below. If you find yourself struggling to pay your bills, buy food or need to purchase an essential item you should speak to your local council to see what help they can provide.

Household support fund (England only)

The Household Support Fund allows councils to give small grants to help vulnerable households meet essential costs, including paying for food and energy bills. Contact your local council to check if you may be eligible for support from the fund.

Welfare assistance schemes

In England, some councils have a welfare assistance scheme which can help if you are in an emergency situation. Individual councils decide on the rules for their scheme. Contact your local council to see whether they run a welfare assistance scheme and what it offers.

The government in Wales has made £25 million available to local authorities to provide support to households struggling with the rising costs of living. This discretionary fund may be able to help you with heating costs. Contact your local council for details of their scheme and how to apply.

• understand what a council can do to recover a council tax debt;
• deal with bailiff action; and
• help you negotiate with the council about the debt.

Council tax is a priority debt

This guide is about how your local council may try to collect council tax arrears. Council tax is a priority debt because the council has strong powers to make you pay. This means you should pay council tax before paying non-priority debts such as credit cards or unsecured loans.

Who pays what?

The amount of council tax you pay is based on the value of your home and the number of adults that live in it.

Only people  over 18 can be made to pay the bill. If there is more than one person  over 18 living in your home, the owner will normally have to pay the bill if they also live there.

If you are married, live with your partner or live together in a same-sex civil partnership, both you and your partner will be potentially responsible for paying all of the bill. This is known as ‘joint and several liability’. If joint tenants, joint owners or partners are named on the original council tax bill they are jointly and severally liable.

You cannot be asked to pay council tax if you are not named on the bill. However, if a joint tenant, joint owner or a member of a couple is not named on the bill, the council can send out another bill adding their names. Once the council has done this they can ask can anyone named on bill to pay.

In some circumstances, you can be liable for council tax even if you do not live in the property. This may be, for example, because you own a property that no-one currently lives in, or it is classed as a house of multiple occupation (HMO).

If you are not sure who is responsible for the bill,  contact us for advice.

Reducing your council tax bill

Depending on your circumstances, you may be entitled to a reduction to, or discount on, your council tax bill. This could mean that you do not have to pay all, or part, of your council tax bill.

We have listed some of the help that may be available. For more information and to make an application, contact your council.

Council Tax Reduction

If you are on a low income, you may be entitled to Council Tax Reduction (also known as Council Tax Support). Each council in England and Wales can create their own local Council Tax Reduction scheme. This means that the rules and amount of reduction you may be entitled to can vary from council to council.

Disability reduction

You may get a reduction to your council tax bill if someone living in the house has a disability.

Discounts

You may be able to get a discount to reduce your council tax bill if:

• you are the only adult in the property: or
• you share your house only with people who are not counted for council tax purposes.

Examples of people who are not counted include:

• a full-time student or student nurse;
• an apprentice or someone on a youth training scheme (only certain ones apply); or
• someone with a mental disability who is getting certain disability benefits.

Second Adult Rebate

If you live in England, you may be able to claim the Second Adult Rebate if you share your home with another adult person who:

• is on a low income;
• is not liable to pay the council tax bill; and
• does not pay rent to you.

The rules for the Second Adult Rebate are complicated, but you can check whether you are eligible with your local council.

Discretionary reduction

The council also has the discretion to reduce your council tax bill (or previous debt) in part or in full. They can consider a discretionary reduction if you are liable for the council tax and there are exceptional circumstances, such as severe financial hardship. If you think you could be eligible for a discretionary reduction to your council tax, contact us for advice.

Council tax premiums

Sometimes the council can charge you a higher amount of council tax than usual.

In England

The council can add an extra amount (a premium) to your council tax bill if your property has been empty and unfurnished for at least one year. The council will decide whether to apply the premium to properties in its area. The extra amount the council can charge will depend on how long your property has been empty.

From 1 April 2025, some councils may decide to charge a higher amount of council tax because your property is furnished, but only occupied from time to time, for example, as a second home. If your council has decided to apply this type of premium, it can add up to an extra 100% of council tax to your bill. 

If your council has added a premium to your council tax bill, check whether you are entitled to an exemption.

In Wales

The council can add an extra amount (a premium) to your council tax bill if your property:

• has been empty and unfurnished for at least one year; or
• is furnished, but only occupied from time to time, for example, as a second home.

The council will decide whether to apply the premium to properties in its area. It can also decide how much the premium will be, up to a maximum of 300%.

If your council has added a premium to your council tax bill, check whether you are entitled to an exemption.

Council tax liability order

If you fall behind with council tax payments, the council may apply to the magistrates’ court to make a ‘liability order’. This is a court order that states that you owe council tax but have not paid it. The council will also add on any court costs they have had to pay.

The council can ask for a liability order to be made against the person that they sent the original bill to. If another person is also responsible for paying the bill, the council can ask for a liability order against both people.

If you are having trouble keeping up with your council tax payments, don’t just stop paying. Contact your council and explain you are having difficulty. They may be able to agree a new payment plan with you. If you do this quickly, the council may not apply for a liability order. 

The council should not apply for a liability order if it has been more than six years from the date your debt became due (when the council first sent a bill to you for this council tax debt).

Once the council has obtained a liability order, there is no time limit for enforcing it. However, if the council took a long time to get the liability order, or a long time to ask you to pay, then you could complain. Contact us for advice.

What can a liability order lead to?

If the council gets a liability order and you do not pay the amount stated, they can ask you to give them certain information. See the following section,  Information request.

The council can use this information to decide how to recover the unpaid council tax. For a list of the further action that a council could take, see the later section,  Types of enforcement action.  

Information request

The council must ask you for this information in writing. They can ask you to tell them:

• the name and address of your employer;
• about your earnings or what you expect to earn;
• information about certain deductions taken, or expected to be taken, from your pay ( such as an attachment of earnings order);
• the work or identity number used by your employer;
• about any other income you get (such as pensions or benefits); and
• whether anyone else is also liable for the debt.

You have 14 days to give the council these details. It is a criminal offence not to respond or to provide false information. If the council has sent you an information request, but you do not have the information available, contact us for advice.

How to make an offer

You can make an offer of payment to the council at any time before they use enforcement action. Making an offer could stop further action from happening.

Work out how much you can afford to offer the council each month to pay towards your council tax arrears. You can use My Money Steps to work out your budget. Send your budget and your offer of payment to the council as soon as possible. Start making your payments straight away.

Usually, the council will want you to pay your arrears within the current council tax year. Sometimes, they may refuse your offer. If this happens, start making your payments straight away. This will show the council that your offer is affordable and begin to reduce your arrears. Ask the council to reconsider your offer and take your financial circumstances into account. Your budget gives the council this information.

Each time you make a payment, include the council tax reference number and the liability order number if there is one. Also tell the council which council tax year your payment is for. If you do not tell the council which debt your payment is for, they may allocate all of your payments to the current year's bill. If you have council tax arrears for more than one year, this could lead to unnecessary enforcement action on your older debt.

Check for reductions or discounts?

Remember to check whether you are entitled to a reduction to, or discount on, your council tax bill. See the earlier section, Reducing your council tax bill.

If you have already applied for a reduction or discount and are still waiting for a decision, tell the council when you make your offer of payment.

Types of enforcement action

Once the council has obtained a liability order in your name, they can take further action against you. This is called 'enforcement action' and can include:

• using bailiffs to try to take your goods;

• making deductions from earnings;

• making deductions from benefits;

• charging orders (where the debt is secured on a property you own);

• bankruptcy; and

• imprisonment.

The council can decide which type of enforcement action to use. However, they can only use one type of enforcement action at a time for each liability order that they have in your name. In later sections of this guide, we describe each type of enforcement action in more detail.

Although there are different types of enforcement action, most councils prefer to use bailiffs or deductions from earnings to try to recover unpaid council tax.

If action is being taken against you that is not described in this guide, or you have received paperwork you do not understand, contact us for advice.

Council tax bailiffs

Bailiffs are also commonly known as 'enforcement agents'. In this guide we use the term bailiff.

Council tax is usually collected by a private firm of bailiffs on behalf of your local council. They try to take your goods away and sell them, usually at auction, to raise money to pay the debt. The council can instruct bailiffs to act once they have got a liability order against you. The process the bailiffs have to follow is called 'taking control of goods'.

The bailiff must be 'certificated'. This means that they must have a certificate from the County Court allowing them to act as a bailiff. You can check if a bailiff has a current certificate by searching the Certificated Bailiff Register at https://certificatedbailiffs.justice.gov.uk/.

The bailiffs should give you  seven clear days' notice that they are due to visit you. This is sometimes known as an 'enforcement notice'. 'Clear days' do not include Sundays, Christmas Day or bank holidays.

A bailiff may ask you to agree to making a 'virtual' or non-entry controlled goods agreement (CGA) when they initially contact you by telephone or letter, rather than coming to visit your property to take control of goods.

If you are considering whether to agree to making a virtual CGA, contact us for advice

Do I have to let the bailiffs in?

You do not have to let the bailiffs into your home. Bailiffs are only allowed to force their way into your home if all three of the following points apply.

• They have taken control of your goods inside your home.

• If you made a controlled goods agreement (CGA) with the bailiff, you have broken the CGA by missing at least one payment.

• They have given you two clear days' notice that they are coming to inspect or take these goods.

Politely but firmly refuse to let the bailiffs in, without opening the door to them. Offer what you can afford to pay. If the bailiffs accept your offer, ask them to return to their car and go out and pay them. Make sure you get a receipt.

If you have not let the bailiffs in before, keep your doors locked. A bailiff is allowed to come into your property through an unlocked door, even if you are not in at the time. Although bailiffs should not enter through a window, it is a good idea to keep windows closed.

A bailiff can take control of goods outside your home, so if you have a vehicle, keep it in a locked garage. If you park the vehicle on your drive, the bailiffs could clamp it.

You could park the vehicle away from your property, but if you park it on a public road and the bailiff finds it, they could clamp and possibly remove it. Contact us for advice.

What if the bailiffs have already been inside my home?

If you have already let a council tax bailiff into your home, it is important to bear in mind the following points.

The bailiff will not usually take away goods on their first visit.

They may ask you to sign a 'controlled goods agreement'. This allows you to keep using the items listed on the agreement. However, if you break the terms of the controlled goods agreement, the bailiff can return and take the goods by breaking in if necessary. They should give you  two clear days' notice before doing this. If you don't sign the agreement, the bailiff may remove the goods straight away or lock up the goods on your premises.

A bailiff may not be able to take goods that are worth more than you actually owe. If they threaten to do this, contact us for advice.

Council tax bailiffs should not take:

• clothing, bedding, furniture and basic household items (such as a refrigerator or a cooker or microwave) that are necessary for the basic domestic needs of you and your family;

• tools, books, telephones, computers, vehicles and other items of equipment that are necessary for use personally in your job, business or education (up to a value of  £1,350); and

• items you or someone else is physically using where taking the goods is likely to lead to a breach of the peace.

This is not a complete list of the goods that bailiffs should not take. If you are unsure whether an item is exempt or not, contact us for advice.

If a bailiff takes control of goods that are protected, you can make a court claim for the goods to be returned. Contact us for advice.

Can bailiffs take goods belonging to someone else?

The bailiff can only take goods belonging to the person (or people) named on the liability order. They should not take goods that belong to other people, including rented goods. If they threaten to do this, explain that the goods do not belong to you. Show a receipt or credit agreement as proof. If the owner hasn't got a receipt, they can provide a sworn statement called a 'statutory declaration' instead. Contact us for advice.

If a bailiff takes good belonging to a third party, the third party can write to the bailiff to show that they own the goods and that they should not have been taken into control. The bailiff should then pass this onto the creditor. The creditor will decide whether to accept or reject the third party's claim.

If the creditor rejects the claim, the third party can apply to court to get the goods back. However, they will need to pay the court a deposit. The size of the deposit depends on the value of the goods that have been taken. Contact us for advice.

Bailiffs can take goods that are jointly owned by you and your partner, but if you are the only person named on the liability order, they are only entitled to your share of the goods.

Can bailiffs take goods on hire purchase or conditional sale?

There are different legal views about whether bailiffs can take control of goods on hire purchase or conditional sale agreements. If a bailiff threatens this, contact us for advice.

What if there are no goods to take?

If the bailiffs come into your home, they may decide that your goods are not worth enough to cover the cost of them coming with a van to remove and sell them. If this is the case, the bailiff may return at a later date to try and take control of your goods. They have  12 months from the date of the enforcement notice to take control of your goods. If you agree instalments on the debt with the bailiff and you do not pay, the  12 months will not start until the arrangement has been broken.

A bailiff should only take enough goods to cover the debt after they are sold. They should not take goods that are worth a lot more than you actually owe unless there is only one item that the bailiff thinks is worth taking, such as a car.

What if I hide things away?

If the bailiffs haven't yet been in and you hide things by taking them somewhere else, the bailiffs may apply to court for permission to break into the place where you have put the goods. If the bailiffs have already been in and taken control of your goods, you are committing an offence if you remove goods that they have said they will take.

Bailiff procedures

If the bailiffs are collecting council tax arrears, there are certain procedures that they have to follow.

They must have identification and written authorisation from the council with them when they call. They should show you this if you ask.

Under the law, bailiffs have to leave you paperwork explaining what they intend to do or what they have done. For example, bailiffs should give you notice telling you:

• that they intend to visit you;

• when they have taken control of your goods; and

• when they intend to re-enter your premises after a previous entry.

There are strict rules about the information this paperwork must contain. If the bailiffs do not give you the correct paperwork, you can complain or consider taking legal action against them. Contact us for advice.

What fees can the council tax bailiffs charge you?

Council tax bailiffs can charge you the following fees if they start the type of action described.

• £75  for being instructed by the creditor, carrying out initial checks, investigations and receiving payments.

• £235  to cover visiting and entering premises and taking control of your goods.

• £110  to cover attending to remove your goods for sale, valuing them and arranging for them to be sold.

• The cost of storing goods which the bailiff has removed.

• The cost of hiring a locksmith, if one is needed.

If your debt is over  £1,500 or if your goods are sold at auction, further fees can be charged. Contact us for advice.

The bailiffs should give you information about how much you owe before and after they visit you. If you think they have charged you too much,  contact us for advice. You may be able to challenge the fees through the County Court.

How do I stop the bailiffs?

• Try to make an arrangement to pay the debt back at a rate you can afford. Send the bailiffs a letter with your budget and ask them to accept regular payments.

• It is usually easier to get the bailiffs to accept your offer if they have never been into your home or listed any of your goods to sell, such as your car. Even if the bailiffs refuse your offer, start making the payments. The bailiffs will add these to your account and it shows you are willing to pay. Always get a receipt for any money you pay.

• If a bailiff returns your payment to you, contact the council. Explain what has happened and ask the council to accept the payment.

• If you have made regular payments to your council tax debt and can show that you are paying the arrears off, you could ask the council to take the account back from the bailiffs. Unless the council agree to this, the bailiffs can still collect the debt.

• If you are in a vulnerable situation, for example, you are unwell, let the council know. Ask the council if they have a vulnerability policy, as they may need to be more flexible in how they ask you to pay the debt.

• It is very important to make an arrangement to pay the council if your account has gone back to them. If you do not, they may try other ways of recovering the money, such as taking money out of your wages or your benefits.

Deductions from earnings

This is when the council asks your employer to take regular deductions from your earnings to repay the debt you owe. It is called an 'attachment of earnings order'. The deductions will be made from your 'net income' and are made on a sliding scale depending on how much you earn. 'Net income' means the income you have left after paying your tax and National Insurance. This type of enforcement cannot be used if you are self-employed.

Deductions from net monthly income in England

This table shows the deduction rates that apply to attachment of earnings orders made in England on or after 1 April 2007.

Deductions from net monthly income in Wales

This table shows the deduction rates that apply to attachment of earnings orders made in Wales on or after 1 April 2022 .

The deduction rates for attachment of earnings orders made in Wales between 1 April 2007 and 31 March 2022 are the same as those shown in the Deductions from net monthly income in England table.

What can I do about an attachment of earnings order?   

You can ask the council if they will agree to discharge the attachment of earnings order and accept affordable payments from you directly. Although councils have the power to do this, some may be unwilling to agree to this type of request. It is important that you explain your situation fully to the council and include information about how the attachment of earnings order will affect you. For example, if the deduction will create financial hardship, explain this to the council. Use your budget to show the council how much you can afford to pay towards your council tax arrears each month.

Some employers can be annoyed at the inconvenience of making deductions from earnings. In some jobs, being in debt may be a disciplinary offence. For example, if you are in a job handling money, a deduction from earnings could put your job at risk. Check your contract of employment. If the attachment of earnings order could put your job at risk, you may want to use this as a negotiation tactic. Explain to the council that if they do a deduction from earnings, you may lose your job and then they will get less money.

What if I owe more than one year's council tax?

Each council can have a maximum of two attachment of earnings orders in place against you at a time. This is the case even if you owe a council several years of council tax. If you are having deductions made for two attachment of earnings order at the same time and this is causing you hardship, contact your council and explain your situation. Ask the council if they will:

• consider making deductions for the orders consecutively, rather than at the same time; or

• agree to discharge the orders and accept affordable payments from your directly. Use your budget to work out how much you can afford to offer the council each month to pay towards your council tax arrears.

If you owe council tax to more than one council and are being threatened with more than two attachment of earnings orders at a time, contact us for advice.

Deductions from benefits

If you claim benefits, the council can apply for a third party deduction from those benefits once a liability order has been made. The benefits the council can deduct from are Income Support, Pension Credit, income-related or contribution-based Employment and Support Allowance, income-based or contribution-based Jobseeker's Allowance or Universal Credit.

Charging orders

If the debt is for  £1,000 or more, the council can apply to the County Court for a legal charge on the home on which you owe the council tax. The council can only do this if you own the property. This means the debt is 'secured' on your home like a mortgage, and so may put your home at risk. If the council threatens this, contact us for advice.

Bankruptcy

The council can try to make you bankrupt if the debt is  £5,000 or more. This is more likely if you owe council tax bills for lots of different years as they can add these together. If the council has not considered other options, you may be able to complain to the Local Government and Social Care Ombudsman (LGSCO) if the council is in England or the Public Services Ombudsman for Wales (PSOW) if the council is in Wales. See  Useful contacts  at the end of this guide. You will need to complain to your local council first.

If the council threatens to make you bankrupt, contact us for advice.

Imprisonment

If you live in Wales

The law changed on  1 April 2019. Councils in Wales can no longer start any action to ask the court to send you to prison for not paying your council tax.

If you live in England

If the council has used bailiffs and you still haven't paid your council tax in full, councils in England can apply to the magistrates' court to ask for you to be sent to prison. This is rare.

The court should not send you to prison if you cannot afford to pay. They should only do so if they think you have 'deliberately refused' or 'neglected' to pay when you could have done so.

The court must carry out a means enquiry before they decide to send you to prison. This is where they look at the reasons why you have not paid the council tax debt. The court will ask you questions about your situation, including your income, outgoings, debts and assets. Before the means enquiry, the court would need to issue a summons to attend the magistrates' court, or issue an arrest warrant. If you receive a summons from the court, or have been threatened with prison, contact us for immediate advice.

Before you go to the hearing you should get legal advice. Contact a local advice agency, a law centre or a solicitor. Most magistrates' courts have a duty solicitor scheme that may be able to help you. You may qualify under the Legal Help scheme for a solicitor to help you at the hearing depending on your income. When you go to the hearing take proof of your payments and copies of your letters to the bailiffs and the council where you have tried to negotiate an arrangement. Contact us for advice.

Normally the court will order you to pay an amount each month until you have paid the debt. If you do not pay this amount regularly, you will have to go to the court again and may be sent to prison for up to  three months. If you find you can't pay what the court has ordered, keep paying what you can afford and apply to the court to reduce the amount you have to pay. Contact us for advice.

In exceptional circumstances, the court may order the council tax debt you owe to be 'written off' so you do not have to pay the debt back.

How do I complain?

Complaining about the council

If the council has not behaved properly or followed proper procedures, you can make a complaint. You must complain to your local council first. Do this in writing. Set out clearly why you feel they have acted unfairly and explain what you want them to do to put things right. Keep a copy of your letter.

If you do not hear back from the council after  12 weeks, or you are not happy with their response, then you may be able to ask the ombudsman to look at your complaint. You normally need to do this within  12 months  of realising that that the council has done something wrong.

• If your complaint is about a council in England, contact the Local Government and Social Care Ombudsman (LGSCO).

• If your complaint is about a council in Wales, contact the Public Services Ombudsman for Wales (PSOW).

See  Useful contacts  at the end of this guide.

The LGSCO and PSOW have the power to investigate your complaint and decide if they think the council has acted wrongly. If the LGSCO or PSOW finds that the council has done something wrong they could ask them to:

• apologise to you;

• take action or make a decision they should have done before;

• look at a decision again that they did not consider properly in the first place; and

• make a payment to cover your costs or losses.

You could also ask your local councillor to take up your complaint with the council.

Complaining about bailiffs

Bailiffs must follow rules and behave properly when dealing with you. If they do not follow the proper procedures you can complain.

The Taking Control of Goods: National Standards are good practice guidelines that set out the rules and procedures bailiffs should follow. You can mention these in any complaints you make. You can find them on the GOV.UK website www.gov.uk or we can send you a copy.

Write a letter to the bailiff company. Set out clearly why you feel they have acted unfairly and explain what you want them to do to put things right. Keep a copy of your letter.

You can also complain to the council as the bailiffs are acting as their agent. If your complaint is not dealt with, you may be able to ask the ombudsman to look at your complaint. See the earlier section,  Complaining about the council . However, the ombudsman may not be able to look at a complaint if you can ask the County Court to look at it instead; for example, if there is a dispute about who owns the goods.

Enforcement Conduct Board

The Enforcement Conduct Board (ECB) is an independent oversight body for the debt enforcement sector in England and Wales. You can complain to the ECB about accredited enforcement firms and their bailiffs if you have already tried complaining to the enforcement firm or bailiff directly. The ECB can only consider complaints about enforcement action that took place from 1 January 2025 onwards.

You can find details of ECB accredited member firms listed in the Accredited Firms Register.

Some councils use their own in-house Civil Enforcement Officers (CEOs) to collect council tax debt, while other councils use bailiffs who work for private enforcement firms. If your debt is being collected by a private enforcement firm rather than the council’s own in-house CEOs, you can complain to the ECB. The ECB will not handle complaints about a council's in-house enforcement team, despite some being accredited by the ECB.

The ECB website has an online complaints form that you can use to make your complaint. If you aren't able to use the online form you can download the form and email it to:

Complaints.Team@enforcementconductboard.org.

However, the ECB warn that emailing a complaint form to them can cause delays, so the online route is likely to be the best option if you are able to use it.

Complain to the court

You can complain to the court who granted the bailiff their certificate to be able to collect council tax. The court can cancel the bailiff's certificate or suspend it on conditions, for example, that the bailiff is re-trained.

Remember, the bailiff must be certificated. You can check if a bailiff has a current certificate by searching the Certificated Bailiff Register at https://certificatedbailiffs.justice.gov.uk/. If you are dealing with a bailiff who is not certificated, contact us for advice.

You can also make a claim to the County Court for any loss you have suffered. You will need legal advice before doing this. Contact us for advice about finding the right legal advice for you.

Useful contacts

Local Government and Social Care Ombudsman (England) Phone: 0300 061 0614 www.lgo.org.uk

Public Services Ombudsman for Wales Phone 0300 790 0203 www.ombudsman-wales.org.uk

Other guides that may help you

Bailiff complaints guide

Bankruptcy guide

Breathing space guide

Charging orders guide

Statute barred debts guide

Use this guide to:

• find out what county court bailiffs can and can't do;
• see how much a bailiff can charge;
• apply to court to stop county court bailiff action; and
• complain about the way a county court bailiff has behaved.

What are county court bailiffs?

This guide is about county court bailiffs. County court bailiffs can be used when you have a county court judgment that you have not paid as the court has ordered. In some situations, high court bailiffs may also collect unpaid county court judgments. However, the rules about other types of bailiffs are different and are not dealt with in this guide. Contact us for advice.

County court bailiffs work for HM Courts and Tribunals Service. They are responsible to the delivery manager of the County Court hearing centre that they work for.

Changes to bailiff law

On 6 April 2014 , the law on bailiffs changed. If you are unsure whether a bailiff's actions are legal, contact us for advice. Bailiffs are also commonly known as enforcement agents. In this guide we use the term bailiff.

Bailiffs will visit your home or business premises and try to make a list of your goods. This is known as a 'controlled goods agreement'. The bailiffs will then demand that you pay them the money owed. You may be able to come to an arrangement to pay what you owe by instalments. If you do not pay, they can return to remove the goods listed on the controlled goods agreement. They must have followed the correct procedures to be able to do this.

Instead of making a controlled goods agreement, county court bailiffs may also remove your goods straight away or, as a last resort, lock them up in a room on your premises.

In this guide we explain the main rights of county court bailiffs and some of the important procedures they should follow.

Warrant of control

If you have a county court judgment for a debt and do not pay as the court has ordered, the creditor can apply to the court for a 'warrant of control'. This warrant authorises a county court bailiff to try to take control of your possessions to encourage you to pay what you owe. The bailiff should give you seven clear days' notice that they are due to visit you. This is often called the 'enforcement notice'. 'Clear days' do not include Sundays, Christmas Day or bank holidays. It is often possible to stop bailiff action. See the later section Apply to suspend the warrant of control .

When the warrant of control is issued, the bailiffs have a right to try to take control of your goods. However, they cannot actually do this until the time limit on the notice of enforcement has run out. In practice, this means that bailiffs may still be able to take control of your goods even if you move them before the time limit has run out. They could try to take control of them at the place you have moved them to once the time limit has passed.

Bailiffs should show you their identification and a copy of the warrant of control if you ask for it.

Bailiffs can usually act on any day of the week, but only between 6am and 9pm (unless your business is open outside those hours).

Court fee

Your creditor has to pay a fee to the court for issuing a warrant of control. This fee will be added to your debt.

How to make payment offers

If you can't pay the bailiff the money owed in full, you can offer to pay by instalments. Make an offer of payment to the bailiff as soon as you can if you receive a notice that they are dealing with your case. If they agree to accept instalments from you, they may not need to visit your home or try to take control of your goods.

When you make an offer to pay by instalments, it is important to make sure the amount you offer is affordable. You can use My Money Steps to complete your budget and work out how much money you have left to pay to the bailiff and any other debts you owe. A debt being collected by a county court bailiff will usually be a non-priority debt. Send a copy of your budget and your payment offer to the bailiff in writing. Try to make the payments even if the bailiff doesn’t accept your offer.

If the bailiff attends your home and takes control of your goods, you may be asked to sign a controlled goods agreement. This means that you can keep your goods as long as you make all of the payments on time. Use your budget to make sure that any payments you agree to are realistic and affordable.

To stop the bailiff action, see the later section Apply to suspend the warrant of control .

Can bailiffs force entry to my premises?

You do not have to let bailiffs into your home. County court bailiffs are only allowed to force their way into your home if all three of the following points apply.

• They have taken control of your goods inside your home.
• If you made a controlled goods agreement (CGA) with the bailiff you have broken the CGA by missing at least one payment.
• They have given you two clear days' notice that they are coming to inspect or take these goods.

If you have not let the bailiffs in before, keep your doors locked. Although bailiffs should not enter through a window, it is a good idea to keep windows closed.

Bailiff entry rights

Bailiffs can only enter your premises by a normal method of entry, such as a door. They should not enter by a window and they are unlikely to be able to use ladders to get over gates and fences.

Virtual Controlled Goods Agreement

A bailiff may ask you to agree to making a ‘virtual’ or non-entry controlled goods agreement (CGA) when they initially contact you by telephone or letter, rather than coming to visit your property to take control of goods.

• You don’t have to agree to making a virtual CGA. If a bailiff visits your home they do not have the right to force entry if they are collecting most types of civil county court or high court judgments.
• There are potentially advantages and disadvantages to agreeing a virtual or non-entry CGA, depending on your circumstances.

If you are considering whether to agree to making a CGA contact us for advice.

Vehicles

A bailiff can take control of goods outside your home, so if you have a vehicle, keep it in a locked garage. If you park the vehicle on your drive, the bailiffs could clamp and possibly remove it.

You could park the vehicle away from your property, but if you park it on a public road and the bailiff finds it, they could clamp and possibly remove it. Contact us for advice.

Changes to bailiff law

This is our understanding of the rules on bailiffs from 6 April 2014 . Some bailiffs may argue that under the new rules, they can go anywhere they like to take control of your goods. They may say that this allows them to come into your home even if they have not been in before and that you should not refuse them entry. If a bailiff says things like this to you, contact us for advice.

What goods can bailiffs take?

County court bailiffs should not take:

• clothing, bedding, furniture and basic household items that are necessary for the basic domestic needs of you and your family;
• tools, books, telephones, computers, vehicles and other items of equipment that you need to use personally in your job, business or education (up to a total value of £1350 ); and
• items you or someone else is physically using where taking the goods straight away is likely to lead to a breach of the peace.

This means that items of equipment that you need to use in your business or education that are worth more than £1350 are not exempt.

Exempt goods

The goods that bailiffs are not allowed to take include the following.

• A cooker or microwave.
• A refrigerator.
• A washing machine.
• A dining table and chairs for you and your household.

This is not a complete list of goods that bailiffs should not take. If you are unsure whether an item is exempt or not, contact us for advice.

Can bailiffs take goods belonging to someone else?

The bailiff should not take goods that belong to other people. If they threaten to do this, explain that the goods do not belong to you. Show a receipt or credit agreement as proof. If the owner hasn't got a receipt, they can provide a sworn statement called a 'statutory declaration' instead. Contact us for advice.

If a bailiff takes goods belonging to a third party, the third party should write to the bailiff to show that they own the goods. The bailiff should pass this information onto the creditor. The creditor should then decide whether to accept or reject the third party’s claim. If the creditor rejects it, the third party can apply to court to get the goods back. However, they will need to pay the court a deposit. The size of the deposit depends on the value of the goods that have been taken. Contact us for advice.

Bailiffs can take goods that are jointly owned by you and your partner, but they are only entitled to your share of the goods.

Can bailiffs take goods on hire purchase or conditional sale?

There are different legal views about whether bailiffs can take control of goods on hire purchase or conditional sale agreements. If a bailiff threatens this, contact us for advice.

What if there are no goods to take?

If the bailiffs come into your home, they may decide that your goods are not worth enough to cover the cost of them coming with a van to remove and sell them. If this is the case, the bailiff may return at a later date to try to take control of your goods. They have 12 months from the date of the enforcement notice to take control of your goods.

If you made a payment arrangement with the bailiff after they sent you the enforcement notice, the 12 month period starts from when you broke the terms of the repayment arrangement.

What if bailiffs cannot gain entry or there are not enough goods for them to take?

Bailiffs may try to visit your premises and take control of your goods more than once. However, if they are unable to do this, or there are not enough goods for them to list, they will usually return your case to the court. The creditor will be told about this and may decide to try other types of enforcement action. Contact us for advice.

What if I have already let the bailiffs into my premises?

If you have already let a county court bailiff into your home or business premises, it is important to bear in mind the following points.

• The bailiff will not usually take away goods on their first visit.
• They may ask you to sign a 'controlled goods agreement'. This allows you to keep using the items listed on the agreement. However, if you break the terms of the controlled goods agreement, the bailiff can return and take the goods by breaking in if necessary. If you don't sign the agreement, the bailiffs may remove the goods straight away. They could also lock up the goods on your premises, but this is less likely. Contact us for advice.

A bailiff may not be able to take goods that are worth more than you actually owe. If they threaten to do this, contact us for advice.

Complaints

If you want to complain about a bailiff, contact us for advice.

What fees can bailiffs charge?

County court bailiffs can charge you the following fees if they start the type of action described.

• £75 for being instructed by the creditor, carrying out initial checks and investigations and receiving payments.
• £235 to cover visiting and entering premises and taking control of your goods.
• £110 to cover removing your goods, valuing them and arranging for them to be sold.
• The cost of storing goods which the bailiff has removed from you.
• The cost of hiring a locksmith, if one is needed.

If your debt is over £1500 or if your goods are sold, further fees can be charged. Contact us for advice.In practice, county court bailiffs use a different set of fees. For example, they are likely to charge reasonable expenses for removing your goods and certain percentage fees for valuing and selling them. There is no definition of what reasonable expenses means. The bailiffs should give you information about how much you owe before and after they visit you. If you are unsure whether they have charged you the correct amount, contact us for advice. If they have charged you too much, you may be able to challenge the fees through the County Court.

When can bailiffs sell goods that they have removed?

After bailiffs have removed goods that they have taken control of, they may sell them at public auction. However, at least seven clear days must have passed before they can do this. In some situations, bailiffs may ask the court for permission to sell the goods privately. Contact us for advice.

What paperwork should bailiffs give me?

Under the law, bailiffs have to leave you paperwork telling you what they intend to do or what they have done. For example, bailiffs should give you a notice telling you:

• when they intend to visit you;
• when they have taken control of your goods; and
• when they intend to re-enter your premises after entering before.

There are strict rules about the information this paperwork must contain. If the bailiffs do not give you the correct paperwork, you can complain or consider taking legal action against them. Contact us for advice.

Apply to suspend the warrant of control

You can stop a bailiff from trying to take control of your possessions by suspending the warrant of control. You will need to apply on form N245 which is available from your local county court hearing centre. The court cannot refuse to accept the application just because the bailiff has not yet visited or managed to get in. However, the bailiff can continue to call round until the court agrees to suspend the warrant.

Parking penalties

You cannot apply to suspend a bailiff’s warrant if they are collecting a parking penalty charge for a local authority. Contact us for advice.

Filling in the N245 application form

You can use My Money Steps to complete your budget. Make sure you include all your income and outgoings from your budget on form N245. If you are a couple, it is usually best to include your total household income and outgoings. Make sure you have included details of all payments you make on your debts. This will make it clear to the court that you can only afford to pay the amount you have offered. Contact us for advice if you have any problems filling in the form.

Court fees

There will 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 Do I have to pay a court fee? at the end of this guide.

What happens next?

Send or take your completed N245 application form to the county court hearing centre that sent the warrant to you. You will have to pay your fee to the court when you give them the application, unless you don't have to pay on the grounds of hardship. Keep a copy of the completed form. The court will send the creditor a copy of your application form.

If your creditor agrees to your application
They will notify the court. The court will then send you details of what has been agreed and how to pay. If the creditor does not agree to the offer of payment on your application. The court will work out how much you should pay from the information you have provided on the form.

If the creditor does not agree to the offer of payment on your application
The court will work out how much you should pay from the information you have provided on the form.

If the creditor objects to the warrant of control being suspended at all
There will be a short hearing for the district judge to decide what to do. You must go along and explain your circumstances in person. Take a copy of your budget with you.

If the court orders you to pay more than you have offered
If you do not agree with the amount the court orders you to pay, you can ask for a hearing to explain your offer to a District Judge. You need to use a general application form called an N244, which is available from your local county court hearing centre and ask for the court to reconsider the offer you have made. The hearing will be sent to your local county court hearing centre. There should not be another fee to pay at this stage.

You must submit your N244 application within 14 days of receiving the order to pay. You should go along to the hearing, taking a copy of your budget with you.

Court forms

You can find most court forms using the court form finder on the HM Courts and Tribunals Service website. You can fill in application forms online and print them off to sign and send to court.

Do I have to pay a court fee?

When you apply for help to pay a court fee, the court will use two tests to decide your application. See our Help with court fees guide for more information.

How can I complain about county court bailiffs?

If you are unhappy with the way bailiffs have acted, write to the delivery manager of the County Court hearing centre they are working for. This will usually be your local County Court hearing centre. Include your name and address, the case number and warrant number and explain what your complaint is about.

The delivery manager should investigate your complaint and tell you in writing about any action they will take. If you are not happy with the delivery manager's response, you can ask for your case to be reviewed. Once you have been through all the stages of the court's complaint procedure, you may be able to take your complaint to the Parliamentary and Health Service Ombudsman. See Useful contacts at the end of this guide.

There are details of the HM Courts and Tribunals Service complaints process on www.gov.uk.Alternatively, you can make a court claim against the bailiff for any loss you have suffered. If you are considering this option, contact us for advice.

What are the 'Taking Control of Goods: National Standards'?

The 'Taking Control of Goods: National Standards' are good practice guidelines that set out general rules on how bailiffs should behave and what procedures they should follow. You can mention these standards in support of your complaint but the standards are not enforceable by law.

We can send you a copy of the 'Taking Control of Goods: National Standards'. Alternatively, you can find them on the HM Courts and Tribunals Service website.

Before bailiff action

If the creditor has not already applied to use bailiffs, you may be able to avoid this by applying to vary the payments on the CCJ. There are different ways to do this, depending on when and how the decision about how much you should pay was made. See our Varying a CCJ guide for more information

Useful contacts

Parliamentary and Health Service Ombudsman Phone: 0345 015 4033www.ombudsman.org.uk

Taking Control – The campaign for bailiff reform www.bailiffreform.org

Other guides that may help you

Help with court fees guide

High Court enforcement guide

Penalty charge notices guide

Varying a CCJ guide

• understand why you might want to ask for information about your credit agreement;
• get a copy of your credit agreement and information about your account for £1; and
• make a request for details of the personal information an organisation holds about you.

The sample letters mentioned in this guide can be filled in on our website.

Understanding credit agreements and why I might want to ask for information

You normally need to sign a credit agreement before borrowing money or getting credit. A credit agreement outlines key information and the terms and conditions under which credit is given to you. Your rights and responsibilities, and those of the creditor, are set out so that both sides can know what to expect. This will include how much interest and charges will be and what can happen if you do not pay the credit back as agreed.

If you are unsure about anything, you should check your credit agreement. This will allow you to confirm that it is accurate and that it reflects what was agreed between you. It can help with any complaints and also help you make decisions about financial planning going forward.

Creditors should give you a copy of your credit agreement. If you have lost it or you are unsure whether the creditor gave you a copy, you can ask for one. You can also ask for other information if you want.

If you are not happy to do that or you need help asking for information, you can appoint someone to act on your behalf. You must give them written permission to do this because of data protection rules. The person could be a friend, family member or an organisation such as Citizens Advice.

Credit agreements can sometimes be difficult to understand. If needed, you can also get advice on what your agreement says, and about any other information received once you have it.

My rights to information

You have rights to ask for personal information from creditors and other organisations because of two laws:

• the Data Protection Act 2018; and
• the Consumer Credit Act 1974.

Understanding the differences between requests under these laws is important. Which you use will depend on:

• whether your debt is covered by only one or both laws;
• what action your creditor has taken so far; and
• the type of information that you need and what you want to get.

The kind of information you get is different under each law

• The Data Protection Act gives you the right to access all personal information held by the organisation about you. They have to send you the information you ask for under the Data Protection Act, even if they have started court action.
• The Consumer Credit Act gives you the right to ask for a copy of your credit agreement and statements of your account. This is only for debts regulated by the Act, such as most credit cards and personal loans. Usually, your agreement will say it is ‘regulated by the Consumer Credit Act’. The Act may not cover all credit union or buy now pay later debts. It does not cover companies that provide gas, electricity, water or phone services, and it does not cover councils.

You must also still owe money on the account and the creditor must not have already taken court action. If a lender does not respond to a request for information under the Consumer Credit Act in 12 working days, they cannot start or continue court action against you to recover the debt until they do so. See the later section: The creditor does not reply to your Consumer Credit Act request under sections 77, 78 and 79.

How much will it cost?

Data protection Act requests

Organisations cannot charge for sending you personal information under the Data Protection Act as long as your request is reasonable. For example, your request may not be reasonable if you are asking them to provide information that they have already recently given to you.

You can make very specific requests or make more general ones. For example, you could ask for a copy of a particular letter or email. Alternatively, you could ask for copies of all the letters and emails that they have sent to you. You could even just ask for a copy of all of the information that they hold about you. Remember, in some cases this may mean that you receive a large amount of information back from them. This might make it harder to find any specific information you are looking for.

Personal information under the Data Protection Act sample letter

Use this sample letter to ask for specific information about you which may be held by a creditor, or a public organisation like your local council. Alternatively, you might want to check what information the creditor holds about you (such as a record of a phone call) and how they may have used this to make decisions about you.

Consumer Credit Act requests

The fee for asking for a copy of your agreement and statement of account under sections 77, 78 and 79 of the Consumer Credit Act is £1. There is no fee if you ask for a statement of your account under section 77b of the Consumer Credit Act.

There are two sample letters which you can use to get different kinds of information.

Information about your agreement under the Consumer Credit Act sample letter

Use this sample letter to ask for a copy of your agreement and related documents, together with a statement of your account from a creditor. You might need to use this letter if you have lost your original agreement and want to check the terms and conditions such as the interest rate, the amount of credit and the total number of payments. You might want a statement of account to check what the creditor thinks you have paid on the account and when. Use sections 77, 78 and 79 of the Consumer Credit Act 1974 to make this request.

Information about instalments still to pay under a credit agreement sample letter

Use this sample letter to ask for a statement of your account which shows what you have to pay in the future, including any missed payments. You can only use this letter if your agreement is for a fixed amount of credit, the debt is not secured on property and you pay it by instalments. Use section 77b of the Consumer Credit Act 1974 to make this request.

What information should I receive?

Data Protection Act request

You should get the information that you have asked for. Make sure that you are clear about the information that you want. If you are not clear, the creditor may send you too much information, which you may find unhelpful. If the information is difficult to understand, the creditor should send you a guide to help you make sense of it. If you asked for details of any decision that the creditor made about you, you should be sent an explanation of how they made that decision.

The Act allows your lender to give you information about payments made by a joint account holder, such as your partner or ex-partner. However, it does not force them to do so. You can ask your lender to provide this information under the  Data Protection Act, but they are within their legal rights to say no.

Consumer Credit Act request under sections 77, 78 and 79

You should be sent a 'true copy' of your agreement that is easy to read and a statement of your account signed by your creditor. The 'true copy' must contain all the terms and conditions from your original agreement, information about any changes made to the agreement and your name and address at the time that you took out the agreement. It does not have to include a signature box, signature or the date of signature from your original agreement.

The statement of account should be signed by the creditor and tell you:

• how much you have paid (if you borrowed a fixed amount);
• how much you still owe; and
• what you still have to pay and when.

The creditor does not reply to your Data Protection Act request

If the organisation does not send you the information that you requested within one month, you could send a reminder by recorded delivery. If you still do not receive a reply, you can report a concern to the Information Commissioner. If the Information Commissioner thinks that the law has been broken, they might tell the company to follow the rules. In serious cases, the Information Commissioner can send the organisation an enforcement notice to force them to send you the information. See the later section Useful contacts.

The creditor does not reply to your Consumer Credit Act request under sections 77, 78 and 79

If the creditor does not send you a copy of your agreement and a statement of account within 12 working days, then they are not allowed to take further action against you to enforce the agreement in the court until they do so.

If there never was any written agreement so the creditor cannot send you a copy, they should tell you. If the creditor has simply lost your agreement, they must provide a 'true copy' with the same details.

In the meantime, the creditor cannot:

• make you pay off your debt before you're supposed to;
• get a court judgment against you; or
• take back anything you’ve hired or bought on credit, or take anything you used as security (like your house) when you took out the agreement.

However, the debt still exists and if you don't arrange to pay they can still:

• add interest and charges in line with your terms and conditions and ask you to pay what you owe;
• send you a letter called a 'default notice' if you miss any payments;
• pass your information on to a credit reference agency (which might affect your credit record);
• pass your information on to a debt collector;
• sell your debt to someone else; or
• take your case to court, although they won't be able to get a court judgment against you unless they give you the information you're entitled to.

You can make sure that the creditor does not go any further with any court judgment by asking the court to stop any action. You should ask for a ‘pause’ until they have met the Consumer Credit Act requirements. Contact us for advice if you want to do this.

Another company has bought the debt

If the original creditor has sold the debt on to another company, the new company becomes the 'creditor' and must deal with your request. If the new company does not agree to do this, they should tell you who can give you the information, or pass your request on to the original creditor themselves.

The Financial Ombudsman Service (FOS)

If you think that the new company has not behaved as they should, you can make a complaint to the FOS. You will have to follow the company's complaints procedure first. You can only complain to the FOS about events that happened from April 2007 onwards. See the later section Useful contacts.

The Financial Conduct Authority (FCA)

The FCA has published detailed advice on how creditors should act in the Consumer Credit sourcebook (CONC). See the later section Useful contacts.

Time limits for recovering debt

The Limitation Act 1980 sets out the rules on how long a creditor has to take certain action against you to recover a debt. Limitation periods for debts are important, because if the creditor has run out of time, you may not have to pay the debt back.

If you write to a creditor, this may restart the limitation period, depending on what you say. If you think a limitation period may apply soon, contact us for advice before writing to your creditor. For more information, see our Statute barred debts guide.

Summary Table

Useful contacts

Financial Conduct Authority (FCA) Regulator for financial services such as banks and credit companies, insurance companies and mortgage lenders. Phone: 0800 111 6768 www.fca.org.uk

Financial Ombudsman Service (FOS) For complaints about banks and other creditors Phone: 0800 023 4567 www.financial-ombudsman.org.uk

The Information Commissioner’s Office Phone: 0303 123 1113 www.ico.org.uk

Other guides that may help you

Complaining about your lender guide

Statute barred debts guide

• understand credit scoring;
• deal with being turned down for credit;
• work out how debts including a county court judgment (CCJ) will affect your credit report; and
• challenge incorrect information on your report from the credit reference agency.

Credit reference agencies

Credit reference agencies hold information about your credit agreements (including any arrears), rent agreements, county court judgments (CCJs) and electoral roll information. A lender or landlord can only pass on information about your agreements with your consent. You usually give this consent when you sign the agreement. Failure to obtain your consent is a breach of the Data Protection Act 2018.

Most county court judgments will automatically be registered and are kept on record for a period of six years. The information a credit reference agency holds about you is known as your credit report (or file).

Limited companies

Limited companies have their own credit report in the same way as an individual. If a director of a company asks to borrow money on behalf of the company, the lender is likely to check the director’s personal credit report as well as the company’s.

Credit scoring 

If you apply for credit, a lender may take into account several factors, such as your age, occupation and whether you are a homeowner (from the information you give them on your credit application). If you are an existing or previous customer, a lender may also look at information they already hold about you in their records. Lenders often use a process known as 'credit scoring' to assess this information together with the information shown on your credit report.

For credit scoring, a lender may give points to certain pieces of information and then add them up to give you a credit score. If you do not score above a particular lender's pass level, your application for credit may be turned down. Each lender has their own policy guidelines that they follow whenmaking lending decisions.

Ask the lender if they are using a credit score to decide whether to give you credit. If the company uses a computerised system you should be given broad information about how credit scoring works and the type of things they have taken into account in the scoring system for that company. If you are turned down they should tell you if you didn't pass. They should also tell you if you were turned down for any other reason, for example, because of the information held on your credit report.

If the decision was made solely using a computerised scoring system you can ask the lender to look at your application again. This review should be done manually and not using an automated system. You may have to supply extra information to support your application.

Every time you apply for credit, a 'search' by the lender is marked on your credit report. Searches stay on your file for different times depending upon which credit reference agency was used. Experian and Equifax hold search entries for 12 months and TransUnion for up to 24 months.

Guarantors

When you guarantee a credit agreement, this means that if the person whose name the agreement is in does not pay, the creditor can ask you to pay instead or to compensate them for their losses.

The term 'guarantor' is used to describe someone who has signed a guarantee that they will pay if the person that borrowed the money does not.

Credit reference agencies would not normally record a credit agreement on a guarantor’s credit report if payments are up to date. If payments are missed, any default or county court judgment could be recorded on the guarantor’s credit report.

Personal guarantees

If you are a director of a limited company, you may have given a personal guarantee for a business debt such as a business loan. In some cases if the company does not pay, your personal credit report could be affected. Contact us for advice.

Been refused credit?

If you have been refused credit, you should ask the lender which credit reference agency was used and whether the credit reference agency's information was the reason for the decision. If it was, you may want to check what information is included in your credit report.

You can contact the credit reference agency and ask for a  free copy of your credit report under the Data Protection Act 2018.

• The agency will need your full name, current address, date of birth and any previous addresses that you have lived at for the past six years.
• You can choose to look at your report online or have your report sent to you in the post.
• If you want a copy sent in the post, you will need to fill in a form on the agency’s website.
• Your report should be sent to you within seven working days unless the agency needs you to send proof of your identity and address, for example, if you have moved home recently.

You can also subscribe for free online credit reports and credit scores at ClearScore, Credit Karma and the Money Saving Expert Credit Club. They are updated monthly. Once you have registered, you can check your credit file as often as you want.

There are three main credit reference agencies – Experian, Equifax and TransUnion. You should check the information held with all of these agencies. This is because the details held by individual agencies may differ. See Useful contacts at the end of this guide.

If any information on your credit reference file is incorrect, you have a right to ask the agency to remove or correct the information.

Can I appeal a lender refusing me credit?

Unfortunately, there is no automatic right to credit. Some companies may provide details as to why you have been turned down, which can help you establish the reasons.

If credit scoring was used then the company should give you broad reasons for refusing you credit.

Also you may be able to ask for a manual decision if the initial decision was made by computer. See the earlier section on Credit scoring. However, you are still only legally entitled to receive the name of the specific credit reference agency the lender consulted.

You can always contact the company again if information on your credit report has changed and ask them to look at your application again. Otherwise it may be a case of shopping around for credit, making sure you are very careful to check the interest rates and terms of any loan you are offered.

How long is information kept on my credit report?

The credit reference agency will leave most information on your report for at least six years. Information held by agencies includes the following.

Missed payments (arrears)

If you do not make a payment on time or pay less than your credit agreement says you should, your lender may report this to one or more of the credit reference agencies. The credit reference agency will update your credit report to show that your account is in arrears. This information stays on your credit report for six years.

Arrears can continue to be recorded on your credit report even if your lender has temporarily agreed that you can pay less than your credit agreement says you should. Although, your lender can tell the credit reference agency to add a marker to your report to show that there is an agreed payment arrangement in place.

If you are in arrears for several months, your lender may take further action and tell one or more of the credit reference agencies that your account is in 'default'. Usually, this will not happen if you:

• have agreed a temporary payment arrangement with your lender; and
• are maintaining the payments under that arrangement.

For more information, see Defaults.

Defaults

A default can be added to your credit report to show that you have broken the terms and conditions of your agreement. A default is usually reported by a lender because:

• you have missed payments under your credit agreement; and
• your lender has decided to close your account.

Although it will depend on the terms and conditions of your credit agreement, a default usually happens after you have missed between three and six months' payments.

A default may be recorded on your credit report for other reasons, for example where:

• your supplier has taken steps to cut off a service;
• your account has been included in a form of insolvency, such as bankruptcy or an individual voluntary arrangement (IVA); or
• you have been sued for the amount in court.

Credit accounts in default will stay on your credit report for six years from the date of default.

A default reported on your credit report is not the same as a default notice issued under the Consumer Credit Act 1974.

Settled accounts

These are deleted six years from the date the account is settled or when the last payment is made unless a 'default' was registered.

County court judgments (CCJs)

County court judgments are deleted six years from the date the judgment was made, whether or not they have been paid.

High court judgments (HCJs)

High court judgments are deleted six years from the date the judgment was made, whether or not they have been paid.

Administration orders

Administration orders are deleted six years from the date the order was made.

Bankruptcy orders

Bankruptcy orders are normally deleted six years from the date of the bankruptcy order, unless you are subject to a bankruptcy restriction order (BRO) or undertaking (BRU) which lasts longer than six years. In this case the bankruptcy order will be removed once the BRO/BRU ends. Your credit report details can be changed to show the date your bankruptcy order ended. You will need to send proof of your discharge to each credit reference agency. Contact us for advice. If you have not been discharged from your bankruptcy, the bankruptcy order will remain on your credit report until it has been discharged, even if this is longer than six years.

Debt relief orders

Debt relief orders (DROs) are recorded on your credit report and normally deleted after six years. This can be extended if you are subject to a debt relief restrictions order (DRRO) or undertaking (DRRU).  In this case, the DRO will be removed once the DRRO or DRRU ends.

Individual voluntary arrangements (IVAs)

IVAs are normally deleted after six years from the date the IVA was set up. If the IVA lasts longer than six years it will remain on your credit report until the date the IVA ends. You can ask for your credit report details to be changed to show the date the IVA was completed.

Student loans

Old 'mortgage style' student loans details are passed onto credit reference agencies. This can happen even if you have deferred the loan or made an arrangement to pay the loan back.

Child maintenance

Details of liability orders obtained for not paying child maintenance can be recorded on your credit report and are deleted after six years.

Council tax

Details of council tax debts are not kept by credit reference agencies. This may change in the future.

Mortgage debts and secured loans

You may be in arrears with your payments but have made an arrangement to pay or have had a possession order suspended by the court. In these cases the details may not show up as a 'default' on your credit report as long as you keep up with the payments.

Otherwise a 'default' may be registered by your lender.

Details will stay on the credit reference agency's files for six years from the date the 'default' was registered which could be the date of a repossession order or when you handed the keys in to your lender. In some cases, details of how much you still owe will also appear on the file. This may affect your ability to get a new mortgage, especially if you still owe money to your previous lender.

Since July 2010, UK Finance no longer keeps information on people who have been repossessed or handed the keys in on their home. This information used to be kept in a mortgage possessions register and passed on to credit reference agencies. Existing information will stay on credit reference agency files.

Information on your mortgage or secured loan may still show up on your report. You can check your file in the usual way.

Your file should be marked as 'satisfied' if you pay the mortgage arrears off or if the sale of your house covers the outstanding debt.  If you clear any mortgage shortfall, your file should also be marked as 'satisfied'.

Notice of correction

You can ask the credit reference agency to put a notice on your report of up to 200 words explaining why you got into debt or why you think information on your report is misleading. You may want to explain your financial circumstances at the time and why your situation is now different. This notice will then be seen by anyone reading your report such as a lender making a search of your credit report when you apply for credit.

Most credit decisions are made by automatic means (for instance, computer). If there is a notice of correction on your report, your application must be referred for a manual decision (for example, a person will decide whether or not you can get credit).

Other people’s details

Credit reference agencies should not include information about other people who happen to live with you in your credit report, even if you share a surname, unless a ‘financial connection’ has been created. This means other people's credit details should not affect your credit rating.

Your credit report should only include:

• financial information about you;
• the name of anyone you have a financial connection with at your address (but not any financial information about that person); and
• the date and source of the financial connection.

This means that your financial details no longer appear on anyone else's credit report unless you have a financial connection. Your report will continue to show you who has accessed your details and when this happened.

You will be treated as having a financial connection to someone else where a lender tells the credit reference agency:

• you have made an application for credit in joint names;
• a bank account or other credit product has been opened in joint names; or
• you tell the credit reference agency that you are financially linked to someone else.

This will continue until you file a notice of disassociation to end the financial connection between you.

Linked addresses

Credit reports will also include a 'linked addresses' section with details of any previous addresses that you provide when applying for a copy of your report and other addresses you have been connected to.

Notice of disassociation

There may be information on your report about people who you have no financial connection with, or no longer share a financial connection with you (for example, an ex-partner). You can write to the credit reference agencies to 'disassociate' yourself from them explaining your reasons. You will need to fill in a form giving details about the people you want removed from your report. If any agency refuses to accept your notice you can ask the Information Commission for help. The address is in the Useful contacts at the end of this guide.

Complaints

You have the right to complain to the Financial Ombudsman Service about how a credit reference agency has dealt with your credit file. You will have to follow the agency's complaints procedure first. Contact details for the Financial Ombudsman Service are in Useful contacts at the end of this guide.

You can also complain to the Information Commissioner’s Office under the Data Protection Act 2018. They can look at issues such as why a lender or credit reference agency has not corrected information on your file, or where a credit reference agency has refused to add a notice of correction. The contact details for the Information Commissioner’s Office are in Useful contacts at the end of this guide.

Register of Judgments, Orders and Fines

Almost all county court and high court judgments are recorded on the Register of Judgments, Orders and Fines and kept on the register for six years.

Some magistrates' court fines are added to the register in specific circumstances where you have not paid the fine. These will stay on the register for five years.

Penalty Charge Notices that are enforced through the County Court are not recorded on your credit report, or on the Register of Judgments, Orders and Fines.

Trust Online holds the Register of Judgments, Orders and Fines. If you are unsure whether you have any county court or high court judgments or whether the judgments are on the register, you can make a search against your name and address. You can do this online or by filling in a form and sending it to Trust Online. You will need to give Trust Online your correct name and address details and pay a fee. The contact details for Trust Online  are in Useful contacts at the end of this guide.

Trust Online divides the register into several sections. Sections one and two cover England and Wales.

• Section 1 : England and Wales – county court judgments.
• Section 2 : England and Wales – high court judgments, administration orders, magistrates' court fine defaults and Child Support Agency liability orders.

Sections three to seven deal with other regions, including Scotland, Republic of Ireland, Isle of Man, Jersey and Northern Ireland.

There is a scale of fees to pay for each search you make for your name and address.

• To search one section, the fee is £6.
• To search two sections, the fee is £8.
• To search three sections or more, the fee is £10.

If you need to search for more than one name or address, you can add further details to the search. You will need to pay a further fee for each additional search. The cost for each additional search is the standard fee less 10%.

Because of the search fees, it is usually cheaper to contact a credit reference agency and check your credit report instead. Although, be aware that when you update a credit reference agency with your current address details, your existing creditors will usually also be able to see this information

Paying off a CCJ

If your judgment has been fully paid, you will need to provide evidence to the court that the full balance, including costs, has been paid (usually this would be a receipt from the organisation that took you to court). Once you have paid the judgment, the court will then notify Registry Trust who will automatically mark your entry on the register as ‘satisfied’.  This will then be passed on to the credit reference agencies.

If you need proof that you have paid a judgment, you can ask the court in which the judgment was made to provide you with a 'certificate of satisfaction'. There is a small fee payable for this.

How long will my judgment stay on the register?

The judgment will still stay on the register for six years from the date of the judgment.  If in the meantime you have satisfied (fully paid) the judgment, this will also be shown on the register.

The entry will only be removed if:

• you pay off the debt within one month of your county court judgment being entered on the register; or
• the judgment is 'set aside' by the court. This is only possible in very limited circumstances such as if you did not know about the judgment because you did not receive the court papers and you have a valid defence to the claim. For more information, see our Setting aside a CCJ guide.

Fraud and identity theft

If you feel you have been a victim of fraud it is important to act quickly to prevent further fraudulent transactions.

• Report the loss or theft of any documents, cheques, plastic card and online fraud to the card issuer or lender immediately. The card issuer or lender should investigate any fraud for you and freeze the account.
• Report fraudulent activity to Action Fraud. See Useful contacts at the end of this guide. This ensures proper crime reporting procedures are followed. Action Fraud will issue a crime reference number and pass your details to the National Fraud Intelligence Bureau (NFIB). The NFIB will assess whether there is enough evidence to send details to the police or Trading Standards to investigate.
• Contact one of the credit reference agencies to notify them of any items on your credit report you believe to be the result of fraudulent activity. The agency you contact should inform the other agencies for you.
• The credit reference agencies should then cooperate and send you copies of your credit reports, advice on protecting yourself from identity theft and tell you who is managing your case and how to contact them.
• The agencies will need to contact the lenders if fraudulent applications for credit have been made in your name.
• Consider registering your details with CIFAS, the UK's Fraud Prevention Service. For a fee, a fraud warning can be placed against your address and will be flagged up if applications are made using your address. The CIFAS marker will mean additional checks are made to ensure any application for credit is genuine. This may result in delays in your credit applications. You can download the online application at www.cifas.org.uk.
• For general advice on identity theft, check the government website www.actionfraud.police.uk.
• Also see our Dealing with fraud guide.

Credit repair companies

You may hear of companies that offer to clear your credit records with credit reference agencies to allow you to apply for more credit. 

Credit repair companies may charge you a fee and often send you an information pack telling you how to get a copy of your credit report and how to clear county court judgments. You need to be very careful before paying a fee to a commercial company who says it can remove judgments for you. If you apply to the County Court to set aside a judgment and you do not have a good reason to do so, you could be charged costs by the court.

Credit repair companies must be authorised by the Financial Conduct Authority (FCA). Check if the company is authorised with the FCA before using their services.

If you have a complaint about something a credit repair company has done from October 2008 onwards, you can ask the Financial Ombudsman Service for help.

If you are not happy with a credit repair company complain to the local trading standards department by contacting Citizens Advice consumer helpline.

Useful contacts

Action Fraud Phone: 0300 123 2040 www.actionfraud.police.uk

Citizens Advice consumer helpline Phone: 0808 223 1133 www.citizensadvice.org.uk.   
(self help from Citizens Advice and help contacting Trading Standards).

ClearScore Phone: 0207 582 8212 www.clearscore.com  

Credit Karma www.creditkarma.co.uk

Equifax Plc Customer Service Centre PO Box 10036, Leicester, LE3 4FS Phone: 0800 014 2955 www.equifax.co.uk  

Experian Ltd Consumer Help Service PO Box 9000, Nottingham, NG80 7WF Phone: 0800 013 8888 www.experian.co.uk 

Financial Conduct Authority Phone: 0800 111 6768 Email: consumer.queries@fca.org.uk www.fca.org.uk

Financial Ombudsman Service Phone: 0800 023 4567 or 0300 123 9123 www.financial-ombudsman.org.uk

Money Saving Expert Credit Club www.moneysavingexpert.com/creditclub 

The Information Commissioner’s Office Phone: 0303 123 1113 www.ico.org.uk

TransUnion TransUnion Consumer Services Team PO Box 491, Leeds, LS3 1WZ Phone: 0330 024 7574 www.transunion.co.uk

Trust Online Phone: 020 7380 0133 Email: info@trustonline.org.uk www.trustonline.org.uk

Other guides that may help you

Dealing with fraud guide

Mortgage shortfalls guide

Setting aside a CCJ guide

• understand about fraud;
• find out how you can help protect yourself from fraud; and
• learn what to do if you become a victim of fraud.

What is fraud?

Fraud occurs when someone tricks you so that they can benefit financially or in another way. These people are commonly known as fraudsters. There are lots of different types of fraud (also known as 'scams') and some can appear quite realistic.

It is important to be aware of the possible types of fraud so that you can spot them and try to protect yourself in the future. Fraud can happen by phone, text, email, website or face to face. Crime, including fraud, carried out using the internet, computers and laptops is known as cyber crime. It is important to protect yourself in the ‘real world’ and ‘online’. See the section Preventing fraud for more information.

Action Fraud, the UK's national reporting centre for fraud, has an alphabetical list of different types of fraud. This guide also includes some examples.

Identity theft

Identity theft happens when fraudsters get access to your personal details, such as your name, address and date of birth. Your personal details are valuable to fraudsters because they can use them to try and take out credit, such as a bank loan, or to buy goods in your name. Identity theft can lead to identity fraud. See the section headed Identity fraud for more details.

There are several ways that fraudsters try to get your personal details. They could look at information you have placed on social network sites, such as Twitter or Facebook. They could look through rubbish you have thrown away for old bank statements and utility bills. Some fraudsters will try to trick you into giving them your personal details by sending you a 'phishing' email. See the section headed Phishing emails  for more details.  

Phishing emails

Phishing emails are fake emails that look as if they have been sent from a trusted organisation, such as your bank, when they have not. They may say that you need to confirm your security details and ask you to click on a link and type in your details. Some of these fake emails also contain harmful software (also known as 'malware') that tries to get passwords and personal information from your computer. This is a kind of identity theft.

Identity fraud

This is when your personal details such as name, address and date of birth are used without your knowledge to commit fraud. For example, they can be used to:

• take out credit in your name, such as a loan or credit card;
• take money from your bank account;
• apply for benefits in your name;
• buy goods in your name; or
• obtain documents, such as a driving licence or passport, in your name.

Identity fraud can affect your ability to get credit, such as loans and mortgages.

Bailiff scams

Bailiff scams are where fraudsters pretend to be bailiffs or a bailiff firm. They contact you to say they are collecting a debt that you owe. In this type of scam, the fraudsters might contact you by email, letter, telephone or in person. The fraudsters may pretend to be working for an existing bailiff firm or create a fictional bailiff firm. You could lose money if you pay the fraudsters and any personal information you give could be used for other types of fraud.

Investment scams

This is where fraudsters offer investments in goods and schemes that do not exist. You may be contacted out of the blue and told about opportunities to invest in special schemes that, for example, buy shares or precious metals and gems. Fraudsters can sound very knowledgeable and try to put pressure on you to make a quick decision. You could lose money if you pay the fraudsters and give away personal information that could be used for other types of fraud.

Loan scams

Loan scams are where fraudsters offer you a loan that does not exist. They approve your application, often very quickly, and then ask for an up-front fee. They may even explain that the fee is to cover insurance, or other costs. If you pay a fee to a loan scam, you will not receive the loan. You will lose money and any personal information you have given could also be used for other types of fraud.

Pension scams

A pension scam will try to get you to transfer the money in your pension to the fraudster. Fraudsters may contact you offering a free pension review and say that they can use a 'loop hole' to help you release your pension before age 55. They may also offer you a special 'one-off' investment opportunity to increase your pension if you transfer your funds quickly. You could lose your pension and in some cases also be left with a tax bill.

Prize draw or lottery scams

This is where fraudsters tell you that you have won a fake prize. Sometimes they even pretend to be from a well-known organisation. They may ask you to pay an up-front fee to release your prize, ring a premium rate telephone number, or give your bank account details and personal information. You could lose money if you pay the fee or ring the expensive phone number. Your personal information could also be used for other types of fraud.

Refund of council tax schemes

This is where someone contacts you out of the blue to say that you have been placed in the wrong council tax band. For a fee, they say that they can help you get a refund, and may even tell you how much you are owed. Some fraudsters pretend to be from your local council or even HM Revenue and Customs (HMRC). You could lose money if you pay the fee and give away personal information that could be used for other types of fraud.

HMRC does not deal with council tax issues.

Preventing fraud

There are things that you can do to help protect yourself from fraud.

• Before you give anyone your personal information, such as your name, address and bank details, check who they are.
• If someone calls you and you are unsure whether they are genuine, hang up. Find their number from a statement or letter they have sent you or from the phone book. Call them back using that number. Make sure that you wait at least 10 minutes before you call them back, or if possible use another phone. This is because some fraudsters do not hang up when you do and try to block your phone line. It means you could still be speaking to them even when you think you are calling someone else, such as your bank or internet provider.
• Be careful of emails asking you to click on a link to confirm your personal information or bank details. Banks, HMRC and the police do not send emails asking you to do this.
• Think about what information you include on a social networking site, such as Twitter or Facebook. Don't add your full name, date of birth or address to your accounts. Don't share anything that you use as a password, such as your pet's name.
• Make sure your letter box is secure, and if you move house redirect your post with Royal Mail.
• Destroy and, where possible, shred any post showing your name and address, as well as any receipts showing your credit card details.
• Report missing or stolen documents to whoever issued them to you. If they are used by fraudsters there will be a record of what has happened.
• Use up to date anti-virus software and a firewall on your computer. These will help to prevent harmful programmes from taking information from your computer.
• Don't be tempted to download programmes, such as games, from sites that are not trusted. They may contain 'malware'.

• Take care when using public Wi-Fi. Wi-Fi allows you to connect to the internet. Many pubs, cafes and train companies offer free Wi-Fi to their customers. Do not access sensitive sites like your bank account when using this kind of Wi-Fi.
• Sign up to Verified by Visa or MasterCard SecureCode if you are asked to when shopping online. Once you are registered, companies that use this service will carry out extra security checks when you shop online.
• Check your credit reference file regularly for any entries that you do not recognise. See the section Checking your credit reference file for more information.
• Make sure if you receive a bill or a receipt for something you have not ordered that you investigate further.
• If you are asked to invest in a scheme, look at ScamSmart. This is a tool set up by the Financial Conduct Authority (FCA). It gives details about the risks linked to some investments and has a warning list of firms to avoid. See Useful contacts at the end of this guide.
• If you are looking for a loan, it is important to check that the organisation you are dealing with is authorised by the FCA.  See Useful contacts at the end of this guide.
• If you are contacted out of the blue about your pension, do not give any personal information or agree to anything. Get free trusted advice first. MoneyHelper is a free, impartial, government-backed service that has lots of information about pensions, including How to spot a pension scam. They also provide a service called Pension Wise. If you are aged over 50 and have a UK-based defined contribution pension, Pension Wise can give you up to an hour's specialist guidance about your options. See Useful contacts at the end of this guide.
• Consider registering with Action Fraud Alert. This is free and sends you alerts about fraud and scams that may affect you. See Useful contacts at the end of this guide.

Checking your credit reference file

Credit reference agencies hold information about credit agreements in your name, such as loans and credit cards, as well as details of organisations that have recently 'searched' your file. A 'search' is usually done by lenders when you (or someone pretending to be you) apply for credit.

There are three main credit reference agencies, Equifax, Experian and TransUnion. Get a copy of your credit reference file from all three agencies. You can ask for a copy under the Data Protection Act 2018 for  free.  See Useful contacts at the end of this guide.  

Check the credit agreements and searches that are listed on your credit reference files. If you find an entry that you do not recognise then contact one of the credit reference agencies. They should contact the other two agencies to explain what has happened.

The credit reference agencies will need to contact the relevant creditor for permission to remove any fraudulent entries on your credit reference file. If you have any problems getting this information removed, contact us for advice.

If there is an entry that you do not recognise, see the section What to do if you have been a victim of fraud.

What to do if you have been a victim of fraud

Unfortunately, most people are only aware that they have been a victim of fraud when the money or goods have already been lost. However, this is not always the case. If you have recently spoken to someone, or responded to an email or text and think you have been scammed, there may still be time to stop any payments being made. Contact your bank or the relevant organisation immediately and explain what has happened. They may be able to put a stop on your accounts.

Contact your bank or creditor

If someone has taken out credit in your name, or taken money from your bank account without your permission, contact your bank or the creditor straight away. Explain what has happened, give them the crime reference number (if you have one) and ask them to investigate the matter. Any collection of the fraudulent debt should be put on hold while the matter is looked at.

You are not usually liable for money taken out in your name through identity fraud.

If money has been taken from your bank account or credit card without your permission then you will usually be entitled to a refund of any unauthorised payments. Tell the bank immediately because you may have to pay up to £35 of any unauthorised payments taken before you notify the bank. You are not liable for any unauthorised payments taken after you tell the bank that your card has been stolen or that someone else has got hold of your security details.

If you have been tricked into making a payment and have given your card details to a fraudster, then you might not get your money back. Contact us for advice.

Authorised push payment scam

If you have been tricked into making a bank transfer (by electronic payment) from your account to a fraudster, different rules apply. This type of fraud is often called an 'authorised push payment scam'.

Under new rules, your bank will usually have to give you a refund if you made this type of payment on or after 7 October 2024, and the payment was sent from a bank in the UK to another bank in the UK.

• If you have been a victim of an authorised push payment scam and made the payment on or after 7 October 2024, contact your bank. Tell them what has happened and ask for a refund.
• You can ask for a refund under the FPS Reimbursement Rules if the payment was made using the Faster Payments system, or under the CHAPS Reimbursement Rules if the payment was made using the CHAPS system. If you are unsure of how the payment was made, just ask the bank for a refund because you have experienced authorised push payment fraud. Your bank will check how the payment was made.
• Your bank will ask you for information about the payment so they can consider your claim. It is important to provide information to the bank if their request is reasonable.
• Your bank can deduct £100 from the refund they give you unless you are considered as vulnerable under the rules. You may be considered as vulnerable if you were experiencing a vulnerability that affected your ability to protect yourself from the scam. Some banks have also said that they will not apply the £100 excess to any of their customers. Ask your bank what their policy is.
• The rules also set a maximum amount that your bank has to pay you. This is currently £85,000. Contact us for extra advice if your payment was for more than £85,000.
• Your bank should provide you with the refund within five business days of you making the claim. Although, this time limit can be extended if the bank needs more information to assess your claim. This could happen if you delay responding to a reasonable request for information from your bank.

The new rules do not apply if:

• the payment was made by an internal transfer within the same bank or banking group; or
• the payment was made before 7 October 2024.

In these situations, you will need different advice. Contact us so we can explain what to do next and how to ask your bank for a refund.

Contact Action Fraud

Contact Action Fraud to report the fraud. See Useful contacts at the end of this guide.

Action Fraud does not investigate the fraud, but they will:

• record what has happened;
• issue a crime reference number; and
• ask whether you want your details passed to Victim Support, a charity helping people affected by crime.  

After you have reported the fraud, Action Fraud will pass details to the National Fraud Intelligence Bureau (NFIB). The NFIB will assess whether there is enough evidence to send it to the police or Trading Standards to investigate. You will then get an update on your report within 28 days.   

Not every report results in an investigation, but every report helps to build a clear picture. This helps to make the UK a more difficult place for fraudsters to operate in and helps to keep other potential victims safe.

If you report fraud to Action Fraud, you may also be contacted by the Action Fraud National Economic Crime Victim Care Unit (AF-NECVCU). The AF-NECVCU can offer advice and support as well as signposting in order to help protect you from fraud in the future.

Cifas

If you have been a victim of fraud consider contacting Cifas and signing up for their Protective Registration.

Cifas is a not-for-profit organisation and, if you sign up to their service, they will place a warning flag against your details. This tells any creditor using their information to carry out extra checks when your details are used to apply for credit or goods. For a small fee, Protective Registration aims to reduce the risk of further identity fraud. See Useful contacts at the end of this guide.

If you have already experienced fraud you are still at risk from other attempts. This is because as well as trying to commit fraud, some fraudsters also make money by selling your details to others.

Using Cifas does not affect your credit score but, due to the extra checks, it can make your credit applications take a little longer.

Complaints

If you have been a victim of fraud and are unhappy with how a bank, creditor or credit reference agency has dealt with the matter then you can make a complaint.

You will need to complain to the organisation you are unhappy with first. Do this in writing and keep a copy of your letter. If you do not get a reply after eight weeks, or you are unhappy with the response, you can complain to the Financial Ombudsman Service (FOS). The FOS can look into your complaint independently. See Useful contacts at the end of this guide.

If your complaint is about the information held on your credit reference file, you can also refer the matter to the Information Commissioner's Office under the Data Protection Act 2018. They can look at why a lender or credit reference agency has not corrected information on your file. See Useful contacts at the end of this guide.

Useful contacts

Action Fraud Phone: 0300 123 2040 www.actionfraud.police.uk

Cifas Phone: 0330 460 9601 www.cifas.org.uk

Equifax Phone: 0800 014 2955 www.equifax.co.uk

Experian Phone: 0800 013 8888 www.experian.co.uk

Financial Conduct Authority Phone: 0800 111 6768 www.fca.org.uk/consumer or https://register.fca.org.uk/s/ to search the register

Financial Ombudsman Service Phone: 0800 023 4567 or 0300 123 9123 www.financial-ombudsman.org.uk

Get Safe Online For free information about being safe online. www.getsafeonline.org

MoneyHelper Phone: 0800 111 3797 for help with pensions www.moneyhelper.org.uk

Pension Wise Phone: 0800 138 3944 to book an appointment (or book online) www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

TransUnion (previously Callcredit) Phone: 0330 024 7574 www.transunion.co.uk

Other guides that may help you

Credit reference agencies guide

• consider how debt and mental health can impact on each other;
• decide whether to let your creditors know that you are experiencing mental health issues;
• understand that a range of options may be available for dealing with your debts; and
• understand when the Debt and Mental Health Evidence Form (DMHEF) can be used to tell your creditors how your mental health is affecting the way you manage your money and debts.

Links between debt and mental health

Around one in four adults in the UK experience a mental health issue in any given year. Mental health issues cover a range of experiences, including anxiety and depression, schizophrenia, phobias, as well as many other conditions. Mental health issues can be for short periods of time or last much longer. Experiences of mental health conditions can also change over time, and sometimes even from day to day. Mental health issues, like physical illnesses, vary greatly from person to person.

Experiencing a mental health issue does not automatically mean that you are unable to manage your money or deal with your debts, but it can make it more difficult. Research shows that 50% of adults who are struggling with debt, also have a mental health issue. Being in debt can be stressful and this guide gives you information on how you can deal with your creditors.

Get advice

It is better to get advice on dealing with your debts as soon as possible, but it is never too late to contact us. Often there are several options available to you for dealing with your debts.

Sometimes people feel nervous or embarrassed about discussing their debts or their health situation. We offer free, unbiased advice. We do not judge and we will treat any information you give us confidentially. We will not share your details with any other organisation, unless you ask us to do so and we agree to this. You can choose to:

• contact us by phone or webchat (you can remain anonymous if you want to);
• use our online advice tools;
• give your contact details so that we can send you tailored information, such as guides and sample letters to use;
• give us permission to speak to a friend or relative about your options (we will not speak to anyone without your permission);
• remain anonymous and use the information on our website; and
• end a discussion if you need to at any time.

It is always your choice whether to share information about your mental health condition with us. If you do, it will help us to tailor the conversation and our advice to suit your circumstances. We will always ask your permission before we add any information you tell us to your client record.

• We can discuss asking your creditors to hold action. This lets you ask your creditors not to contact you for 30 days so that you can get debt advice. If you need more time than that, you can also ask for an extension. Contact us for advice.
• We can discuss how we can best provide you with the information you need. 
• If you are struggling to take in a lot of information, the adviser might suggest breaking down the advice you need over several conversations.  We will deal with the most urgent things first.

Usually, our advisers will talk you though your options and advise how you can deal with your debts. However, sometimes it might be better for a casework adviser to deal with your debts for you. If this is the case, we will do our best to put you in contact with an organisation that can help.

Consider telling your creditors about your mental health issue

If you are finding it difficult to deal with your debts, then you may want to tell your creditors that you are experiencing mental health issues. It is your choice, but it may help with your negotiations.

Creditors have to comply with the law. In some cases, people with mental health conditions will be offered protection by the Equality Act 2010 which says that your creditors must make reasonable adjustments to help you. Most creditors will also have rules and guidelines to follow when dealing with clients who need extra support.

If they are aware of your circumstances a creditor may:

• agree to put collection activity on hold for a short period;
• agree to contact you at set times only;
• agree to contact you in certain ways, such as by letter rather than phone;
• allow you extra time to gather information; 
• agree not to pass your debt to a debt collection agency; and
• use specialist staff to deal with your case. 

Providing evidence of your mental-health situation

Creditors do not always need extra evidence to decide how they should deal with your case. You may be able to agree a plan of action by simply discussing your situation over the phone or in writing with your creditor. However, in some circumstances this may not be possible, and you or your creditor may want to use medical evidence to help decide what to do next.

If this is the case, ask your creditors what type of evidence they will accept. Your creditors may agree to use a copy of your latest prescription or a letter confirming a hospital or health-care appointment as evidence of your situation. If your creditors will not accept evidence that you already have available, you can consider using the Debt and Mental Health Evidence Form (DMHEF). See the Debt and Mental Health Evidence Form (DMHEF) section later in this guide.

Help from relatives and friends

You may want a third party, such as a relative or friend, to deal with your creditors. By law, your creditors will need your permission to discuss your details with the person you have chosen. Ask each creditor how you can give your permission. Some creditors may agree to take your consent over the phone, but others may want it in writing. Some creditors will have their own form for you to complete.

Codes of practice

The rules and guidance that creditors should follow will depend on the type of debts you have. Here are some examples.

• Most types of personal debt, such as credit cards and loans, are regulated by the Financial Conduct Authority (FCA). The FCA monitors financial organisations and sets out rules and guidance on how they should treat their customers. The FCA's Consumer Credit sourcebook (CONC) says that a lender must have clear policies in place for customers who are in arrears and particularly vulnerable. This includes customers who have 'mental health difficulties'.
• If you owe money to the council, such as council tax, you can ask the council whether they have a 'vulnerability policy'. It may show you who the council consider as 'vulnerable' and how they should deal with your case.
• The Taking Control of Goods: National Standards gives guidance on good practice for bailiffs (also known as enforcement agents), including those used by a council. Where a debtor is vulnerable, a creditor must consider whether it is appropriate to refer a case to bailiffs. Creditors and bailiffs should also show an appropriate use of discretion and assess each situation on a case by case basis. If you are concerned about bailiff action, contact us for advice.
• You may owe HM Revenue and Customs (HMRC) a debt, such as income tax or tax credits. HMRC's internal guidance says that they should make reasonable adjustments for a person with mental health issues which have a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities.

There may be other codes that can be used when dealing with your creditors, contact us for advice.

Options for dealing with your debts

It is important to select the option that is best for you. When you contact us for advice we will ask you questions about your debts and your assets. We will also ask you about your income and outgoings so that we can help you produce a budget. This will show what money is available for your creditors and what options are available to you.

Options can range from informal debt routes, such as negotiating reduced payments with your creditors, to the more formal insolvency options such as bankruptcy, and there are many options in between. Our advisers and online tools will explain the advantages and disadvantages of the options available to you. For an overview of the various options for dealing with your debts, see our Ways to clear your debt guide. We also have more detailed guides covering particular debt options.

Mental health crisis breathing space

Mental health crisis breathing space can give you extra protection from your creditors if you are getting mental health crisis treatment and struggling with your debts. This means that while breathing space is in place, your creditors:

• cannot contact you to ask for payment towards a debt that is included in your breathing space;
• cannot add interest or charges to a debt that is included in your breathing space; and
• must stop most enforcement action (such as court action or the use of bailiffs) for a debt that is included in your breathing space.

If you feel that you would benefit from a mental health crisis breathing space, contact the Money and Pensions Service for more detail.

Also see our Breathing space guide for an overview of what breathing space offers.

Mental health and debt write off

If your circumstances are unlikely to improve then you can ask your creditors to write off the debt. Write off is usually seen as a last resort, where there are no assets or money to pay the debt. Creditors do not have to agree to this, but you can use our Write off the debt sample letter to ask them to consider this option.

When asking a creditor to write off your debt, you can also refer them to the Good Practice Awareness Guidelines for helping consumers with mental health conditions and debt produced by the Money Advice Liaison Group (MALG). These are guidelines only, but suggest that creditors consider writing off unsecured debts when mental health conditions are long-term and there is little chance of the debt being repaid. Contact us for advice.

For more information about write off and whether it is a realistic option for you, see our Write off debt guide.

Further credit and spending

Some mental health conditions can make it more difficult to manage money. Sometimes this can mean that you take out more credit that you can afford, or spend money on things that you don't really need. This can make your overall situation more stressful, increase your debts, and make it difficult to keep to payment arrangements with your creditors. In these circumstances it might be helpful to add a 'notice of correction' to your credit reference file.

Notice of correction

Details about your credit agreements and payment history are held by credit reference agencies. This information is used by creditors when they decide whether to lend you money.

If you are worried that you might take out unnecessary credit, you can add a 'notice of correction' to your credit reference files. This is a statement of up to 200 words that allows you to explain your circumstances to potential creditors.

• Adding a notice of correction will mean that your application is read by a person and not just given a computer score.
• You can ask the credit reference agencies whether they have any standard wordings that you can use, or adapt.
• Applications usually take longer to assess when there is a notice of correction on your file. This can be useful if you are likely to make unnecessary applications for credit, as it gives you time to reconsider.
• It can be used as a temporary measure, and you can remove the notice of correction at any time.
• Only organisations that are actively checking your credit reference file will see the notice.
• It is a good idea to review whether you need the notice of correction regularly.

For more information about credit reference files, see our Credit reference agencies guide.

Debt and Mental Health Evidence Form (DMHEF)

Medical evidence is only usually needed where your mental health is seriously affecting your ability to manage your money and debts. If your creditors will not accept evidence that you already have available, such as your latest prescription, consider using the Debt and Mental Health Evidence Form (DMHEF).

The DMHEF is a standard form that is used to ask health and social-care professionals for evidence of your circumstances. It was designed to make it easier to collect this information for you and your creditors.

Once the form is completed, it can be photocopied and sent to all your creditors. The DMHEF does not have to be accepted by your creditors, but many are familiar with its content and some were involved in its design. The DMHEF is also recognised by the FCA, which is the organisation that regulates the credit industry.

The DMHEF is a short form, which asks your health or social-care professional to confirm that you are experiencing a mental-health issue. It also asks them to answer three optional questions to give an overview of how your mental health issue affects you. This can help your creditors to assess what support they can offer you when dealing with you debts.

The optional questions ask for information about the following.

• How does the mental health problem(s) affect their ability to manage money?
• How is the person's ability to communicate affected by their mental health problem(s)?
• Is there anything else you can tell us that would help the person (severity/duration; relevant treatment; whether in crisis)?

If you are considering using the DMHEF, phone us for advice.

Fees and charges

General practitioners (GPs) can no longer ask you to pay them to complete the DMHEF. Other health and social-care professionals will not usually charge you to complete this form.

If you are being asked for payment, contact us for advice.

Useful contacts

Adferiad Provides advice and support to individuals living in Wales who are experiencing a serious mental health illness. Phone: 0149 286 3000 if living in North Wales, or 0179 281 6600 if living in South Wales
https://adferiad.org

Anxiety UK Offers supports for people living with anxiety disorders by providing information, support and understanding through a range of different services. Phone: 0344 477 5774 www.anxietyuk.org.uk

Financial Conduct Authority (FCA) Phone: 0800 111 6768 or 0300 500 8082
www.fca.org.uk

Mental Health Foundation The website provides useful information on looking after your mental health and wellbeing. See the Your Mental Health section. www.mentalhealth.org.uk

Mind Provides confidential advice and support to anyone experiencing a mental health problem. Phone: 0300 123 3393 www.mind.org.uk

NHS Choices The website offers information on a range of mental health issues. www.nhs.uk/Livewell/mentalhealth/Pages/Mentalhealthhome.aspx

Rethink Mental Illness Runs a national helpline and support groups for people living with mental illness, their carers and relatives. Phone: 0808 801 0525 www.rethink.org

Samaritans Runs a confidential listening service. Phone: 116 123 www.samaritans.org

Sane Provides emotional support and information to anyone affected by mental illness. Phone: 0300 304 7000
www.sane.org.uk

Shout Provides a confidential text service for anyone in crisis. Text the word 'Shout' to 85258 www.giveusashout.org

Other guides that may help you

Breathing space guide

Credit reference agencies guide

Ways to clear your debt guide

Write off debt guide

Use this guide to:

• understand what you should think about before borrowing money;
• work out if you should consider consolidating your debts;
• see what different types of credit might be available to you; and
• find the right kind of debt solution for you.

Debt consolidation is where you take out new credit, such as a consolidation loan and use the new credit to pay off your existing debts in full.

Taking out more credit is usually not a good option if you are struggling to pay essential bills, or are already missing payments on your debts. Debt consolidation loans can seem like a good solution, but can sometimes just lead you further into debt.

There are different ways of borrowing. Depending on your situation, some may be better for you than others. This guide explains the differences between various sorts of credit that you can get.

Budget before you borrow

Before deciding to take out credit, or consolidate your debts, you should use My Money Steps to work out your budget.

You need to work out how much money you have left after paying your day-to-day living costs. Your budget will help you to see:

• whether you can afford the payments on your existing debts; and
• how much you can afford to pay towards any new credit you take out.

Make sure your budget is accurate and update your budget whenever there is a change in your circumstances. If you take out credit but cannot afford the payments, you can end up having to pay back a lot more than you originally borrowed. If you are not sure if your figures are realistic, contact us for advice.

Should I consolidate?

I can afford my current payments

If you can afford the payments on your debts each month and have not fallen behind with any of your payments, you will not need debt advice from us. However, you may still need help and advice, especially if you can only afford the minimum payments or if the interest repayments on your debts are high.

It is always a good idea to get independent advice before you borrow money. MoneyHelper can give you free general advice about credit. They can also help you find suitable independent financial advice if you need it. Go to www.moneyhelper.org.uk or call 0800 138 7777 for more information.

A consolidation loan can sometimes lower the monthly amount that you need to pay towards your debt. In some situations, this may also mean that you have extra money available to spend each month on things you choose to, such as hobbies. However, some consolidation loans may take you a longer time to pay back than your original debt. This can make some consolidation loans more expensive in the long term than your current debt.

If you are considering applying for a consolidation loan, always check the following.

• Look at the overall cost of the loan, as well as how much you will pay each month. This is important because if you miss payments on a consolidation loan, the lender could ask you to repay the loan in full, including all the interest that would have been paid by the end of the agreement. You could owe a lot more money than you would have done if you hadn't consolidated your debts.
• Check the interest rate you are being offered. Some consolidation loans can have higher interest rates than other types of loan. Also, a lender's best deals are usually only available to people with the highest credit ratings. This means that you may be offered a consolidation loan at a higher interest rate than expected.
• Make sure you are getting the best deal you can by shopping around. See Shopping around for credit on the net later in this guide.

There may be other cheaper and quicker ways of clearing your debts. We have listed a couple of examples in the next section. We also suggest that you get independent advice before you take out new credit.

Look for better deals

If you have a credit card debt, it might be cheaper to move your existing debt to another credit card with a lower interest rate or to one that offers a zero% interest deal. This is called a balance transfer and you may have to pay a fee to complete the transfer.

Always check how long the new credit card deal will last for and make sure that you can afford the payments. Most zero% interest deals only last for a number of months. This means that you will start paying interest again at the end of the term, unless you pay the debt off in full beforehand or move the balance to another zero% interest deal. Also be aware that a lender may be able to end a zero% interest deal early if you fall behind with your regular payments.

Shop around to make sure you are getting the best deal you can. Remember that a lender's best deals are usually only available to people with the highest credit ratings. For information about price comparison sites, see Shopping around for credit on the net later in this guide.

Paying off some debts more quickly

If you can afford the payments on your debts each month and have extra money available, you may want to consider paying extra towards some of your debts each month. It will usually mean that you will pay less later.

It will usually save you money if you pay extra towards your debts with the highest rates of interest first. Although, be careful not to forget about any debts that have limited interest free periods, such as zero% interest credit cards or buy now pay later agreements. If you have these debts and do not pay them off in time, you might end up owing more money.

Instead, you may want to focus on repaying your smallest debts first. While this can be more expensive for you, it can mean that you see results more quickly. This is because you won't have to wait as long to see some of your debt paid off in full. This could help motivate you to stick to your budget and repayments.

MoneyHelper has a range of online calculators that can show you how long it will take to repay your debts. The Credit card calculator also shows you how paying extra each month will reduce the amount of interest you are charged overall and the time it will take to clear your debt. See Shopping around for credit on the net later in this guide.

If you cannot meet your monthly payments

We do not generally recommend borrowing more money if:

• you cannot afford to pay your existing debts; or
• you have missed payments and have received default notices for some of your debts.

To consolidate your debt, you will have to borrow enough to pay off your existing debts and you will also have to pay interest on the new agreement. If you default on the consolidation loan, you will normally be asked to pay back the amount you have borrowed, plus the interest that would have been added throughout the term of the new loan. You can end up in a lot more debt.

If you have missed payments on your current debts, your credit rating will usually have been affected. This means that you will miss out on the best deals, and may be offered higher rates of interest if you apply for more credit. You may even be turned down for credit.

There may be other way to deal with your debt situation. For example, creditors may agree to freeze the interest on your debts if you make affordable offers of payment, or if you cannot afford to repay your debts in full, you may be able to get some of the debt written off. For more information, see Ways to clear your debt guide or contact us for advice.

Borrowing to buy

Lots of people take out credit for all sorts of items such as buying a new car or a new sofa. Working out your budget will help you find out how much you might be able to pay on a monthly basis. Think carefully about what you can afford, and shop around for the best deals.

If you already have debts that you are finding it hard to pay, taking out more credit might mean missing payments on your on-going household bills and your other debts. If you are already struggling with payments, contact us for advice.

Taking out more credit

Taking out credit is not usually a good option if you are struggling to pay essential bills, or are already in debt. Below are some practical tips to consider before borrowing money.

• Make sure you know how much the credit will cost. Most forms of credit are expensive. If you feel the only way to afford something is to spread the cost by taking out a loan, be very careful to shop around for the best deals.
• Check the interest rates on offer and compare different forms of credit to see how much you have to pay in total over the whole borrowing period.
• The interest charges on credit are called the ‘Annual Percentage Rate’ or ‘APR’ This tells you how expensive the loan will be. Generally, the APR will be higher than the quoted interest rate and will show the true cost of the credit.
• The longer you take to repay, the more interest can be added, so always try and pay things back as quickly as you can.

Types of credit

Credit cards

You may be able to get a credit card that has an interest free period and allows you to transfer the balance of your current credit card to it. This can be a good option if you can pay the whole debt within the interest free period allowed on the card. You need to check the cost of transferring any credit card balances as most companies will charge an initial percentage of the debt to make the transfer.  

You can also use a credit card to purchase items. If you can pay the whole debt within the interest free period allowed on the card, this can be a good option. If you cannot repay the full amount in one go, you will be charged interest on the balance each month. This may be very expensive. Making the minimum payment on a credit card might be tempting, but it means your debt will decrease very slowly and could take years to pay off.  Always clear as much of the balance as you can afford. This is also important because only making minimum payments can affect your credit rating, affecting your ability to borrow in the future. Shop around for cheaper deals on credit cards.

Bank overdrafts

If you think you are going to need an overdraft, try to arrange this with your bank or building society in advance. If the overdraft is agreed, you will know how much you can spend from your account. An overdraft that is agreed in advance is often called an ‘authorised overdraft’.

The amount of interest charged on overdrafts can vary between different banks and building societies, so shop around for the best accounts.

• Check the balance on your account regularly so you know how much you have spent.
• Aim to keep the account in credit when possible.
• Overdrafts are repayable on demand. This means a bank can ask you to pay the whole amount back in one go if they choose to.

Payday loans

A payday loan is a type of cash loan that is normally paid into your bank account. They are called ‘payday loans’ as they are intended to be short-term loans and meant to be paid back when you next receive your wages or benefits.

The interest rates are usually very high, so it can be easy for the debt to get out of control if you can’t afford to repay on time.

For more information, see our Payday loans guide.

Instant credit ‘buy now pay later’

It can be very tempting to take out credit, perhaps for a bargain in a sale, which you don’t have to make payments on for many months. Be very careful. Fill in a budget to make sure that you can afford the future payments you will have to make under the credit agreement. Build in the future payments to make sure you will be able to afford them.

If you are offered interest free credit, check that the credit is really interest free. Some agreements say in the small print that interest will be added as soon as a payment is missed or after the promotional period has ended.

Doorstep credit or catalogues

The interest on cash loans or catalogue goods can be high but tends to be ‘hidden’ because you may only look at your weekly payment amount rather than the APR being charged. Compare the total cost with the price you would pay for the same item in shops or online. You can find out what credit is available locally and how much it costs on the website www.lenderscompared.org.uk. The website also has information about the availability of credit unions.

Rent to buy

This is a type of hire purchase agreement. With rent to buy you won’t own the goods until you finish paying. This means you can’t give or sell the goods to someone else, and the lender can sometimes take the goods back if you don’t pay. Interest can be high, but again may be ‘hidden’ if you only look at the weekly payment rather than the APR. Compare the price you would pay for the same item elsewhere.

For more information, see our Hire purchase debt guide.

Guarantor loans

Some loan companies may ask you to get a friend or relative to be your guarantor. This means that if you miss payments, your guarantor can be asked to pay instead or to compensate the creditor for their losses.

Depending on the terms of your agreement, the guarantor may become liable to pay back everything that you owe, not just the payments you have missed.

Credit union

If you are a member of a credit union, you can usually borrow at least two or three times the amount you have in savings, depending upon the loan policy of your credit union. A credit union will also normally pay out a dividend to you once a year. If you miss payments on a loan, the credit union may be able to use your savings to repay the loan.

LETS schemes

‘Local Exchange Trading Schemes’ (LETS) are a ‘money free’ way of bartering goods and services. You can ‘buy’ goods using tokens and ‘earn’ tokens by providing a service back, e.g. baby-sitting or window cleaning. Check in your library for details of any local scheme or check the LETSlink UK website at www.letslink.org.

Shopping around for credit on the net

Giving personal information to organisations on the web can be a risky business and could lead to unwanted contact later. Read the ‘small print’ and the content of the pop-up boxes before you confirm that you agree to terms and conditions. Think carefully before you give away any information on the net.

General, best buys, credit cards and personal loans

Mortgage deals

As well as the websites listed previously.

Independent financial advice

Other guides that may help you

Hire purchase debt guide

Making the most of your money guide

Payday loans guide

Ways to clear your debt guide

Use this guide to:

• see who is eligible for a DMP through National Debtline (NDL) or Business Debtline (BDL);
• understand how a DMP works; and
• find out how to start to set up your DMP through NDL or BDL.

Can I have a DMP through NDL or BDL?

You may be able to have a DMP through NDL if you:

• can afford to pay at least £5 to each of your debts every month; and
• can repay your debts within 10 years.

How does a DMP work?

First you need to put together a budget sheet to see whether you have enough available income. You can use My Money Steps to complete your budget.

• Add up all your household income. Then add up all your essential expenses, like rent, mortgage, household bills, food, travel, child care.
• Take the second figure from the first.
• What you have left over is your available income to pay your debts.

Are you self-employed?

If you are self-employed you will need to complete a business and household budget sheet instead. Contact Business Debtline on 0800 197 6026 or see their website for help and advice.

Other debt options

A DMP is a good option for people who can afford to make regular payments to their creditors and want a hassle-free, easy way to pay. We look at all your options with you so that you can make the best choice.

We can also advise you about alternative options such as bankruptcy, individual voluntary arrangements (IVAs) and debt relief orders (DROs).

Interest and DMPs

Creditors do not have to freeze interest under a DMP. The debt management company will have to persuade each creditor that it makes sense for them to freeze interest and charges to avoid the debt increasing.

DMP fees

You may come across companies who offer to arrange a DMP for you if you pay a fee. These companies will also charge you a monthly fee for as long as you have a DMP with them. Be very careful about agreeing to get involved with these companies because there is no need for you to pay for a DMP.

If you ask us to help you to set up a DMP, we will not charge you for this help and neither will the DMP provider that we work with. At National Debtline, we advise against using any company that charges a fee for a DMP because you may be able to get the same service from a free provider. Whilst there are other free providers of DMPs, we work closely with UK's largest provider of genuinely free DMPs, and as part of this we will receive a charitable donation for each DMP that is set up. Our free DMP provider will use all of any payments you make to reduce your debt, but usually your creditors will make a voluntary payment to the DMP provider and we will receive part of this payment. We will use any payments we receive to support our ongoing charity work of giving help and advice to people with debt problems.

Annual statements

Under the rules in the Consumer Credit Act 1974, your creditors will usually have to keep sending you annual statements, as well as arrears and default notices in a set format. This will happen even when you are in a DMP. Don't worry, this does not mean that there is a problem with your DMP. If you receive other letters from your creditors demanding payment, contact us for advice.

What do I do next?

If you are interested in a DMP and you are a first time caller, phone us now on our freephone number. When you ring, you can speak to an adviser who can give you more information about DMPs and advise you on your options.

If you have called National Debtline (NDL) before and we have advised you that a DMP is a good option for you, please call our freephone number 0808 808 4000.

If you have called Business Debtline (BDL) before and we have advised you that a DMP is a good option for you, please call our freephone number 0800 197 6026.

Changing your DMP provider

If you are currently in a DMP but are being charged for it, you may want move to a free DMP.

We can set up a free DMP if you are eligible, or give you advice about other options that may be better for you. Contact us for advice.

What happens if I move?

If we agree to help you set up a free DMP, we will need some more information about your debts. Ask your previous provider to send you up-to-date balances, account numbers and reference numbers for all your creditors.

There will be a period of time when you are waiting to make your first payment on the new plan, and this may result in a delay in payment to your creditors. You need to let your creditors know that you have changed your DMP provider. It would be best to do this as soon as you receive your confirmation letter. Use our sample letter Hold action while you move your debt management plan to write to your creditors to let them know your situation.

Your monthly payment to the new free DMP may not be the same, which means the payments to your creditors may change. If you receive any letters from your creditors, please call your new debt management company straight away to tell them what the letters say.

Generally, fee charging debt management companies keep your first monthly payment as a 'deposit', which is used to make your final payment on the plan. This can mean they keep your money for many years. Please read through your previous service agreement to see if this has happened. Ask the company to refund any money that is owed to you.

Rules and guidance

All fee charging debt management companies have to follow the rules and guidance given by the Financial Conduct Authority (FCA) in the Consumer Credit sourcebook (CONC). The guidance includes the following requirements.

• The debt management company is required to outline the circumstances in which you may withdraw from the contract and receive a refund. This must be in the terms and conditions of the contract.
• They must not make misleading claims such as 'debts can be written off' or 'interest stopped' when companies cannot guarantee creditors will do this.
• Consumers must be given adequate information before entering into an agreement. Contracts should state the nature of the service provided, total cost to the consumer, amount to be repaid and duration of the contract. Contract terms should be fair, legible and in plain language.
• Debt management companies must inform clients of the outcome of negotiations with creditors, as well as any action a creditor has taken, such as the issue of a default notice or the threat of legal action.

If you feel that the company has not followed these guidelines, you should ask for a full refund of your deposit in your closure letter.

Sample letters

Use the Cancel your existing debt management plan sample letter to close your account. You can also use this letter to complain and to list any rules that the debt management company has broken.

Add details of exactly what has happened if you need to, and ask them to reply within 14 days. If they haven't replied within 14 days, copy the first letter and send it along with a covering letter that says 'Please reply to the previous letter within 14 days, copy attached'.

If the debt management company fails to reply again, contact us for advice on how to pass on your complaint to the Financial Ombudsman Service or the Financial Conduct Authority.

Use our sample letter Hold action while you move your debt management plan with all of the creditors that have been included in your new DMP. Keep a copy of all the letters you send.

Your credit reference file

If you miss payments on a credit debt, this will be recorded on your credit reference file by your creditor whether or not you then set up a DMP. This will usually make it harder for you to get credit. Some creditors may also ask for a note to be put on your credit reference file to say you are on a DMP.

Should I use my pension to pay my debts?

Since April 2015, if you are 55 or over , you may be able to take money from your pension fund to pay your debts. Creditors shouldn't pressurise you to do this. Taking money from your pension fund early can have a big effect on your financial future. You may also have to pay tax on some of the money that you take. Your entitlement to benefits could change, both now and in the future. If you are thinking about taking money from your pension, contact us for advice.

Other guides that may help you

Credit reference agencies guide

Ways to clear your debt

Use this guide to:

• find out if you qualify for a DRO;
• find out which debts can be included in a DRO; and
• understand the effects of a DRO on you.

This guide includes some useful contacts and links for you to get further help.

The sample letters mentioned in this guide can be filled in on our website.

Applying for a DRO

This guide explains the rules that the Insolvency Service has about applying for a DRO. It is free to apply for a DRO, but your application must be made through a special adviser called an 'approved intermediary'.

If you decide that a DRO is the best solution for you, contact us for more advice. If a DRO is a suitable solution for you, we can explain how to apply.

The decision on whether to approve your DRO application will be made by a government official known as the official receiver.

Joint applications

You cannot apply for a DRO jointly with another person. If you and your partner both want a DRO, you each have to apply separately. Contact us for advice.

When can’t you apply?

You will not be eligible for a DRO if you:

• are already bankrupt;
• are in an individual voluntary arrangement (IVA) or an interim order has been made to protect you from creditor action while you wait for an IVA to be approved;
• are subject to a bankruptcy restrictions order or undertaking, or a debt relief restrictions order or undertaking; or
• have a bankruptcy petition pending against you, unless a court has referred you for a DRO.

If you are not eligible for a DRO, contact us for advice on what solutions are available for you to deal with your debts.

Do I qualify?

There are strict rules that you have to meet to qualify for a DRO. You must:

• be unable to pay your debts;
• have total debts of £50,000 or less at the date the application is approved by the official receiver;
• have assets worth a total of £2,000 or less;
• not have a car or motor bike worth £4,000 or more (unless it has been adapted because you have a disability);
• have £75 a month or less spare income after normal household expenses are taken into account;
• live in England or Wales (or have lived or run a business in England or Wales in the last three years); and
• not have had a DRO in the last six years (although you may still qualify if your DRO was cancelled).

Debts that are included

You can include most types of debt in your application as long as your total debts are no more than the £50,000 limit.

Priority debts

You should include priority debts. Examples include:

• rent arrears;
• gas and electricity debts with your current supplier;
• arrears on your phone bill if you need to keep it as an essential service;
• council tax, business rates and community charge arrears; and
• income tax, VAT and National Insurance arrears.

Arrears on priority debts

When you are working out how much you owe, make sure you include any arrears you have on priority debts. You will need to pay your ongoing rent, energy, council tax bills and so on as normal.

Credit debts

You usually need to include all your credit debts in the application. If you leave a debt out, it cannot be included later. See After your application is sent in the later section The DRO application.

Examples of debts you may include are:

• water arrears;
• credit cards and store cards;
• bank overdrafts and bank loans;
• loans to finance companies;
• catalogues;
• home-collected credit;
• benefit overpayments;
• family or personal debts;
• hire agreements;
• parking penalty charges; and
• mortgage shortfalls (money you owe if your house was sold for less than the outstanding mortgage).

You may also owe debts from a small business such as:

• money owed to employees;
• debts to customers who have paid for goods or services that were unable to be supplied; and
• debts to suppliers.

Benefit overpayments

Benefit overpayments cannot be recovered by any method, including deductions from your ongoing benefits, if they are included in a DRO.

Debts to include

If you are not sure what debts you should include in the DRO application, contact us for advice.

Excluded debts

Some debts do not count towards the £50,000 limit, although you still have to list them in the DRO application. This means you are still liable to pay these debts in full. You cannot include:

• magistrates' court fines;
• maintenance, Child Support Agency (CSA) and Child Maintenance Service (CMS) payments and arrears;
• student loans;
• budgeting loans and crisis loans;
• money owed under a 'criminal confiscation order'; and
• debts resulting from certain personal injury claims against you.

You will need to make sure you pay ongoing payments on these debts and include them in your outgoings.

Hire purchase and conditional sale

If you are not in arrears with your hire purchase (HP) or conditional sale agreement, you can choose to exclude the whole balance of the debt from your DRO application. If you decide to leave an HP or conditional sale agreement out of your DRO application, payments towards the agreement will only be an allowable expense if:

• the agreement is for a vehicle worth less than £4,000;
• the agreement is for an item that is needed to cover a basic domestic need; or
• you have a disablity and the agreement is for a vehicle that has been adapted for your use.

If the HP or conditional sale agreement is for a vehicle that is worth £4,000 or more and it has not been adapted because of a disability, payments will not usually be an allowable expense.

If a payment towards the agreement is not an allowable expense, it means you will need to include the debt in your application unless:

• a third party, such as a family member or friend, is willing to take over the payments for you; or
• the payment is £75 per month or less and you have the spare income to pay this.

If you are in arrears with your HP or conditional sale agreement, you must include the arrears in your DRO application.

For more information on HP or conditional sale agreements and DROs, contact us for advice.

What if my debts are near the £50,000 limit?

Creditors can add interest and charges to your debts up until the date the official receiver approves your DRO. Therefore, if your debts are near the £50,000 limit when you start the application process, your debts could rise to above £50,000 by the time the official receiver considers your application. If this happens, the official receiver will not approve your DRO.

You need to think about the following ideas and get further advice.

• Check what sort of debts you have. Some creditors may not be adding extra interest and charges. But you may have a credit card or a store card which has a high interest rate that is building up each month.
• Try to persuade your creditors to freeze the interest. You can send your creditors the sample letter Hold action while you apply for a debt relief order. However, this letter should only be sent to your creditors when you have an approved intermediary dealing with an application for you.
• If you are able to, make payments to your creditors to prevent the debts reaching the £50,000 limit. Contact us for advice as you need to be careful to treat all your creditors fairly if you decide to do this.
• Think about whether anyone can help you make the payments to help keep your debt below £50,000.
• You may be able to apply for a time order. This is a way of asking the court to give you more time to pay a particular type of debt, which may help to prevent the debts reaching the £50,000 limit. See our Time orders on unsecured debt guide for more information.
• With a time order, the court can also change some of the terms of the agreement, such as the rate of interest. This is a complicated area, so contact us for advice.

Assets

You can have assets worth up to £2,000 and still qualify for a DRO. Lots of basic household items such as cutlery, crockery, cookers, televisions, beds or furniture do not count as assets.

The value of your assets is worked out using the resale value, not how much the item was worth when you bought it, unless it is brand new. Assets may include antiques, luxury items or valuable collections, stocks, shares, premium bonds and savings.

If you own a car or motorbike, then your adviser will need to check the value using Parker's Guide. See Useful contacts towards the end of this guide. If it is worth less than £4,000, then it will not be taken into account as an asset. If you have a specially adapted car because of a disability, contact us for advice.

Pensions

Pensions approved by HM Revenue and Customs (HMRC) do not count towards your £2,000 asset limit. A small number of pensions not approved by HMRC will count as assets.

If you are 55 years old or older and can draw part or all of a pension as a lump sum, the value of your pension may affect whether you qualify for a DRO. Contact us for advice if this affects you.

Any regular payments you receive from a pension will be treated as income when deciding whether you qualify for a DRO.

Cars on hire purchase or conditional sale agreements

Don’t include a car you have on a hire purchase or conditional sale agreement as an asset. The car belongs to the creditor until you have paid off the total debt. Don’t forget to count the balance you owe in your list of debts.

The DRO application

Before making your application, you will need to think about the following steps.

• Getting advice about whether you may qualify.
• Completing a personal budget to see how much money you have coming in and going out. Use My Money Steps to work out your budget.
• Collecting details about your debts and how much you owe each creditor.
• Checking your credit reference file to make sure you haven't forgotten any debts.

Listing debts

It is important that you provide accurate amounts for what you owe when you apply for a DRO. This is because the official receiver will only include the amount of debt that is stated on your application form in your DRO.

If you use an out-of-date statement to find out how much you owe a creditor, you may find that the creditor asks you to pay the difference.

For example, if you have a credit card debt that was £3,200 when you complete an application form and some interest gets added on that takes the debt to £3,225, the creditor may ask you to pay the extra £25.

Ask your intermediary when they will submit your application to the official receiver. If there is a delay between you filling in an application form and your approved intermediary sending the application form, it is a good idea to provide up-to-date balances just before your final application is submitted.

After your application is sent

• The official receiver will decide whether to grant your application for a DRO. They can ask you for more information and you must be as helpful as you can. You may want to seek more advice if this happens. Contact us for advice.
• The official receiver will also ask a credit reference agency for information about your credit file. This will help them to check the details that you have provided in your application.
• If the official receiver approves your application, they will send you a letter to confirm that you have been given a DRO.
• The official receiver will also send the order to all the creditors listed in your application.
• Your creditors may object to the DRO being made. They can also object to being included in the DRO or to the details of their debt as listed in the DRO. They can only make such objections on certain grounds, for example that you are not eligible for a DRO. It is not a valid ground for a creditor to object just because they don't want to be included in the order.
• If your DRO stands, all the debts that are included in the order are put on hold for 12 months. This is called the 'moratorium period'.
• You should not usually make any more payments on your debts. There are some exceptions to this rule (for example in some situations if you have rent arrears). Contact us for advice.
• Your creditors that are included in the order are not usually allowed to ask you to make any more payments. If this happens, tell the creditors about your DRO using our sample letter Creditors asking for payments after debt relief order approved. You should also let the official receiver know. Contact us for advice.
• If your application is rejected, the official receiver will tell you and your intermediary the reasons.

Future statements from creditors

Under the rules in the Consumer Credit Act 1974, your creditors will usually have to keep sending you annual statements, as well as arrears and default notices in a set format. This will happen even when you are in the 12-month moratorium period under your DRO but should stop after that. Don't worry. This does not mean that there is a problem with your DRO. If you receive other letters demanding payment, contact us for advice.

What happens if a debt is left out?

If you forget about a debt and find out about it after the DRO has been agreed by the official receiver, the debt cannot be included in the DRO. The creditor can continue to take action against you to recover the debt. This means you will need to negotiate repayments separately with that creditor. If this happens to you, contact us for advice. If this debt takes your total debts over £50,000, the official receiver will consider ending or 'revoking' your DRO.

The official receiver

It is very important that you co-operate with the official receiver throughout your DRO application.

• You must tell the official receiver about any changes in your circumstances after you apply for a DRO.
• You must give information about your finances to the official receiver if they ask.
• Make sure you have given the official receiver a full list of your debts and assets.
• Tell the official receiver if your income increases, or if you come into any property or a lump sum whilst you have a DRO.

Effects of a DRO

If your DRO application is approved, it can affect you in the following ways.

• Certain restrictions will be placed on you for 12 months from when the DRO is approved.
• In certain circumstances a 'debt relief restrictions order' can be placed on you.
• Your bank account may be frozen.
• The DRO will be recorded on your credit reference file.
• The DRO will be recorded on a public register called the 'Individual Insolvency Register'.
• Your job could be affected. This is only likely to be the case where your contract of employment states that you are not allowed to have a DRO.
• If you rent your home, your tenancy could be affected. Check your tenancy agreement to see if it states that you are not allowed to have a DRO and contact us for advice.
• The rules for renting a home in Wales changed on 1 December 2022. Most tenants in Wales are now known as 'contract-holders' and most tenancies in Wales are now known as 'occupation contracts'. If you rent your home, check your contract to see what type of agreement you have and how it can be ended.
• If you are applying to stay in the UK or for British citizenship, a DRO can impact on your immigration status. If you are concerned that this may affect you, you should seek specialist immigration advice. For information on how to find an immigration adviser, see the GOV.UK page Find an immigration adviser.

What restrictions will be placed on me?

The main restrictions are as follows.

• You must not take out credit of £500 or more without telling the lender that you have a DRO.
• You cannot run a business in a different name without telling everyone you do business with the name you used for your DRO.
• You cannot be involved with the promotion, management or formation of a limited company, or act as a company director without getting permission from the court.
• You may not hold certain public offices.
• You cannot apply for a DRO again for six years.

Debt relief restrictions orders

If the official receiver finds that you have not been honest and open about your finances either before or during the DRO, or they decide that you have behaved irresponsibly, they may ask you to agree to a 'debt relief restrictions undertaking'.

If you refuse, they may apply to the court for a 'debt relief restrictions order'. This means that you will still have certain restrictions on you for between 2 and 15 years after the date of the DRO. Your details will also be kept on the Individual Insolvency Register for the lifetime of the order plus an extra three months.

What will happen to my bank account?

If your DRO application is successful, your bank account will not necessarily be frozen. It will be up to your bank or building society to decide if you are allowed to keep the account open. If you have a debt with your bank or building society, it is likely that your account will be frozen after your DRO is approved. Even if you do not have any debts with your current bank, you account may still be at risk. Check the terms and conditions of your account and contact us for advice.

There is nothing to stop you applying to open a new bank or building society account when you have a DRO, but the bank or building society may ask you if you have a DRO. It is then up to the bank or building society to decide whether they will let you open an account with them. You may be able to open a basic bank account instead. It is a good idea to open a basic bank account after your DRO is approved to try to avoid any problems. See our Safe bank accounts guide for more information.

How will a DRO affect my credit rating?

Credit reference agencies keep information on DRO's for six years in the same way as they do for most other information. See our Credit reference agencies guide for more information.

Even after six years, your ability to get a mortgage could be affected. This is because some lenders may ask if you have ever been made bankrupt or had a DRO.

How long will my DRO be on the Individual Insolvency Register?

• Your DRO will be displayed on the Individual Insolvency Register in the same way as a bankruptcy order.
• Your details will be held on the Individual Insolvency Register for the 12 months your DRO lasts, plus an extra 3 months. This means 15 months in total.

What other solutions are there?

If you do not qualify for a DRO, there may be other solutions available to deal with your debts such as bankruptcy, a debt management plan or an individual voluntary arrangement. National Debtline can advise you on the solutions available to you in your circumstances. Contact us for advice.

Useful contacts

Debt Relief Order Unit Insolvency Service Phone: 0300 678 0015 Email: DRO.Unit@insolvency.gov.uk

Individual Insolvency Register www.insolvencydirect.bis.gov.uk/eiir/

Insolvency Service www.gov.uk/government/organisations/insolvency-service

Parkers Guide www.parkers.co.uk/cars/prices/

Other guides that may help you

Breathing space guide

Credit reference agencies guide

Safe bank accounts guide

Time orders on unsecured debt guide

Ways to clear your debt guide

• find where to get the support you need;
• understand if you may be liable for someone’s debts when they die;
• understand how home ownership is affected by a person’s death; and
• find out what kind of bills and debts might need dealing with.

If you have been affected by bereavement, it's important that you get the emotional support you need. The Cruse Bereavement Care freephone national helpline is staffed by trained bereavement volunteers. Call them on 0808 808 1677.

Steps to take after someone has died

Trying to sort things out after the death of a loved one can be distressing. If you find you are struggling, try and find a friend or family member that can help you.

If you are unable to find anyone who can give the help you need, MoneyHelper offer practical advice and support to anyone following bereavement. They cover a range of topics such as what you need to do straight away after a death, registering the death and arranging the funeral.

One of the first things you'll need to do is register the death, this needs to be done at a register office very soon after it happens. There are rules about which register office to use. See GOV.UK to find out how to register the death in more detail.

Tell Us Once

Speak to your Register Office about the Tell Us Once service, this passes information about a death to most government organisations. You report the death once and the Tell Us Once service tells most government departments. Go to GOV.UK to find out if your local register office uses the Tell Us Once service. The information you find will also tell you which organisations to contact to report the death if the Tell Us Once service is not available.

DWP bereavement service

The Department of Work and Pensions (DWP) bereavement service will check all the DWP benefits the person who has died was receiving. The service can also check whether the next of kin can apply for bereavement benefits or a funeral payment. You can contact the service on 0800 731 0469. Please go to our Help with Funeral costs and benefits section for more information on what help you may be able to get if your partner or spouse has died.

Life insurance

You should check whether the deceased has any life insurance policies that should pay out. Any money paid out would go to either:

• the policy holder or their estate if they have died;
• a surviving joint policy holder if the policy is in joint names and one policy holder has died;
• a beneficiary that was nominated by the policy holder; or
• a trust.

Speak to the life insurance company find out.

Other organisations that my be useful

Death Notification Service

The Death Notification Service has been created to tell a number of banks, building societies and financial institutions at the same time about a person’s death. The aim is to make the process secure, quick and straightforward.

If your case is particularly complicated or time-sensitive (for example, if money or property needs to be released from the estate urgently), you should discuss it with the deceased person's bank or building society before using this service. There's information in the Frequently Asked Questions about what you can do in this situation.

You do not need to create an account to use this service, but if you do:

• you will receive confirmation that the information has been received by the financial institutions; and
• if you find more accounts held by the person that has died, you can add them to your information later.

If you have any difficulties creating an account, contact the Death Notification Service Helpline on 0333 207 6574 from the UK or +44 121 4150965 from overseas (opening hours 08:30-17:30, Mon-Fri – excluding bank holidays).

HMRC bereavement helpline

Once His Majesty’s Revenue and Customs (HMRC) have been notified of the death, they will speak to the personal representative about the deceased's tax affairs. See the Personal representative duties section for more information about personal representatives.

HMRC will be able to provide details of:

• any pension or employment income;
• details of any bank accounts; and
• copies of the last tax return (if the deceased was in Self Assessment.)

My Lost Account

My lost account is a free service that can help find bank accounts that have not been used for three years or more. This may be useful if you are handling the deceased persons finances as you can check if they had any accounts you are unaware of.

The Pension Tracing Service

The Pension Tracing Service is a free service that can help find unclaimed pension pots. This may be useful if you are handling the deceased persons finances as you can check if they have any pensions you are unaware of.

What happens to debts when someone dies?

If the debts are in the deceased person's sole name and they have no assets, the debts will not be owed by anybody else when they die.

If the debts are joint, then the surviving person will be liable for these debts. If someone has acted as a guarantor, they may be liable for these debts or for any losses incurred by the creditor. If you have been left with debts which are unaffordable please contact us for advice.

If the deceased person has assets in their estate, joint or sole, the debts become a liability on the estate. The executor of the estate is responsible for paying outstanding debts from the estate. Find out more in our Dealing with the estate section.

Dealing with debts if there is no estate

The estate is made up of assets that have been left behind. Assets can include:

• property and land;
• money in bank accounts; and
• personal possessions.

If there is no estate, you or a third party cannot be held liable for debts if you did not take them out jointly or did not act as a guarantor.

Contact any organisation that is owed money and inform them of the death. You are able to inform most organisations online, they will want a copy of the death certificate and details. Inform them that there is no money in the estate and ask them to confirm that the account is closed. You can use our Write off after death sample letter to help you.

More detail on dealing with different types of debt can be found later in this guide.

If there is no money in the estate to help you arrange a funeral please see our Help with Funeral costs and benefits section.

Dealing with the estate

If the person who has died left a will, it should say who the executor of the will is. To distribute the estate, the executor will need to apply for probate. In England and Wales this called 'Grant of probate.'

The cost to apply for probate is £300 if the estate is valued at over £5,000. The fee is usually paid for out of the estate, if there is enough money to do so. There is no fee if the estate is valued at £5,000 or less.

You may be able to get help with the fee if you have a low income. You can find out through GOV.UK.

You can apply for probate through GOV.UK.

Applying for probate may not be necessary in all circumstances, for example:

• there are no assets;
• if the estate is small, usually less than £5,000; or
• all the assets in the estate were held as joint tenants and so pass by means of survivorship (see the Joint property section below).

If the estate is complicated you may wish to use a probate specialist, though these can be expensive.

If the person who has died has not left a valid will, people close to them may be able to apply to court to get permission to deal with the estate. This person will be called an administrator. The law sets out who can apply to be an administrator in order of priority, including any surviving husband or wife, children, father, or mother and so on. A full list of who can apply can be found on GOV.UK.

Whoever deals with the estate is known as the personal representative.

If you are the personal representative and do not wish to continue to act as one, you may be able to step down. This will depend on the exact situation, so if you are considering this contact the probate helpline first.

Personal representative duties

The personal representative is able to pay for funeral expenses and administration costs out of the estate before paying any of the deceased person's creditors. The full list of personal representative responsibilities are as follows.

• List all assets and liabilities of the deceased.
• Work out the amount of Inheritance Tax (if any).
• Apply for grant of probate/letters of administration.
• Collect in all assets.
• Pay funeral expenses and administration expenses.
• Pay debts.
• Pay beneficiaries.
• Prepare estate accounts. GOV.UK has more on this.

Inheritance Tax

Inheritance Tax will need to be paid before probate can be granted. Inheritance Tax is not payable on estates worth less than £325,000. This limit can increase depending on the exact situation. Property which is left to a spouse is exempt from Inheritance Tax. Use the Which calculator to work out if any Inheritance Tax needs to be paid.

Liabilities

As well as assets, the deceased's liabilities will from part of their estate. Any liabilities could reduce the value of the estate for Inheritance Tax purposes and have to be dealt with by the personal representative.

Liabilities could include, amongst other things:

• a mortgage;
• rent arrears;
• credit cards; and
• utility bills.

We cover how these liabilities should be dealt with later on in this guide .

Paying creditors and beneficiaries

The personal representative needs to pay creditors of the deceased before payments are made to any beneficiaries, if this isn't done they could become liable for the debt.

Asking creditors to submit claims through an advert in The Gazette and local newspaper will help protect the personal representative from liability, but at least two months should be given for creditors to come forward. You can find out more through The Gazette.

Once creditors have been paid, the personal representative can pay any remaining estate to the beneficiaries set out in the will.

If there is no will then the distribution of the estate will be based on the rules of 'intestacy'. You can find out more about the rules of intestacy through Citizens Advice.

If you are living with someone but not married or in a civil partnership, this may mean you won't receive anything from an estate.

GOV.UK has a tool which can help you find out who inherits if someone dies without a will.

If a creditor or beneficiary suffers a loss as a result of the personal representative not following the correct process, they may make a claim against the personal representative. As this can be a complicated area you should get legal advice if needed. You can find a solicitor through the Law Society.

Insolvent estates

An estate is called ‘insolvent’ if the total needed to pay the funeral costs, administration costs and debts is greater than the total value of the assets.

Insolvent estates can be complicated and difficult to deal with. You may need specialist legal advice. You can find a solicitor through the Law Society.

If the personal administrator decides to pay creditors from an insolvent estate, they must do so in the following order.

• Secured creditors.
• Reasonable funeral, administration and testamentary expenses. Testamentary expenses can include things like probate fees and solicitor fees.
• Preferred and preferential debts. For example employee wages, if the deceased person employed someone.
• Unsecured creditors.
• Interest due on unsecured loans.
• Deferred debt, such as an informal loan between family members.

If there are insufficient funds to pay all the unsecured lenders in full, they should be paid on a pro-rota basis. This means that the debts will be paid proportionally, with the largest lender receiving the largest share and the smallest lender the smallest share. Failure to follow this order may mean they incur personal liability for some of the debts not paid.

Property

If the deceased person has left a property which is jointly owned, it will be owned in one of two ways.

Tenants in common

Each owner will have a defined share of the property. The shares will usually be set out in the deeds. When one owner dies, their share does not automatically pass to the surviving owner. The deceased person's share will form part of the estate and will be available to pay creditors and those named in any will. It may be possible for the co-owner to offer to pay the debts to avoid the property being sold. If you need to negotiate, contact us for advice.

Joint tenant

Each owner owns all of the property. When one owner dies, their share does automatically pass to the other owner. It does not form part of the estate available to creditors. Therefore, the property is not taken into account when working out whether the estate is insolvent.

If you are unsure how the property is owned then you should contact land registry to find property ownership information, there is a cost of £3 .

Property in insolvent estates

If the estate is insolvent, the creditor could apply to court to recover the deceased person’s assets, this would include the deceased share of the property. This is called an insolvency administration order, the creditor has five years to apply from the date of death.

For tenants in common, insolvency administration orders are very unlikely as the deceased persons equity will already form part of the estate.

Creditors do not apply for insolvency administration orders very often but it may be more likely for joint tenants as the deceased persons equity passes to the surviving owner. If a creditor threatens to do this, any surviving owner may need to try to negotiate with the creditor to prevent them making this application. The surviving owner could offer to pay a debt by instalments or offer a lump sum. If you need to negotiate, contact us for advice.

What happens to rented property after death?

Tell the council or housing association about the death, the Tell us once service can help you with this.

If the property is a council or housing association tenancy and there is a joint tenant, the joint tenant should automatically take over a tenancy. If there are any arrears the joint tenant will be liable to pay them. Rent arrears should be treated as a priority debt and an arrangement should be made to reduce the arrears at an affordable amount.

If the tenancy was a sole tenancy in the deceased person's name then any arrears should be paid by the estate. If there isn't money in the estate to pay the arrears, they don't need to be paid.

In some circumstances a husband or wife, partner or a member of the tenant's family may be able to 'succeed' or inherit the tenancy, if they have been living there when the tenant died.

If you are liable for rent arrears and are unable to afford repayments contact us for advice.

If you live in England, see our Rent arrears – England guide for more information.

If you live in Wales, see either our Rent arrears for standard occupation contracts – Wales guide or Rent arrears for secure occupation contracts – Wales guide for more information.

Ending tenancy England

In England, a tenancy will not end when a person dies and no one inherits it, the landlord or the person handling the affairs of the tenant that died can end the tenancy.

If someone has been living in the property and no one inherits the property, they have a right to stay in the property until the tenancy is ended by the landlord or the person handling affairs of the tenant that died.

For more detailed information about dealing with a tenancy after death, contact Shelter on 0808 800 4444.

Ending tenancy Wales

In Wales, if a sole contract-holder dies, the occupation contract will usually end one month after the death of the contract-holder. The personal representative can end the occupation earlier by giving notice to the landlord.

There are some exceptions to this, for example if the contact can be succeeded or for some fixed-term standard contracts that include a provision to transfer the contract on death to a third party.

For more detailed information about dealing with a tenancy after death, contact Shelter Cymru on 08000 495 495.

What happens to energy bills after death?

Tell the energy company about the death as soon as you can. Most energy companies will have an online form that you can complete. The form will ask for contact details, details of the deceased, whether gas and electricity will continue to be used at the property and details of the executor of the estate.

If there is jointly owned or jointly rented property, the person still living there will be liable for the ongoing bill.

Anyone who was already named on the bill will be liable for any gas or electricity arrears. Gas and electric arrears should be treated as a priority because you can get disconnected.

See our Energy debts guide for more information. If you now have energy arrears which you cannot afford to repay, contact us for advice.

If the energy bill was in the deceased person's sole name, any arrears should be paid by the estate. If there isn't enough money to do this, the money will no longer be owed.

If your name is not on the bill and the energy company tries to argue that you have benefited from the energy supply and so should pay the bill, contact us for advice.

What happens to water bills after death?

Tell the water company about the death as soon as you can. Most water companies will have an online form that you can complete. The form will ask for contact details, details of the deceased, whether water will continue to be used at the property and details of the executor.

Any joint occupier will also be responsible for the ongoing bill, the name(s) on the bill should be changed by the water company.

If there are any arrears, the joint occupier will also be responsible for these. Water arrears are a non-priority debt because the supply can't be disconnected if there is still someone living in the property. See our Water arrears guide for more information.

Any liable person would need to pay the on-going water bill and offer an affordable amount to any arrears. If you have been left with a water bill that you will struggle to pay, please contact us for advice.

If the water bill was in the deceased person's sole name, any arrears should be paid by the estate. If there isn't enough money to do this, the money will no longer be owed.

What happens to council tax after death?

Let the council know about the death as soon as you can.

If a rental property had been solely occupied by the person that has died, liability usually falls to the owner or leaseholder.

If the property was solely owned by the person that has died, it will be exempt from council tax payment as long as it remains unoccupied and until probate is granted. Once probate is granted a further six months’ exemption may be possible as long as the property remains unoccupied.

If the person who has died lived on their own, any arrears will be paid out of the estate. If there isn't enough money to do this, the money will no longer be owed.

A partner of the person who dies will be responsible for the ongoing bill, but can claim a 25% discount if they are the only adult in the house.

They will also be liable for any council tax arrears if they were living in the house, even if their name is not on the bill. If the person was not named on the bill, the council will have to send a new bill in their name before they can recover any outstanding council tax. Council tax arrears are a priority debt, the council will want the ongoing council tax paid plus an extra amount to clear the arrears. See our Council tax recovery guide for more information.

If you have council tax arrears that you will struggle to repay, please call us for advice.

What happens to benefit overpayments after death?

If someone who dies was claiming benefits, make sure that the Department for Work and Pensions (DWP) and the council know that they have passed away. This can be done through the 'Tell Us Once' service. See the earlier section Steps to take after someone dies .

Sometimes the DWP may say that they have paid the person who died too much benefit. This means there will be a debt called a benefit overpayment.

It is important to understand why the DWP or council say that a benefit overpayment has happened. Contact us for advice about whether their decision is correct.

If only the deceased person is liable, it can be recovered from the estate. If there isn't enough money to do this, the money will no longer be owed.

What happens to hire purchase agreements after death?

Hire purchase agreements are usually used to buy cars, but some shops sell household goods on hire purchase too. The goods do not belong to you until you make the final payment.

Check the agreement to see if it is a hire purchase agreement before returning the goods to the creditor and contact us for advice.

Check to see if there is an insurance policy that pays off the agreement if the person hiring the goods dies. If there is an insurance policy, the credit agreement may be paid off and the goods would then become part of the estate.

Dealing with a hire purchase agreement after someone dies can be complicated. Contact us for advice about finding the right type of help.

What happens to credit debts after death?

Only a person who has signed the credit agreement can be held liable for credit debts such as credit cards, overdrafts, unsecured loans and catalogues. Any money owed by the person who died can be recovered from their estate. If there is not enough money in the estate to clear the debts in full, see our Insolvent estate section earlier in the guide.

Let the lenders know about the death. You can use the Death Notification Service to notify several banks and building societies at the same time. Most major banks are part of the Death Notification Service. For more information on the Death Notification Service, see our Steps to take when somebody dies section earlier in the guide.

Many lenders also have an online form you can use and bereavement specialists who can help. The lender will also ask for a copy of the death certificate.

If the debts are in joint names or had a guarantor, the surviving person or guarantor will become solely liable for them. If you have debt which you are unable to repay, please contact us for advice.

Help with funeral costs and benefits

Funeral expenses

If the funeral has already been paid for, or money has been left in the estate to cover it, the executor of the estate will pay the funeral bill.

If there isn't money to do this then a friend or relative will usually pay for the funeral and claim the funeral costs back from the estate, if there is enough money in it. If the person who has died has other debts, reasonable funeral costs can be paid first.

Check with the executor of the estate before paying for a funeral to see if there is enough money in this estate to claim back. The amount of money in the estate may affect the amount you decide to spend on the funeral.

If you are arranging a funeral and you are on a low income, you may be able to get help through a Funeral Expenses Payment. How much you get depends on your circumstances. For more information and to claim go to GOV.UK.

If arranging a funeral is unaffordable, a Public Health Funeral may be arranged. The local authority will usually decide the time and place. Speak to your local council about this.

Benefits

Depending on your situation you may be able to claim extra income or reduce your outgoings.

• If your spouse or civil partner dies you may be able to claim bereavement support payment. The amount you get will depend on your situation; it's paid for 18 months following the death.
• If you have had a drop in income, you might be able to claim Universal Credit to help.
• If you are the only adult in the property, you may be able to claim a 25% discount on your council tax bill.

The Tell Us Once service can check whether you are able to get help with funeral costs and what benefits you may be able to claim. You can also do a full benefits review through Turn2us.

Useful contacts

Cruse Bereavement Care Phone: 0808 808 1677 www.cruse.org.uk/get-support/helpline

Death Notification Service Phone: 0333 2076574 www.deathnotificationservice.co.uk

GOV.UK For information about the steps to take after someone dies www.gov.uk/after-a-death

For information about dealing with someone's affairs after they have died. www.gov.uk/wills-probate-inheritance

HMRC bereavement helpline For help with tax after someone dies Phone: 0300 200 3300

HMRC Deceased estate helpline For specialist advice about income and capital gains tax on someone's estate. Phone: 0300 123 1072

Law Society Phone: 020 7320 5650 www.lawsociety.org.uk

MoneyHelper Phone: 0800 138 0555 www.moneyhelper.org.uk/en/family-and-care/death-and-bereavement

Shelter Phone 0808 800 4444 www.shelter.org.uk

Shelter Cymru Phone 08000 495 495 https://sheltercymru.org.uk/contact-us/

Turn2us www.turn2us.org.uk

Other guides which may help you

Council tax recovery

Energy debts

Rent arrears – England

Rent arrears for secure occupation contracts – Wales guide

Rent arrears for standard occupation contracts – Wales guide

Water arrears

A defence has to be a legal reason:

• why you do not owe all or part of the debt; or
• that should stop the creditor from taking court action against you.

If you think that you have a defence, contact us for advice.

Get advice

Putting in a defence can be very complicated. You are likely to need legal advice, and may face large costs if your defence is unsuccessful. If you are thinking about putting in a defence you should contact us for advice.

Use this guide to:

• see how to respond if you are sent a letter of claim;
• find out what to do if you receive a county court claim; and
• understand how to complete a county court claim form.

Rent or mortgage arrears

If the court action involves rent or mortgage arrears, there are special rules. These are not covered here. Contact us for advice.

Before court action starts

Under court rules called the pre-action protocol for debt claims, the court expects people to do all they can to avoid court action. It expects both you and the creditor to give each other a reasonable amount of information, so that each side can understand the other's position. It also expects you to try to reach an agreement to avoid court action if you can. If you are not sure that the creditor has acted properly, contact us for advice. See our Pre-action protocol in the County Court guide for more information.

Letter of claim

Before a creditor starts court action by sending you a court claim they should send you a 'letter of claim'. The letter of claim should:

• give details of the agreement or contract that the claim relates to;
• explain how they have calculated the amount they say you owe;
• let you know how to contact the creditor to talk about how to pay; and
• include an information sheet which tells you where you can get free, independent advice.

Court action should be a last resort. It may still be possible to negotiate a repayment arrangement with the creditor. Contact us for advice.

If you dispute all or part of the debt, the creditor should consider whether it may be appropriate to use a conciliation, arbitration or mediation scheme to help resolve the disagreement. These schemes are often called ‘alternative dispute resolution’ and can include raising the dispute with an ombudsman or trade body. Contact us for advice.

Replying to a letter of claim

You should receive a reply form included with the letter of claim. You need to send the completed reply form to the creditor within 30 days of the date at the top of the letter. The content of your reply will depend on whether you agree you owe the debt or want to dispute it.

Section 1 of the reply form allows you to say whether you owe all of the money, some of it, none of it, or that you don't know if you owe anything. You need to tick one of the four boxes in section 1 to let the creditor know how you want to reply.

If you cannot decide whether you agree you owe the debt or not, you may need more advice. In section 3 you can tell the creditor:

• if you are going to get advice, and from where;
• what you are getting advice about, for example whether you owe the debt; and
• when you expect to receive the advice.

If you are disputing some or all of the debt you need to explain why you don't think you owe the amount the creditor says you owe. You should try to clearly explain:

• the reasons why you do not accept that you owe the money;
• which parts of their letter you agree with and which parts you do not agree with;
• whether you intend to make your own claim against the creditor, or not;
• if you think the creditor is responsible for any part of the dispute and why;
• if you agree to the creditor's proposals on how to sort the dispute out without going to court;
• your suggestions for sorting the matter out, if you do not agree to the creditor's proposals;
• a list of any documents that you plan to use in your defence;
• the documents you are sending to the creditor (or why you cannot send them); and
• which other documents you want from the creditor.

If you ask the creditor to send you documents, the creditor should either send them, or explain why they are not available, within 30 days .

Interest and court costs

If the creditor sends you a letter of claim and you do nothing, in some situations they can ask the court to increase the total amount you have to pay back. The court does not have to do this and may not do so if you agree you owe the money. If the court agrees, it can add an extra amount of interest to the debt. The court can also order you to pay part, or all, of the creditor's court costs.

If the creditor does not send you a letter of claim before making a court claim, you can ask the court to reduce the total amount you owe. The court can do this by reducing the amount of interest you have to pay. Alternatively, the court may order the creditor to pay all or part of the costs of the case. Contact us for advice.

County court claims

If you don't agree with the amount of the debt the creditor says you owe and they make a county court claim against you, then you must either:

• fill in the defence form. In this case send the form back to the court within 14 days of the claim being served on you; 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 14 days of the claim being served on you. This gives you another 14 days after that to complete your defence and return it to the court.

‘Serving’ a document is a legal term that means it has been delivered in the correct way.

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 both to the court.

Even if you don't reply within 14 days , you should still send either the defence form or the 'acknowledgment of service' form if the judgment has not been made yet. This will stop the court from making a default judgment against you. See our Replying to a County Court claim guide for more information.

When court action starts

The creditor may consider starting court action 14 days after you have received their letter. Tell the creditor if you need more time to get advice. If your case is very complicated, the creditor may agree to give you up to three months before they consider taking court action.

Completing the defence form

A defence is a legal reason for:

• why you do not owe all or part of a debt; or
• why you do not think the creditor has the right to take court action against you for a debt you do owe.

When your creditor makes a county court claim against you, they should explain what they say you owe and why in the 'particulars of claim'.

When you complete the defence form, say which points in the particulars of claim you deny or dispute. Explain your reasons clearly. You may find it helpful to write out what you want to say first before completing the court form. You could write what you want to say in a list of separate bullet points. If you do not explain why you dispute a point that is in the creditor’s particulars of claim, the court may think that you agree with that point.

When you defend a claim in the County Court, there will be more paperwork to complete and a hearing may be arranged so that the court can make a decision on your case. If you lose, further costs can be added to your debt. If the claim is for £10,000 or less, these extra costs are usually less than in other cases.

Putting in a defence is complicated. You are likely to need legal help. We can help you to find advice that is suitable for you. Contact us for advice.

Emailing the court

You may be able to contact the court by email. Contact the court for advice.

Mediation

Mediation is a form of alternative dispute resolution (ADR) which involves both parties trying to resolve the dispute over money without the need for a court hearing. HM Courts & Tribunals Service (HMCTS) provide a service called the Small Claims Mediation Service, which you may be able to access if the claim you dispute is for less than £10,000 .

Depending on the process your creditor used to start a court claim, you may be expected to take part in the mediation process as part of the standard procedure.

You can find more information on the Small Claims Mediation Service on www.gov.uk.

Claims issued on or after 22 May 2024

If you reply with a defence to a money claim, your case will automatically be referred to the Small Claims Mediation Service if it meets the following criteria.

• The value of the claim is less than £10,000 .
• The claim is only for a specified sum of money.
• The claim is not for personal injury or relates to a road traffic accident.

If the claim was started before 5 November 2024 it will not be automatically referred to the Small Claims Mediation Service if it was started using the Online Civil Money Claims process.

If your case meets the criteria and your case is referred to the Small Claims Mediation Service you are expected to attend the mediation which is arranged by the court for you. If you do not attend mediation when required the court may apply a sanction, such as ordering you to pay additional costs.

Claims issued before 22 May 2024

If you replied to a money claim with a defence, you will only need to attend mediation if both you and the creditor agree to. This means that you cannot be forced to use mediation for a claim issued before 22 May 2024 .

Small Claims Mediation Service

If you need to take part in the mediation process, the mediator from the Small Claims Mediation Service will contact you to arrange a time and date for the mediation.

The mediator is not on anyone's side. It is their job to remain neutral and help you try to reach an agreed settlement. Mediation is usually done over the telephone, and the appointment can last up to one hour.

You do not have to agree to a settlement as part of the mediation process. However, you may decide that it is worth considering the proposal as it would mean that you do not need to attend a court hearing, or you may have a better understanding of the claimant's perspective after speaking with the mediator.

If the mediation is successful the court process will be stayed – this means paused. Depending on what you agreed as part of your settlement, the claim may be discontinued, or the claimant may be allowed to apply for a judgment for the outstanding sum of the settlement agreement.

If the mediation is unsuccessful the court process will continue in the usual way.

Your credit rating

If you are successful in making a defence against all of the money claimed the court will not make a CCJ against you. If you successfully defend part of the debt claimed, but you admit that you owe some of it, the court will make a CCJ against you. The CCJ will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on your credit reference file. The information will stay on your credit reference file and the Register of Judgments, Orders and Fines for six years from the date the CCJ was made, unless you pay the CCJ in full within one calendar month .

If you pay the CCJ in full after one calendar month , you can ask for your entry to be marked as 'satisfied' if you provide proof of payment, but the CCJ will still stay on your credit reference file. This is likely to affect your ability to get credit. See our Credit reference agencies guide for more information.

Defending a claim

If you attempt to defend the court claim but are unsuccessful in doing so the CCJ will not be registered unless:

• the court has ordered instalments to be paid; or
• the creditor takes steps to enforce the debt.

You should not defend a claim unless you have reasonable grounds to do this. If you have not got reasonable grounds and you are unsuccessful in defending the claim, you may end up having to pay additional costs. If you are thinking about defending a claim, contact us for advice.

If no CCJ has been registered you could try to negotiate an affordable payment plan directly with the creditor. This would prevent the CCJ from being registered unless the creditor applies for enforcement measures through the court.

Alternatively, you could apply to the court for a variation which is an instalment plan. If approved by the court this would prevent the creditor from being able to use any enforcement as long as you keep up with the payments, but the CCJ would be registered.

Other guides that may help you

Credit reference agencies guide

Pre-action protocol in the County Court guide

Replying to a County Court claim guide

However, the guide does not cover DWP overpayments of Universal Credit, New Style Jobseekers' Allowance (New Style JSA) or New Style Employment and Support Allowance (New Style ESA). If you have an overpayment of any of these, please see our Benefit overpayments under the Universal Credit System guide.

Use this guide to:

• understand why you may have a benefit overpayment;
• know how you may be able to appeal an incorrect benefit overpayment decision;
• see what options you have to deal with a benefit overpayment; and
• know how the overpayment may be recovered.

What are DWP benefit overpayments

A benefit overpayment is money owed as a result of being paid too much benefit. DWP legacy benefit overpayments will be owed to and collected by the Department for Work and Pensions (DWP).

Overpayments may occur for a variety of reasons, for example:

• the benefits office making a mistake;
• the information you gave may have been incorrect;
• you didn't inform the benefit office of a change in circumstance which would have meant your benefit would reduce or stop.

This guide does not give advice on overpayments of Universal Credit, New Style Jobseekers' Allowance (New Style JSA) or New Style Employment and Support Allowance (New Style ESA). If you have an overpayment of any of these, please see our Benefit overpayments under the Universal Credit System guide.

This guide does give advice on dealing with overpayments of most other DWP benefits. This will include, amongst others:

• Income Support;
• Jobseeker’s Allowance (JSA) (but not New Style JSA);
• Employment and Support Allowance (ESA) (but not New Style ESA);
• Carer’s Allowance;
• Personal Independence Payment (PIP); and
• Disability Living Allowance (DLA).

When should the overpayment be repaid?

The overpayment would need to be repaid if you misrepresented or did not disclose information, even if it wasn't your fault. You should not be asked to repay an overpayment caused by a DWP official error.

Knowing whether you were overpaid or not can be difficult to work out. If you do not have enough information to be sure that you were overpaid, you can ask for a written statement of the reasons for the overpayment. You must do this within one month of the overpayment decision. If you are still unsure if the money is owed, you should contact a benefit adviser to help you.

If you think you were entitled to the amount received, you can appeal the overpayment decision. See the Mandatory reconsideration section.

Mandatory reconsideration

You can appeal against a decision that you have been overpaid, or the amount of the overpayment by asking for a mandatory reconsideration, the request should be made within one month of being sent or given the decision. If you have requested a statement of reasons for the overpayment, the period of time you have to apply for a mandatory reconsideration will be extended to:

• one month and 14 days of the being sent or given the decision, if the statement is provided within one month : or
• 14 days of receiving the statement if it has not been provided within a one month period.

You can send a mandatory reconsideration request form from the GOV.UK website to the address on the decision letter. This can also be done for late applications.

After making a mandatory reconsideration request, you will receive a mandatory reconsideration notice which will tell you the outcome. If you believe the decision the DWP has made is incorrect, you can appeal to the First-tier tribunal. See the First-tier tribunal section below.

The DWP will usually continue trying to collect the debt during the mandatory reconsideration process.

Late mandatory reconsideration requests

If you are outside the one month application period, you can still apply for a mandatory reconsideration within 13 months of being notified about the decision. You need to show that there were special circumstances which meant you couldn't apply in time.

If a late request within 13 months is refused, it will still count as a mandatory reconsideration request so you can then appeal to the First-tier tribunal (see First-tier tribunal section below).

If it has been more than 13 months , you'll need to show that the DWP have made a mistake to be able to apply for a mandatory reconsideration. This could be that they got the law wrong or overlooked some evidence you may have sent them. This is called a 'specific grounds revision’. You should speak to a benefits adviser to make sure you have grounds to make a request after 13 months.

If a late request after 13 months is refused, the DWP may say that it hasn't counted as a mandatory reconsideration request and so you have no right to appeal to the First-tier tribunal. You may consider writing to the First-Tier tribunal to argue that the DWP has considered the mandatory reconsideration request and so you are able to appeal. You should contact a benefits adviser if you are considering this.

First-Tier Tribunal

If you believe the decision the DWP has made is incorrect, you can appeal to the first-tier tribunal. You must be able to evidence to the first-tier tribunal that the DWP have considered you mandatory reconsideration application. Send a copy of the mandatory reconsideration notice to the tribunal when you appeal.

If you have not received a mandatory reconsideration notice, remind the DWP that this needs to be done even if they believe your claim is not valid. If you are still unable to obtain a mandatory reconsideration notice, you could still consider appealing to the First-tier tribunal, but you would need to provide evidence that an application was made. The tribunal will decide whether the evidence is sufficient for them to consider your case.

Also supply any documents that support your appeal that have not already been supplied to the DWP, and a summary of why you think the DWP decision is wrong.

• You can request to attend the hearing when you make the application if you wish.
• The Tribunal must deal with the case fairly and justly.
• The Tribunal can ask you or the DWP for further information to help them make a decision. It is important to respond to any request or your appeal could be struck out.
• You can have a representative who can help present your case to the Tribunal. You'd need to give the Tribunal written notice of this at least 14 days before the hearing.

Time limits

You must make the appeal no later than one month after the date you have been sent the mandatory reconsideration notice.

Applications after one month can still be treated as being in time if neither the DWP nor anyone who has been added to the appeal objects. It is not common for the DWP to object, so it is worth making an application even if late. Explain why your application is late when you apply.

Decision notice

You will receive a decision notice; this will detail the tribunals decision and the reasons for it. If you have won, the DWP should carry out the Tribunal's instructions straight away.

If you lose, you may be able consider a set aside on procedural grounds but only if it is in the interests of justice to do so. You may also be able appeal to the Upper Tribunal. You'd need to be able to show that there has been an error of law. Speak to a benefit adviser before considering either option.

More information on the First-tier tribunal process can be found on the GOV.UK website.

Fraud and civil penalty

The DWP may say you have committed fraud if you failed to disclose a material fact or deliberately misrepresented information. If you are accused of fraud, you should seek legal advice as soon as possible.

You should have a formal interview 'under caution' and will be given around two weeks' notice. Use this time to try and find someone, preferably a solicitor, to sit in the interview with you.

The DWP may ask for additional information, it is important that you provide this or your benefit payments may be stopped. Your benefit may also be stopped whilst the investigation takes place.

If you are found guilty of fraud, you may be prosecuted. Again, if it looks like this may happen it is important to get legal advice on your options.

If you haven't committed fraud but the overpayment has been caused because you gave an incorrect statement or incorrect information and did not try to correct the error, you may receive a civil penalty. The overpayment will also need have occurred after 1 October 2012 and be more than £65.

The penalty would be added to the amount owed and recovered in the same way.

DWP discretion to suspend or reduce repayments

The DWP can agree to suspend recovery or reduce your repayment amount. However, this will usually only be done if you can show that the rate of recovery will cause you or your family hardship.

This hardship could be based on:

• Welfare grounds;
• Health grounds; or
• Financial grounds.

You can use our sample letter to ask the DWP to suspend recovery or reduce the repayment amount. You'll need to provide as much information as possible to support your request. For welfare or health considerations, this could include:

• a letter showing exactly how recovery of the debt would have a very negative impact on the welfare of you and your family; and
• a letter from a medical professional showing that your ill health is being made worse or caused by financial hardship. For example, a GP, consultant, psychiatric nurse, support worker or welfare advisor might write a letter for you.

For financial considerations, this could include:

• a copy of your budget sheet to show that the deduction amount is causing you financial hardship; and
• specific examples in the letter that show the difficulties the deductions are causing. This could be that you are having to cut back or are unable to afford essentials such as energy or food. It could be that you are unable to pay your rent in full and could be at risk of eviction. Try to give as much detail as you can.

You can make an initial request through your UC journal if you have one or write to the address on the letter you’ve received. It may be useful to find a specialist benefits adviser who can help. You can try find one on the Turn2us Find an Adviser tool.

If a suspension or reduction is not agreed, you do not have the right to appeal. However, if you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help further. You could also look to complain to the DWP. See the Complaint section for more information.

DWP discretion to waiver (write off)

The DWP can agree to waiver (write off) the overpayment. However this will usually only be done in exceptional circumstances where recovery action will result in severe welfare issues for you or your family.

The DWP will also look into the circumstances of the overpayment. It may be in your favour if the overpayment was the result of a DWP error rather than your failure to disclose information or your misrepresentation of any information.

It would normally be expected that the recovery of the debt is causing either financial hardship or welfare issues for you or your family.

The DWP should consider:

• your financial circumstances and those of your household;
• whether the recovery of the debt is impacting your health or that of your family;
• whether you can demonstrate that you did not benefit from the money that was paid; and
• any other factor which appears relevant to the decision maker, or which indicates recovery would not be in the public interest.

You can use our sample letter to ask the DWP to waiver your debt. You'll need to provide as much information as possible to support your request. This should include.

• Any evidence that the overpayment was not caused by you and any steps you took to prevent the overpayment. This may include details of information you provided to the DWP and when.
• A list of all your debts and the steps taken to manage these.
• Full details of your income and expenditure.
• Bank statement for the last six months.
• Evidence of exactly how recovery of the debt would have an excessive negative impact on the welfare of you and your family.
• Evidence that your ill health is being made worse or caused by financial hardship in the form of a letter from a medical professional. For example, a GP, consultant, psychiatric nurse, support worker or welfare advisor.

You can make an initial request through your UC journal if you have one, or write to the address on the letter you’ve received. It may be useful to find a specialist benefits adviser who can help. You can try find one on the Turn2us Find an Adviser tool.

If a waiver is not agreed, you do not have the right to appeal. However, if you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help further. You could also look to complain to the DWP. See the Complaint section below for more information.

Complaint

If you are unhappy about the service you have received from the DWP, you can use the DWP’s complaint procedure. Contact the office that dealt with the decision and make the complaint. You can find relevant details to contact on the GOV.UK website.

This should be dealt with within 15 working days . If you unhappy about the outcome, ask that the complaint is passed to a senior DWP manager. This should be dealt with within 15 working days.

If you are still unhappy after the internal process, you can escalate their issue to the Independent Case Examiner within 6 months. This can be done by phone on 0800 414 8529 or by writing to: The Independent Case Examiner, PO Box 209, Bootle L20 7WA.

If you are still unhappy, you could ask your MP to refer their case to the Parliamentary and Health Service Ombudsman.

The Parliamentary and Health Service Ombudsman deals with complaints about maladministration and delays by the DWP. You can begin a complaint by completing the online form and sending this to your MP. You need to do this within one year of becoming aware of the matter.

Recovery

If you claim Universal Credit

If you now receive Universal Credit rather than legacy benefits, the debt can be recovered as though it is a Universal Credit overpayment. See the Recovery section of our Universal Credit overpayment overpayment guide.

Deduction from benefits (other than Universal Credit)

Overpayments can be recovered from most benefits. There are some exceptions.

• Child benefit and guardian's allowance cannot have deductions for overpayments, other than overpayments of child benefit or guardian's allowance.
• No deductions can be made from Housing Benefit, except for Housing Benefit and Council Tax support overpayments.

The maximum deduction from Income Support, Income based Jobseekers Allowance, Income based Employment and Support Allowance and Pension Credit is:

• £13.95 per week; or
• £37.20 per week (if you agreed to pay a penalty or committed fraud).

The maximum deduction from New Style Job Seekers Allowance or New Style Employment Support Allowance is 40% of the aged-related amount. This will be:

• £36.82 per week if aged 25 or over; or
• £29.16 per week if aged under 25.

The amount taken may increase if you have part-time earnings, income from charitable payments or a war pension.

There is no maximum deduction for the recovery of benefit overpayments through other benefits. The DWP will usually want to deduct one third of your weekly benefit. There are separate rules for clients in receipt of Universal Credit, See the Recovery section our Universal Credit overpayment overpayment guide.

You can find more detail on all deduction amounts in Appendix 2 of the DWP's guidance on overpayment recovery.

Direct earning attachment

Overpayments can also be recovered from your wage via a direct earnings attachment.

You and your employer will be sent a notice setting out how much will be deducted. The deduction will be a % of your net income (after tax and deductions). You can find the amount you should have deducted and more information on the GOV.UK website.

If the amount being recovered is causing financial difficulty, you should use your budget sheet to support asking for the amount to be reduced. The DWP benefit overpayment recovery guide states that a reduced payment can be considered if it is causing you hardship.

You should not be left with less than 60% of your net earnings. This is called the protected earnings proportion. If you are being left with less than this, send a written request to your employer asking how the deduction has been calculated. Your employer should provide the information within 28 days.

Court Action

Whilst not common, the DWP can look to take you to court to obtain a county court judgment (CCJ). This would usually only be done if you are no longer claiming benefits and you cannot agree a repayment plan.

See our Replying to a County Court Claim guide.

Limitation England and Wales

If a debt is barred under statute, it means that by law (the Limitation Act 1980), the lender has run out of time to use court action to try and make you pay the debt.

For benefit overpayments, time starts to run from the date a final decision was made to recover the debt. Once the limitation period is running, the debt will normally be statute barred if:

• the DWP has not already started a county court claim for the debt; and
• you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years ; and
• you or anyone else owing the money (if your debt is in joint names) have not written to the DWP admitting you owe the debt during the last six years .

However, it will still be possible to recover the overpayment from benefits or wages as the DWP do not have to go through the court to do this.

Useful contacts

GOV.UK for information on finding legal advice www.gov.uk/find-legal-advice

Independant Case Examiner Phone 0800 414 8529 www.gov.uk/government/organisations/independent-case-examiner

The Parliamentary and Health Service Ombudsman Phone 0345 015 4033 www.ombudsman.org

Turn2us for information on finding a benefits adviser https://advicefinder.turn2us.org.uk/

Universal Credit helpline Phone 0800 328 5644

Other guides which may help you

Breathing space guide

Replying to a County Court Claim

• learn what equity release means and how it can help you;
• understand the main advantages and disadvantages of different types of equity release schemes;
• find out about alternative options to equity release; and
• find out where to go for further advice before agreeing to an equity release scheme.

What is equity release?

If you live in mortgaged property, the equity in it is the difference between the value of your home and the total of the mortgage and any loans that you have secured on it. Equity release is an agreement that lets you access money from this equity without having to leave your home. You usually need to be at least 55 years old. You may be able to take the money that you release as a lump sum or regular smaller payments, or both.

Get professional advice before entering into an equity release scheme. It is very important that you fully understand the terms and conditions before entering into any new agreement. Later in this guide, we explain where you can get professional advice.

How equity release can help

Equity release can be helpful if you want to repay an existing mortgage, increase your income or pay for care needs.

You may also choose to use equity release to help you pay debts that you owe. Equity release can help you in different ways, but always contact us for advice before choosing this option. We can help you to understand the advantages and disadvantages before you decide what to do.

• It can ease pressure on you if your creditors are chasing you for payment.
• It may help to stop creditors taking legal action against you.
• If you can't pay off all your debts, you could reduce them so that you can manage payments more easily, or ask your lenders to write off the rest.
• It can help you to get out of debt if you have a low income or no money available.

How can I use the money I get from equity release?

You may have a lot of different creditors asking you for money. Some may put more pressure on you than others. However, this doesn't always mean that you should pay those creditors first. Before you decide what to do with your money, it is important to understand the powers that different creditors have.

Priority creditors have the most power. If you do not pay what you owe, you may lose an essential service or an essential item. For example, if you do not pay your mortgage, you could lose your home. If you do not pay your gas or electricity,your supply could be cut off. If you do not pay your council tax, councils in England could apply to send you to prison as a last resort.

Non-priority creditors cannot immediately take away an essential service or an essential item if you do not pay them. These creditors are more limited in what they can do to collect what you owe. Credit cards, unsecured loans, store cardsand unsecured overdrafts are examples of non-priority debts.

• When you decide how to use the money you have raised by releasing equity, you may wish to put some money aside to pay for your essential living costs. Also, you could choose to clear priority debts first.
• We usually recommend treating non-priority creditors fairly. For example, if you have a lump sum of money and want to use it to reduce your non-priority debts, we suggest dividing your money between your creditors on a pro-rata basis. This means that your biggest debt gets the largest share of the available money. Contact us for advice on how to work out pro-rata payments.
• You could make full and final settlement offers to all of your non-priority creditors. This means offering each creditor a fair share of your available money and asking them to write off the rest. There are important things to consider when making full and final settlement offers. For more information, see our Full and final settlement offers guide.
• You could consider an individual voluntary arrangement (IVA). This is a legally binding agreement with your creditors to pay part of your debts back. IVAs are often based on making regular payments over an agreed period. However, you may also set up an IVA based on selling or using your assets to raise a lump sum. Creditors vote on whether to agree to the arrangement. There are rules about how many creditors have to agree in order for the arrangement to be set up. There are also fees to pay to the person who sets up the arrangement for you. It is important to understand the advantages and disadvantages of an IVA before choosing this option. For more information, see our Individual voluntary arrangements guide.
• There may be some limited circumstances where you choose to clear certain non-priority debts before others. For example, some non-priority creditors may threaten to take legal action against you to recover what they say you owe. Just because creditors threaten this, doesn't mean it will happen. Some creditors threaten to take further action but don't carry it out. However, some aggressive creditors could take court action against you quickly. If legal action will have serious consequences for you, you could reduce or clear these debts first. If you are considering doing this, contact us for advice.
• Some creditors may be charging interest at a much higher rate than others. This may mean that those debts are increasing much more quickly. In this situation, you could choose to use your money to reduce or clear these debts first. This may help you to manage your remaining debts.

How does equity release affect benefits?

If you use the money you raise from equity release to clear debts, it can affect your benefit entitlement.

• If you already claim benefits, you must tell the Department for Work and Pensions (DWP) or council about the money you receive from equity release. This can affect how much you are entitled to. Be careful, because you may still be treated as having the money, even after using it to clear debts. Contact us for advice if you are concerned about your benefits being affected.
• If you claim benefits after using your money to clear debts, you may still be treated as having the money for the purpose of working out how much benefit you are entitled to. This is a complicated area. Contact us for advice.

How does equity release affect tax?

You will not usually need to pay tax on the equity released from your main home. However, in some situations, you may need to check how releasing equity affects your tax position. We can suggest ways of finding the right type of professional tax advice. Contact us for advice.

Different equity release schemes

There are two main types of equity release schemes.

• Lifetime mortgages
• Home reversion

Lifetime mortgages and home reversion schemes work differently. Which is suitable for you will depend on your circumstances and what you want to achieve.

Lifetime mortgages

A lifetime mortgage can give you funds in a single lump sum or in smaller amounts over time. You will agree the maximum amount of money that you can borrow with the scheme provider. If you take out a lifetime mortgage, you will still be the owner of your home. The lifetime mortgage will carry interest. You can choose to either make repayments or let the interest build up. The loan and any interest will be paid back either when you die or move into long-term care.

Home reversion

Under this scheme, you can sell all or part of your home to a home reversion company. They then give you a lump sum of money or regular monthly payments. You can continue living in the property until you die. You do not have to pay any rent.

Rules about equity release

Lifetime mortgages and home reversion schemes are regulated by the Financial Conduct Authority (FCA).  This means that firms which offer either type of scheme must follow the FCA’s rules about equity release. The FCA’s rules say that equity release firms must take reasonable steps to make sure that any equity release products they recommend to you are suitable for you. Also, when the firm considers whether equity release is suitable for you, they should take into account how it will affect any benefits you receive and your tax position.

Equity Release Council

The Equity Release Council (ERC) is a not-for-profit organisation that represents different types of firms involved in equity release. This includes lenders, qualified financial advisers, solicitors and other industry professionals. They aim to provide you with information and protection if you are considering entering into an equity release scheme. They provide guidance to their members about how entering into an equity release scheme should work.

Firms which advise on and provide equity release schemes and who are ERC members should all follow the FCA’s rules about equity release. They should also follow further rules and guidelines that the ERC has set out. By using a firm that is an ERC member, you will have further safeguards to help make sure that equity release is a realistic option for you.

You can search for an ERC member using the Find a Member directory on the ERC's website.

Equity Release Council product standards

The ERC has certain standards that they recommend equity release products should meet. ERC members should only say that a product they are offering meets these standards if it meets all of them. Check whether any equity release product that you are considering meets all of the ERC’s standards.

• For lifetime mortgages, interest rates must be either fixed or, if they are variable, there must be a maximum interest rate for as long as the scheme lasts.
• You must have the right to stay in your home for the rest of your life or until you move into long-term care. This applies only if your property remains you main home and you keep to the terms of the contract.
• You are allowed to move to another property as long as your equity release firm agrees that the new property is suitable as security for your equity release loan.
• When your property is sold, neither you nor your estate will have to pay anything else if the money raised is not enough to clear the loan to your equity release provider. 
• ERC members must make sure that you have received independent legal advice before you enter into an equity release scheme. Check that any solicitor you get advice from is an ERC member. Members are committed to the ERC’s  standards and principles.
• If you take out a new plan with an ERC member, they must not charge you a penalty for making a loan repayment that is allowed under the terms of the agreement. Making partial repayments can save on interest costs. You may need independent financial advice if you are thinking about making repayments on your loan. You can find an independent financial adviser on the MoneyHelper website.

Before you enter into an equity release plan, you should be given a clear and accurate explanation of what your equity release plan involves. The advantages and limitations of your plan should be clearly explained, together with the terms and conditions. You should be given information about:

• all the costs involved in setting up the plan;
• what will happen if you want to move to another property;
• how the plan affects your tax; and
• how changing house prices may affect you.

When you get independent legal advice, check that you understand:

• what the scheme involves;
• the costs to you; and
• the disadvantages involved, as well as the advantages.

The ERC’s rules and guidance give more information about how ERC members should operate. See the ERC’s website www.equityreleasecouncil.com.

Fees charged

Different fees are likely to be charged when you enter into an equity release agreement.  

• A fee to have your property surveyed. You usually have to pay this when you apply. The amount of this fee depends on the estimated value of your home.
• Application fee. You need to pay this when your equity release transaction goes through. You may be able to pay for it by borrowing a bit extra under your equity release plan.
• Legal fee. You need to pay this to your solicitor for the work they do for you in dealing with the legal side of the scheme. 
• Advice fee. Your financial adviser may charge you a fee for the advice they give to you. Some advisers may not charge you for the advice they give. Instead, they may get some commission from the lender that you take out an equity release plan with.

Check what fees you will be charged before agreeing to anything related to an equity release scheme.

Advantages of equity release

• It can give you a cash lump sum or regular monthly payments. This can help with regular bills, home improvements, care costs and so on.
• You can usually stay in your property for as long as you need to.
• You may be able to move, as long as the new property is acceptable to the equity release firm.
• You can set aside part of your property value as an inheritance for your family members.
• You do not have to pay rent to the equity release provider.
• For lifetime mortgages, you may be able to choose whether to pay back interest or let it build up.
• The loan is only paid back when you die or when your property is sold.
• For some lifetime mortgages, interest rates are either fixed or can’t rise above a set level.
• For some equity release schemes, there is a guarantee that the total amount you owe cannot be greater than the value of your property.
• You will not have to pay tax on the equity released from your main home.

Disadvantages of equity release

• Your equity immediately becomes less.
• You may only be able to leave a smaller inheritance to other people when you die.
• A lifetime mortgage means that you are securing further borrowing against your home.
• For home reversion schemes, home reversion companies will usually pay a lot less than the full market value of their share of your property. Also, you will no longer be the sole owner.
• If you die or sell your home shortly after taking out an equity release scheme, you could lose money. There may also be early repayment charges if you decide to repay what you owe within a short time after taking out the deal.
• If house prices fall, you may owe a greater percentage of your home’s value.
• With a lifetime mortgage, if you live long enough, you could end up owing 100% of your property’s value.
• The money you get from equity release could affect the amount of benefits you are entitled to.
• You may need the provider’s permission for someone else to move in, such as a relative or carer.
• You usually need to get your provider’s permission to move to another property.
• You usually have to pay costs for arranging the transaction, for your property to be valued and for legal fees.
• You will still be responsible for paying all the usual bills, such as council tax, gas and electricity. You may also need to pay for buildings insurance.
• You will usually be responsible for repairs and maintenance. So you may need to regularly set aside some money for this.

Get further advice before agreeing to equity release

Independent financial advice

It is very important that you get impartial financial advice about the advantages and disadvantages of an equity release scheme. Before agreeing to use an independent financial adviser, check what their fees will be and when these need to be paid.

Search the ERC’s website to check that the financial adviser you are using is a member of the Equity Release Council. See Useful contacts.

You can also contact The Society of Later Life Advisers. They are a not-for-profit organisation. Their members are financial advisers who are trained to give financial advice about matters that affect you in later life. See Useful contacts.

Complaints

If you have a complaint about a financial adviser or an equity release provider, ask for a copy of their complaints procedure. If you have followed their complaints procedure and are unhappy with their response, or if your complaint has not been resolved after eight weeks, contact the Financial Ombudsman Service. See Useful contacts.

Independent legal advice

You can search for legal advice by using the Law Society’s website. See Useful contacts.

Also check that your legal adviser is a member of the Equity Release Council. See Useful contacts.

Before agreeing to use a solicitor, check what their fees will be and when these need to be paid.

Complaints

If you have a complaint about a solicitor, ask for a copy of their complaints procedure. If you have followed their complaints procedure and are unhappy with their response, contact the Legal Ombudsman. See Useful contacts.

Alternative options

You may wish to consider alternative ways of raising funds, rather than choosing an equity release scheme.

Unsecured borrowing

If you only want to borrow a small amount and you can meet the repayments out of your usual income, an unsecured loan may be cheaper than an equity release scheme.

Shop around to see what types of products are available.

Search for an independent financial adviser by using the FCA register. See Useful contacts. Some advisers will offer a free first interview. Some may not charge you a fee, but instead charge the lender a fee if you take out a particular loan with that lender.

Extend your mortgage

If you haven’t yet paid off your current mortgage, your lender may agree to extend your mortgage and release you some more money. Whether your lender will do this depends on their policy, your age and circumstances.

Always seek independent financial advice. Search the FCA register to find a suitable adviser. See Useful contacts.

Move to a cheaper property

You may wish to consider selling your house and moving to a cheaper property. This would enable you to release money from your home and still be the owner of your new property. However, you would have to pay for legal fees for a solicitor, estate agent’s fees, removal costs and possibly stamp duty.

Benefits and grants

You may be on a low income and need money for home improvements or to adapt your home to make it suitable for a disability. You may be able to get a grant from your local authority. Contact us for advice.

Useful contacts

Equity Release Council Not-for-profit industry body for different types of firms involved in equity release. Phone: 0300 012 0239 www.equityreleasecouncil.com

Financial Conduct Authority (FCA) register The Financial Services Register is a public record that shows details of firms, individuals and other bodies that are, or have been, regulated by the FCA. register.fca.org.uk

Financial Ombudsman Service Helps to resolve individual complaints between financial businesses and their customers. Phone: 0800 023 4567 www.financial-ombudsman.org.uk

Law Society The independent professional body for solicitors. You can visit their website and search for a solicitor near to you. www.lawsociety.org.uk 

Legal Ombudsman Helps to resolves complaints about the service you have received from your solicitor. Phone: 0300 555 0333 www.legalombudsman.org.uk

Society of Later Life Advisers Membership organisation for financial advisers who are trained to provide advice on later life issues. Phone: 0333 2020 454 www.societyoflaterlifeadvisers.co.uk

Other guides that may help you

Full and final settlement offers guide

Individual voluntary arrangements guide

Ways to clear your debt guide

Use this guide to:

• understand how your credit reference file will be affected;
• work out suitable offers to your creditors; and
• help you to write a letter making the offer.

This guide includes an example calculation to show you how to work out your own offers.

The sample letters mentioned in this guide can be filled in on our website.

Full and final settlement offers

Full and final settlement means that you ask your creditors to let you pay a lump sum instead of the full balance you owe on the debt. In return for having a lump-sum payment, the creditor agrees to write off the rest of the debt.

You may be able to do this because you have come into some money or have some savings you can use. Sometimes a friend or relative offers to put forward a lump sum to help you pay off the creditors. If your circumstances are unlikely to change for the better in the future, you can explain why this is. It is also very important that you explain to the creditors that the money will not be available forever and the friend or relative will not make the payments unless the offer is accepted.

Do you have priority debts?

Priority creditors have stronger powers to get their money back than non-priority creditors. It is unlikely that a priority creditor will agree to a full and final settlement offer. You should make arrangements with priority debts separately to your non-priority debts.

You will usually need to use some, or all, of the lump sum you have to clear your priority debt first. Examples where you should clear your priority debts first include having:

• rent or mortgage arrears and your landlord/lender is threatening eviction action;
• council tax arrears; or
• gas or electric arrears and your supplier has threatened to install a prepayment meter or to disconnect you.

There may be some situations where you don't have pay off all your priority debts first, but you need to be careful. If you are thinking about settling non-priority debts before you have repaid your priority debts, contact us for advice.

If you are thinking of applying for a DRO or bankruptcy, it may not always be a good idea to repay only some of your debts first, contact us for advice.

Do you have a deficit budget sheet?

A deficit budget means not having enough money to pay for all your essentials, such as your home, food and travel to work. See our Cost of living: if you can't afford your essential costs page for advice on completing a budget sheet and what you can do if you have a deficit budget sheet.

If you have a deficit budget sheet, you need to think carefully about whether you can afford to use your lump sum to make full and final offers.

• If the deficit is fairly small and you are able to take steps to balance your budget sheet, then a full and final settlement may still be a good solution.
• If the deficit is large, it would be better to use your lump sum to help balance your budget sheet. This will stop you falling behind on payments to your priority creditors.

If you do need to use your lump sum to balance your budget sheet now but your situation improves in the future, you can consider using the remaining lump sum to make full and final offers to your non priority debts.

Preferential payments

You need to be careful about what you do next if not all of your creditors agree to a full and final settlement offer. Think about whether other debt solutions may be better before you make a payment.

If you pay the creditors that have agreed to your full and final offer but you are still left with a large amount of debt because others haven't, you may need to consider another debt solution.

If you decide to use an insolvency solution, such as a debt relief order (DRO), individual voluntary arrangement (IVA) or bankruptcy, any previous payments you have made to creditors will be looked at. If you have made full and final payments to only some of your creditors, it may be argued that this is a preferential payment and you have not dealt with your debts fairly.

If you apply for a DRO, it is possible that the DRO application will be refused or you may receive a debt relief restrictions order. See our Debt relief orders guide for more information.

If you were to apply for an IVA, it may affect whether a creditor agrees to the IVA proposal that would be put forward. See our Individual voluntary arrangements (IVA) guide for more information.

If you were to go bankrupt, it may be possible for the official receiver who handles the bankruptcy to reverse the full and final payment that you made and you may also receive a bankruptcy restriction order. See our Bankruptcy guide for more information.

If a friend or relative agrees and pays the settlement for you using their own money, this would not normally be classed as a preferential payment

If you are worried that a payment you are going to make could be a preferential payment, or think that a payment you have already made was preferential and want to apply for insolvency, contact us for advice.

Making an offer

• You can use the sample letter Full and final settlement offer to make full and final offers to your creditors.
• It is very important to make sure the creditor accepts your full and final settlement offer in writing. Make sure you keep a copy in case there is a dispute. This could happen years later and you may need the letter as proof.
• Never send a lump-sum payment before the offer is accepted.
• A friend or relative may be able to give you the money and make the payment. It helps your agreement to be more legally binding if the creditor accepts the money from a third party.
• If you are settling a debt that is large or particularly important, you could have a formal agreement drawn up by a solicitor and signed by you and the creditor. This is not normally necessary.
• Make sure you keep copies of any letters you send and receive.

Credit reference file

Make sure the creditor agrees in writing to change your credit reference file details to show that the balance has been paid and the date this happened.

• Check this has been done by asking the credit reference agencies for a copy of your credit file.
• You can expect to see your account showing as having been closed.
• Your balance should change to 'zero' to show that there is no more money due.
• Credit reference agencies may mark the account with a 'P flag' for 'partial settlement' which means that you have made a part-payment and not paid the balance in full.

See our Credit reference agencies guide for more information.

Should I use my pension?

Since April 2015 , if you are 55 or over, you may be able to take money from your pension fund to pay your debts. Creditors should not pressurise you to do this. Taking money from your pension fund early can have a big effect on your financial future. You may also have to pay tax on some of the money that you take. Your entitlement to benefits could change, both now and in the future.

If you are thinking about taking money from your pension, contact us for advice.

How to work out offers

Creditors must treat you fairly

The Financial Conduct Authority (FCA) has issued rules and guidance in its Consumer Credit sourcebook (CONC) about settlement offers.

The FCA says:

” If a firm accepts a customer’s offer to settle a debt, it must communicate formally and unequivocally that the offer accompanied by the relevant payment has been accepted as settlement of the customer’s liability.” Consumer Credit sourcebook (CONC) 7.14.14

You may have a lump sum that you need to divide up amongst several creditors. The usual way of doing this is to make 'pro-rata' offers.

This means that each creditor gets a fair share of the money you have available. The creditor you owe the most to will get the biggest share of the money and the creditor you owe the least to will get the smallest share.

• Find out the exact balance you owe to each creditor.
• Use the formula to work out how much to offer to each creditor.
• Use the example later in this guide to help you.
• Send the offers to all your creditors along with a table setting out how you have worked the offers out. It is helpful if creditors can see that they are all receiving an offer of a pro-rata settlement; then they know they are all being treated fairly.
• If some of the creditors refuse, then write to them again and ask them to reconsider. Tell them if any of your other creditors have accepted the offer and explain your circumstances again. If your creditors still refuse, contact us for advice to see what other options you may have.

Formula
Lump sum available x each debt
÷ the total amount you owe to your creditors
= offer to the creditor

Example

You may have £10,000 owing to four creditors. You can raise a lump sum of £4,000.

You owe:

£2,300 to Mastercard

£1,200 to a catalogue company

£4,500 to a loan company

£2,000 to the bank

Use the formula

• £4,000 (lump sum available) X £2,300 (debt to Mastercard)
• ÷ £10,000 (the total amount you owe to your creditors)
• = £920 (offer to Mastercard)

Your offer to Mastercard is £920. You then do the same calculation for each creditor, using each individual debt in the calculation.

Your offers to your creditors should look something like the following table.

Offers to creditors based on a full and final settlement of £4,000

Other guides that may help you

Bankruptcy guide

Credit reference agencies guide

Debt relief orders guide

Individual voluntary arrangements guide

• help you to deal with energy debt;
• understand how you may lower ongoing energy bills; and
• help you to complain if you have a problem with your supplier.

The sample letters mentioned in this guide can be filled in on our website.

Check your bill

If you have received a high bill, there are some key things you can do to check that the bill has been worked out correctly.

Check if the bill is based on actual meter readings

Your bill should clearly state if it has been calculated using actual meter readings or estimated meter readings. For information on how to understand your bill, check your supplier’s website or see the Centre for Sustainable Energy guide on Understanding your gas or electricity bill.

A bill based on an estimated reading may be wrong if the estimate is not accurate. If you are able to read your gas and electricity meters yourself, take your own meter reading. You can then compare the reading to your supplier's estimate.

Contact your supplier to provide your meter reading if the supplier's estimate is not right. Your supplier's contact details will be on your bill. Providing an actual reading will make your bill more accurate. Bear in mind that if your reading is higher than your supplier's estimate, you are likely to end up with a bigger bill by updating your reading in this way.

It is good practice to keep your energy bills as accurate as possible by regularly taking meter readings and sending them to your supplier.

For information on how to read your meter, visit the Citizens Advice webpage How to read your gas or electricity meter.

If you are not able to physically take a meter reading, your supplier may be able to offer you extra help. See the Priority Services Register information in the later section Contact your supplier.

Smart meters and estimated bills

Smart meters automatically send meter readings to your energy supplier. Due to changes in the systems used to send the meter readings, some older smart meters may temporarily stop sending meter readings. If your smart meter is affected, you should send regular meter readings to your supplier during the period that your meter is not sending the readings.

Check if you are responsible for the bill

Check the period that you have been billed for and whether you should be held responsible for the whole bill.

You will usually be responsible if:

• you have agreed a contract with a supplier; or
• nobody has agreed a contract with a supplier but you have been supplied with gas or electricity.

You might not be liable for some of the bill if it includes a period where somebody else had a contract with the supplier. Some examples of when this may have happened are:

• if a bill includes a period before you moved in;
• you moved in with somebody that already had a contract with the supplier; or
• you lived with somebody that had a contract with the supplier but they have now moved out.

Tell your supplier if you do not believe that you should be held responsible for the whole bill and request that they correct it. If your supplier does not agree to do this, you should make a complaint. See the later section Complaining about your energy supplier.

Check how long your supplier has billed you for

If your supplier has not sent you a bill in a long time, they have to follow rules on what period they can charge you for. These are known as 'back billing rules'. Usually, your supplier should not charge you for energy used more than 12 months ago if:

• they have not previously sent you an accurate bill for the same period;
• they have not informed you about the charges in a statement of account; or
• your direct debit was set too low to cover the charges.

Let your supplier know if the back billing rules mean they should not have charged you for more than 12 months' usage. You can make a complaint about your supplier if they refuse to amend your bill. For more information, visit the Ofgem webpage What to do if you get a back bill.

Check your direct debit

Gas and electricity suppliers usually set a direct debit at a rate to cover your estimated energy use for a whole year. If you pay by direct debit, you can ask your supplier for an explanation of how your payment has been worked out. Your supplier may be able to reduce the payment if:

• it is currently based on an estimate which is higher than accurate meter readings suggest you really use in a year; or
• it includes an amount to repay a debt to your supplier.

If you are repaying a debt, you can ask for the debt repayment to be lowered if the current rate is not affordable for you. Your supplier should take your ability to pay into account when setting debt repayment rates. See the later section Make an arrangement to pay your debt.

If your supplier refuses to lower your direct debit when you think that they should, you can make a complaint. For more information, see the later section Complaining about your energy supplier.

If you pay your landlord for energy

Your landlord may pay for the gas or electricity in your home and resell the energy directly to you. Your landlord should not charge you more than they pay for gas and electricity themselves. For more information, see the Ofgem publication The resale of gas and electricity: guidance on maximum resale price.

Contact the Citizens Advice consumer helpline if you think your landlord may have overcharged you for energy. See the Useful contacts  section at the end of this guide for details.

Contact your supplier

If you are struggling to pay your energy bill or you have already fallen behind with payments, get in touch with your supplier as soon as possible. Your supplier has a range of options to help you. The support they may be able to offer you will depend on your situation. Examples of help include:

• a short-term payment break or a reduction in your payments;
• advice on accessing financial support that may be available, like benefits you may be entitled to or grants that could pay towards energy debt; and
• advice on energy efficiency and the support that may be available to meet the cost of energy efficiency measures.

Your supplier must also provide you with a free of charge method of contacting them when they become aware that you are having or will have difficulty in paying your bill.

Vulnerability

People can be vulnerable for a wide range of reasons. Vulnerability can be linked to age, physical health, mental health, or going through a difficult time in life. A vulnerability could be temporary or ongoing. You should let your supplier know if there is anything about your circumstances that makes you vulnerable as they may offer you more support if they know this.

You should also check if your supplier has signed up to the Energy UK Vulnerability Commitment. Energy UK is a trade association. Suppliers signed up to the Vulnerability Commitment have said they will provide extra support to vulnerable customers. This includes:

• making sure staff have an understanding of vulnerability and can identify that you might be in vulnerable circumstances;
• giving you an alternative way of contacting them in addition to phone contact; and
• making sure you have paper versions of your bill if this is what you need.

Priority Services Register

Energy suppliers each have a Priority Services Register to identify customers who are vulnerable and may need extra help. Examples of when you may be considered vulnerable include if you are:

• a pensioner;
• disabled or have a long-term medical condition;
• experiencing a mental health problem; or
• pregnant or have young children.

You may be able to register for other reasons that are not listed above. For example, if you have recently been bereaved.

You can apply to be on the register by contacting your supplier. If your name is put on the register, you may get:

• help to read your meter or have it moved;
• letters and bills in a suitable format such as in large print or braille;
• password protection agreed with your supplier, so you know that the person calling is from your energy supplier;
• advance warning when supplies are going to be stopped for a period; and
• priority reconnection if your energy supply is disrupted.

If you own your own home and are receiving benefits, you might also be offered a free, yearly gas safety check of your appliances. For more information, see the Ofgem webpage Join your supplier's Priority Services Register.

Make an arrangement to pay your debt

If you do not pay your gas or electricity arrears, your supplier can disconnect your supply. So, you should treat the arrears as a priority debt. This means you should pay gas and electricity arrears before paying non-priority debts such as credit cards or unsecured loans.

Contact your supplier and ask for a payment arrangement based on what you can afford. You can use our Ask your energy supplier to accept affordable payments sample letter.

Ability to pay

Your supplier has to look at your ability to repay your energy debt. The supplier must:

• take your individual circumstances into account;
• make full use of available information, including your budget;
• make it easy for you to talk to them about concerns you have around your ability to pay; and
• contact you in a timely manner to discuss whether a different repayment plan is appropriate if you miss a payment on an agreed repayment.

When your supplier knows that you are having difficulty repaying your energy bills, they must give you the option to pay the arrears:

• by regular instalments based on an agreed plan;
• through deduction from your benefits if you are on particular benefits; or
• through a prepayment meter, if one is appropriate for you.

Your supplier must also offer to provide energy efficiency information to help you reduce your energy charges.

Contact the Citizens Advice consumer helpline if you need help negotiating an arrangement with your supplier (see the Useful contacts section for details), or contact us for advice.

How to work out an affordable offer

Use My Money Steps to work out your budget. It is very important to budget for ongoing gas and electricity bills. Ask your energy supplier to tell you what your weekly or monthly energy charges are. Alternatively, to work this out add up your bills to find out the total amount for the previous year.

• To work out weekly charges, divide the total by 52.
• To work out monthly charges, divide the total by 12.

Put the amount into your budget as an essential expense. Then add in your other essential expenses. This will show you what surplus you can afford to offer to your supplier and to any other priority creditors. If you need help to work out what offer to make to your supplier, contact us for advice.

Your supplier should offer you different payment options and budgeting schemes to suit you. You can ask to pay your bills every week, every two weeks or every month. Keep paying for the energy you are using and an amount off your debt, even while you are trying to make an arrangement.

If your circumstances change

If a change in circumstances means you cannot afford the payments that you had agreed with your supplier, ask them to review the payment arrangement. Ask your supplier to either:

• lower the payment arrangement to an amount you can afford; or
• give you a break from paying towards your energy debt if you cannot afford to pay anything at the moment.

You can use the Re-negotiate with your energy supplier if your current repayment arrangement is unaffordable sample letter. It is a good idea to start making the reduced payment that you offer.

Paying your debt directly from your benefit

You may be able to use the Fuel Direct scheme to pay towards your energy arrears directly from your benefit if you receive one of the following benefits.

• Income-based Jobseeker's Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Income Support
• Pension Credit
• Universal Credit

Under the scheme, a set amount is taken to pay towards your debt and an amount may also be taken to pay for your ongoing energy costs. From 1 April 2022 onwards, the Department for Work and Pensions (DWP) will only agree to new or increased deductions for ongoing energy costs if you give your consent.

If you want to pay by Fuel Direct, contact:

• the Pension Service if you get Pension Credit;
• the Universal Credit helpline if you get Universal Credit; or
• Jobcentre Plus if you get income-related ESA, income-based JSA or Income Support.

Ask how much will be deducted from your benefit to pay towards your debt. If the deduction will be higher than your budget shows that you can afford, you are likely to be better off negotiating a payment arrangement directly with your supplier. Contact us for advice if you are not sure whether Fuel Direct would suit you.

Prepayment meters

Your supplier may suggest that you have a prepayment meter. On this kind of meter, you pay in advance for the fuel that you are going to use. Prepayment meters can also be set to collect debt from the money that you put in.

You must be asked if you want a prepayment meter before your supplier takes action to disconnect your supply. If your supplier fits a meter rather than disconnecting your supply, they may charge you up to £150. If a health condition or vulnerability prevented you from dealing with your energy debt, your supplier should not charge you for fitting a prepayment meter as a way of sorting out your debt.

Tell your supplier if you think there is any reason that it would not be safe for you to use a prepayment meter. Your supplier must either make it safe for you to use or offer you a different payment method.

Smart meters in prepayment mode

Smart meters measure your energy use and can send this information to your supplier electronically. Smart meters can be set up as prepayment meters and have a wide range of options for topping them up, including by phone, by internet or with a special app. This can mean that they are easier to use than traditional prepayment meters.

Prepayment meter points

• Prepayment meters allow you to carefully control the amount you spend on energy.
• Prepayment meters can help you to pay for your energy as you go and avoid future energy debt once you have paid your debt off.
• If you can't afford to top up the meter, you may end up without any energy until you can afford to top it up again. See the later section, Self-disconnection and self-rationing.
• You cannot spread the cost of your energy over the year, as you can with a credit payment plan. When you need the most energy, you might find it difficult to afford what you need.
• You will still have a daily standing charge for being connected, even on days when you do not use any gas or electricity. You will need to ensure there is enough money on your meter to pay this daily charge, otherwise your next top up will go towards the unpaid standing charges before gas or electricity that you can use.
• You might leave a fire switched on if the money runs out. This could be a serious danger if you forget that you have left the appliance on and put more money in to restore your supply without first turning it off.
• There may be hidden costs if you do not have a smart meter and you cannot afford to pay for much energy at one time. The cost of travelling to top up your meter can add to the cost of your energy. Frequently topping up your meter may also be difficult if you live in a rural area, have dependants or have a disability.

Supplier forcing you onto prepayment meter

If you are in debt to your supplier, they may be able to force you onto a prepayment meter. They may do this by either:

• installing a prepayment meter after obtaining a court warrant; or
• switching your smart meter from credit mode to prepayment mode without your consent.

Suppliers should not force you onto a prepayment meter if they have not offered you another way to pay your debt.

Before forcing you onto a prepayment meter, your supplier must take steps to check that a prepayment meter would be safe and practical in your circumstances. This includes trying to contact you and trying to visit you to understand your circumstances.

Examples of when a supplier may consider that a prepayment would not be safe for you include:

• if nobody in your household would be able to operate or top up the prepayment meter;
• if being on a prepayment meter could harm the health of somebody in your household;
• if you and all other members of your household are aged 75 or over; and
• if there any children aged under 2 in your household.

There may be other reasons that a prepayment meter might not be safe for you, such as having young children in the household or if somebody in your household is pregnant.

Let your supplier know if there is any reason that you have to believe that a prepayment meter would not be safe or practical for you. You can also contact us to discuss what points you may be able to raise to try to stop your supplier forcing you onto a prepayment meter.

Self-disconnection and self-rationing

If you have a prepayment meter, you could become self-disconnected. This is where you are left without gas or electricity until you can afford to top up your prepayment meter. There are various reasons this could happen, for example forgetting to top up the meter or not realising that the meter was low on credit. If you are in this situation, suppliers are required to provide you with either:

• an Emergency Credit to top up your meter; or
• a Friendly-hours Credit at times top up points may be closed (this is usually overnight, at weekends and on public holidays).

These types of credit may be built into your prepayment meter already. If you need this support but are unsure how to access it, contact your supplier.

Even if you can keep your prepayment meter topped up, you may find you can only do this by self-rationing. This is where you limit your energy use to save money, or where you spend less on other goods or services so that you can have an energy supply.

If you are vulnerable, your supplier may be able to provide you with an 'Additional Support Credit' to ensure you have a supply of energy. There are a wide range of reasons you could be in a vulnerable situation, for example, living with a physical or mental health issue, experiencing a bereavement, or having a drop in your income. Your supplier may offer you Additional Support Credit if they know you:

• have self-disconnected;
• are at risk of self-disconnecting;
• have self-rationed; or
• are self-rationing.

Call your supplier if you need this support. Explain your situation and ask them to provide you with an Additional Support Credit. If you are not sure if you are in a vulnerable situation, speak to your supplier or contact us for advice.

Repaying a credit from your supplier

Usually, credit has to be repaid when you next top up your supply. But, if this will not be possible, suppliers must consider your ability to pay and agree an affordable repayment plan with you. See the earlier section Make an arrangement to pay your debt.

Disconnection

You should be able to prevent disconnection if you contact your supplier and arrange to repay your debt at an affordable rate, either by instalments, Fuel Direct or through a prepayment meter. You must be asked if you want a prepayment meter before your supply is disconnected, if it is safe to install one. See the earlier sections Make an arrangement to pay your debt and Prepayment meters.

Gas and electricity companies cannot cut off your supply unless they have first offered you a range of payment methods to help you pay. They must only disconnect your supply as a last resort.

Contact your local council and the Citizens Advice consumer helpline if your supplier is threatening to disconnect your supply. Your local council may be able to help you to avoid disconnection or to restore your energy supply through their local welfare assistance scheme.

If you have children, consider contacting your local social services department for help with your energy payments. Tell your supplier that you have contacted social services as they will usually delay cutting you off if social services are looking into your case. This could give you time to make an arrangement to pay. The Children Act 1989  gives social services the power to make payments in certain circumstances to families with children in need.

It is important that you do reach an agreement before disconnection occurs, because it will be much cheaper to repay your existing debt than to pay for reconnection as well.

Landlord not paid the bill

Your landlord may pay the gas or electricity for your home. Contact your local council or the Citizens Advice consumer helpline if your supplier is threatening to cut your supply off because the landlord has not paid the bill. Your local council may have the power to help you avoid disconnection or to restore your energy supply through their local welfare assistance scheme.

Disputed debt

If you are genuinely in dispute about your electricity or gas bill, your supplier should not disconnect your supply. Contact the Citizens Advice consumer helpline for help in disputing your bill or if your supplier threatens to disconnect your energy supply. See the Useful contacts  section for details.

Old debt and new address

You cannot be disconnected for a gas or electricity bill from an old address if you have moved home. However, you may find it hard to get an energy supply in your new home from the same supplier unless you make an arrangement to pay your debt with them. You may need to use a different supplier for your new address.

Preventing disconnection – winter months

Certain activities concerning gas and electricity may only be carried out with a licence, regulated by Ofgem. Licences contain conditions that licence holders must abide by. The licence conditions provide protection for particular groups of customers during the period 1 October to 31 March.

Standard Licence Condition 27 states that your suppler must not disconnect you during the winter months if you are a domestic customer and you:

• have reached State Pension age and live alone; or
• have reached State Pension age and live only with other people who have reached State Pension age or are under 18 years old.

To check your State Pension age, visit the GOV.UK page Check your State Pension age.

Standard Licence Condition 27 also states that your supplier must take all reasonable steps to avoid disconnecting you during the period 1 October to 31 March if your household includes somebody that:

• has reached state pension age;
• is disabled; or
• is chronically sick.

If your supplier is threatening disconnection of your supply and you are in one of these groups, let your energy provider know straight away. You can also get help from the Citizens Advice consumer helpline. See the Useful contacts section for details.

Preventing disconnection – Energy UK Vulnerability Commitment

The Energy UK Vulnerability Commitment gives vulnerable customers further protection from disconnection. If your supplier has signed up to the Vulnerability Commitment, they will not knowingly disconnect you if:

• you are vulnerable;
• your household has children under the age of 6 (or under the age of 16 during 1 October to 31 March); or
• you cannot safeguard your personal welfare or the personal welfare of other members of the household due to age, health, disability or severe financial insecurity.

Check to see if your supplier has signed up to the Vulnerability Commitment, as not all suppliers have. If you can benefit from the protections offered by the Commitment, tell your supplier that you are vulnerable and need an affordable way of paying for your energy supply. Also ask to be put on the supplier's Priority Services Register, if you have not already done this.

Entry into your home

If you don't come to an agreement to pay your debt, your supplier can apply for a warrant from the magistrates' court, making it legal for them to enter your home to disconnect your energy supply. They will usually tell you when the magistrates’ court hearing will take place. You should contact a local advice agency to see if you can get support at the hearing if you want to stop the warrant.

Even at this late stage, you can contact your supplier to make an affordable offer of repayment before you or your representative goes to court. But, if you do go to court, take copies of your budget to give to the court and your supplier to support your offer. Also take any evidence you wish to present. This could include points about:

• a dispute about the amount charged;
• how the supplier has behaved;
• what actions you have taken;
• what offers of payment you have made and when;
• the effect a disconnection would have on your household, especially on children, people who are ill or who are elderly;
• disabled members of your household; and
• your budget.

If you don't have a representative, you can take along a friend to court to support you. If you want them to be able to speak for you, explain to the magistrate why you need this and ask that your friend is allowed to address the court directly on your behalf. It is up to the magistrate whether they will allow your friend to speak directly to the court, or not. If the magistrate does not allow your friend to speak directly to them, they will usually allow your friend to speak quietly to you, take notes for you and give you advice.

If the court grants the warrant, your supplier must give you seven days' notice (gas)  or seven working days' notice (electricity)  before they can use the warrant to enter and disconnect your supply. Your supplier is more likely to fit a prepayment meter than to disconnect your supply. If you are getting benefits, consider whether Fuel Direct could be a better option for you than a prepayment meter. See the earlier section Make an arrangement to pay your debt.

Theft

If your supplier thinks that fuel has been stolen, they may try to prosecute you for the theft. If they do, try to find out these key details.

• What do they say happened?
• What evidence do they have?
• When do they think that this occurred?

Theft of energy supply or tampering with a meter can result in civil proceedings for the recovery of the debt, a £1,000 fine or imprisonment.

Theft can also lead to disconnection of your supply at short notice, or no notice in some cases. However, the supplier has to take account whether anyone in the household is a pensioner, disabled or has a long-term medical condition.

Disconnection must not take place during the winter months and can only be used as a last resort for non-payment of debt which arose from a theft.

Defending yourself against an accusation of theft can seem daunting. You may need to seek the advice of a solicitor and you should also contact the Citizens Advice consumer helpline. See the Useful contacts  section for details or contact us for advice.

Getting reconnected

To get reconnected after disconnection for unpaid debt, you will have to pay the original energy debt, a reconnection fee and any administrative costs you have been charged, as long as they are reasonable. You may also have to pay a security deposit before your supplier will agree to supply you again if you don't want a prepayment meter. You cannot be asked to pay a security deposit if you agree to have a prepayment meter.

Contact your local council to ask if they can help pay for reconnection charges through their welfare assistance scheme. If you have children, consider asking your local Social Services department for help.

If you don't owe any money to your supplier when they reconnect you, you can ask your supplier to fit you a credit meter so that you don't have to top it up. Even if you do owe your supplier money, you may be able to argue that it is not safe or reasonably practical for you to have a prepayment meter if you:

• have medical equipment that needs electricity;
• are disabled;
• have a mental health condition; or
• have a long-term illness.

Once you have paid the outstanding amount, or you have agreed a repayment plan with the supplier, reconnection should occur within 24 hours. If the payment is made, or agreement is reached, outside the hours of the working day, the reconnection period begins from the start of the next working day.

If the supplier fails to reconnect within the appropriate time, they will usually have to pay you a standard payment of £30  within 10 working days.

If you feel that the level of reconnection charges are unfair, contact the Citizens Advice consumer helpline for help in challenging your supplier. See the Useful contacts  section for details.

Complaining about your energy supplier

If you are not happy about how your supplier has treated you, start by making a complaint to them directly, to see if they can put matters right. Ask for their code of practice and for their complaints procedure or read these on their website. This gives you the information you need to make an effective complaint in the right way.

The code of practice may give you the words to describe exactly how the supplier has not met your expectations and their own standards. The complaints procedure will tell you the steps you need to take to register your complaint with your supplier.

The Energy Ombudsman

If you are not happy with the outcome of your complaint after eight weeks, or if you have received a 'deadlock' letter giving your supplier's final response to your complaint and you are not happy, you can escalate your complaint to the Energy Ombudsman. If the Energy Ombudsman decides in your favour, they can require your supplier to:

• make an apology;
• pay financial compensation;
• take an action to remedy the matter; or
• any combination of these.

The service is free, but you must make your complaint within a time limit. The service can accept a complaint within 12 months of a deadlock letter. If you have not received a deadlock letter, they may be able to investigate a complaint older than 12 months.

See the Useful contacts  section for contact details.

Resolver

You can also use the free service, Resolver, to help you write to your supplier and to pass your complaint on to the Energy Ombudsman. Resolver's website tools can help you to:

• prepare your emails;
• keep a copy of communications;
• make a case file where you can save and upload emails and documents; and
• remember when to escalate your complaint to the Energy Ombudsman.

Other steps you can take

If you are not happy with what the Energy Ombudsman has decided, you may be able to take court action, depending on what's gone wrong. This could involve significantly more costs, so you should discuss your plan for action with the Citizens Advice consumer helpline first. See the Useful contacts section for details.

Help with your energy bills

Warm Home Discount

The Warm Home Discount Scheme requires most suppliers to take £150 off the winter electricity bills of some low-income customers. The government is currently consulting on who will be eligible for the payment under the scheme in winter 2025-26.  

We will update this guide when more information about the new criteria for the scheme becomes available. You can also check the GOV.UK page on the Warm Home Discount Scheme to see if it has been updated with information on the payment for winter 2025-26.

Winter Fuel Payment

The Winter Fuel Payment is a lump sum payment of up to £300 to help pensioners with the cost of heating in the colder months. Each year, you may be entitled to the payment if:

• you have reached your State Pension age before the fourth Monday in September; and
• you receive Pension Credit, income-related ESA, income-based JSA, Income Support or Universal Credit.

The payment is usually made automatically in November or December.

You can check your State Pension age on the GOV.UK page Check your State Pension age. You can also get a free personalised benefits check on the Turn2us website to see what you may be entitled to.

Contact the Winter Fuel Payment Centre on 0800 731 0160 or check the GOV.UK page on the Winter Fuel Payment for more information.

Cold Weather Payment

You may get a Cold Weather Payment if you are getting certain benefits and the average temperature in your area is recorded as, or forecast to be, zero degrees Celsius or below  for seven consecutive days.

If you are eligible, you get a payment of £25  for each seven-day period  of very cold weather between 1 November  and 31 March. The Department for Work and Pensions (DWP) automatically pays it into the same account as the one they use to pay your benefit, within 14 days  of the end of each cold weather period. You may be eligible if you are getting one of the following.

• Pension Credit
• Income Support
• Income-based Jobseeker's Allowance
• Income-related Employment and Support Allowance
• Universal Credit
• Support for Mortgage Interest

See the GOV.UK page on Cold Weather Payment for more information.

Household Support Fund (England)

If you live in England, you may be able to receive a small grant to support with energy bills. Contact your local council to check if you may be eligible.

Trust funds and charities

Some energy companies have set up funds that may be able to help you pay your energy bills if you are in financial difficulties. Ask your supplier if they have a fund or contact us for advice.

There may also be charities that can help you with your energy bills. Turn2us can try to find charities that may be able to help you. You can do a search for a grant on the Turn2us website. See the Useful contacts  section for details.

Energy saving help

You may be able to get a grant or a loan to help with insulation, draught proofing, central heating and other energy-saving measures. Some energy companies offer energy-saving schemes and discounts. Suppliers may offer other kinds of help.

• The page Get help paying for energy efficiency home improvements on the Citizens Advice website has advice about grants and funding that may be available for energy-saving home improvements.
• In Wales, you can also apply for free energy grants and help through the Nest scheme. Contact Nest on 0808 808 2244. See the Useful contacts  section for details.

If you have a combi-boiler, see Nesta's Money Saving Boiler Challenge for information on how you may be able to save money on your gas bills. The website provides a step-by-step guide on identifying whether changing the 'flow temperature' setting on your boiler may save you some money and gives instructions on how to change the setting.

For information on other steps that you may be able to take to save on your energy costs, see GOV.UK and Ofgem's webpage Actions for saving energy.

If you are a homeowner, you can also use an online service on GOV.UK to get recommendations for home improvements that could make your property cheaper to heat and keep warm. If you live in England and cannot access the tool online, you can call the Home Retrofit Advice and Information Line on 0800 098 7950 (Monday to Friday 8am to 6pm and Saturday 9am to 12pm).

Free energy-efficiency consultation

The Groundwork charity runs a Green Doctor service to help people stay warm, stay well, and save money on household bills. If there is a Green Doctor project near you, you may qualify for a free in-home consultation from an energy-efficiency expert. Examples of free help that you may be able to get through a consultation include:

• fixing causes of heat loss in your home;
• tackling problems with damp or mould;
• tips on saving energy while keeping your home safe and comfortable;
• installation of small energy efficiency measures; and
• help with accessing other support such as government grants.

Visit the Green Doctor website to check if there is a project local to you. The website also has videos and guides with tips on saving energy and keeping warm.

Smart meters

Smart meters are a type of gas and electricity meter that can send automatic meter readings to your supplier. Bills can be more accurate if you have a smart meter because automatic meter readings mean that your supplier does not have to estimate how much energy you have used.

Smart meters also come with an in-home display, which is a device that shows you how much energy you are using and how much it is costing you in pounds and pence. The information from an in-home display may also help you to identify how you can reduce your energy usage to save money.

Over the next few years, suppliers will have to offer a free smart meter to all of their customers. If you do not have a smart meter already, you can contact your supplier to ask if they will install one for you now.

The Smart Energy GB website has more information about smart meters and their benefits.

Government support schemes have ended

The government ran several schemes to help support households with the rising costs of energy. The support included limits on what you could be charged per unit of gas or electricity and a £400 discount on the energy bills of every household with an electricity connection.

As the support from government support schemes has ended, you may find that your bills have increased even though your usage has stayed the same.

If you pay energy costs to a landlord, they had to consider passing the support on to you. Your landlord had to notify you of their decision on how much they would pass on, even if they decided it was not appropriate to pass on any support. Contact us for advice if you feel your landlord has not passed on the right amount of benefit from a government support scheme. You can also find more information on landlords' obligations on GOV.UK.

Getting the best energy deal

Switching your tariff or supplier

As the cost of energy is high at the moment, it may be difficult to lower your bills by changing your tariff or supplier. Visit the Citizens Advice webpage Switch energy supplier or tariff for information on:

• the points to consider before switching; and
• how to switch.

As well as looking at the price of a new deal, it is also worth checking how well energy suppliers deal with customer service. You can do this on the Citizens Advice page Compare energy suppliers’ customer service.

Switching if you have energy debt

If you have a credit meter (one you don't have to top up) and have owed money to your current supplier for 28 days or more, you may not be able to move to a new supplier until you have paid the debt.

If you have a prepayment meter and owe £500  or less to your current supplier, you should be allowed to switch.If you think that you are being treated unfairly and need help to sort it out, contact the Citizens Advice consumer helpline (see the Useful contacts  section for details) or contact us for advice.

Tenants’ rights

If you are responsible for paying your supplier's bill rather than your landlord, you have rights to choose your supplier and what method you use to pay your bill. See the Citizens Advice page Switching energy supplier or tariff if you're renting for more information.

Fuel Direct and switching

If you are paying for your energy by Fuel Direct deductions from your benefits, you should tell the DWP the details as soon as you know that you are changing your energy supplier.

Credit on old energy accounts

If you have moved to a different supplier, you may have an old account with an amount of credit still in it. Contact your old supplier to get this credit back. See the Uswitch website for more information.

Credit reference agencies

Your supplier may send information about your account history and court action to credit reference agencies. This may affect your ability to get credit in the future. See our Credit reference agencies guide for more information.

Useful contacts

Citizens Advice consumer helpline A consumer helpline if you need more help with an energy problem. Phone: 0808 223 1133 www.citizensadvice.org.uk

Nest Wales A scheme offering free home energy efficiency improvements to eligible customers. Phone: 0808 808 2244 www.nest.gov.wales

Scope A charity with experts providing support for disabled households facing issues around energy and water. Phone: 0808 801 0828 www.scope.org.uk/disability-energy-support

The Energy Ombudsman An independent body which handles disputes between consumers and energy suppliers. Phone: 0330 440 1614 www.energyombudsman.org

Turn2us A national charity that provides benefits checks and has a database of charitable grants. www.turn2us.org.uk

Other guides that may help you

Breathing space guide

Credit reference agencies guide

• understand what harassment is;
• see how the Financial Conducts Authority’s rules and guidance can help you;
• help you make a complaint; and
• get advice about other options for dealing with harassment from debt collectors.

The sample letter mentioned in this guide can be filled in on our website.

What is harassment?

If you do not pay your debts, your creditors are allowed to ask you to pay and keep reminding you to pay from time to time. This will not usually count as harassment. However, they must not act illegally. This guide will help you identify what behaviour by your creditors may count as harassment and what you can do about it. The guide covers:

• how the Consumer Credit sourcebook (CONC) of the Financial Conduct Authority (FCA) can help you with harassment;
• the consumer protection laws that may help you; and
• how to deal with harassment by your creditors.

FCA’s Consumer Credit sourcebook

The FCA’s Consumer Credit sourcebook (CONC) must be followed by all companies which offer some form of credit to consumers. They must be authorised by the FCA. This includes banks, credit card companies, payday lenders, law firms, debt collectors and tracing agents.

Search the Financial Services Register to see if your company is authorised. You can search using the company’s name or its postcode.

How to use the Consumer Credit sourcebook

If you think that a company trying to collect a debt from you is behaving in an unacceptable way, you can use the Consumer Credit sourcebook (CONC) to help you make a complaint to that company. You can also use it if you decide to complain to the Financial Ombudsman Service (FOS).

In the Consumer Credit sourcebook (CONC), the FCA sets out the kind of activities and behaviour by these companies that they consider to be an unfair or improper business practice. The rules and guidance say that creditors should:

• treat you fairly;
• be clear about what they are doing; and
• give you 'reasonable' time to repay your debts. What is reasonable will depend on your circumstances. Your creditors may still refuse your offers without breaking the rules or guidance.

See the full rules and guidance on the FCA website, or contact us for advice.

Unfair or improper business practices

The FCA says that the following practices are considered unfair or improper.

Communication

The FCA says:

“A firm must…communicate information…in a way which is clear, fair and not misleading.”

Principle 7, Principles for Businesses

This includes:

• sending letters that look like court claims;
• not making it clear who the company is or what their role is;
• using unhelpful legal language;
• not giving balance statements about the debt when asked;
• not letting you know the outcome if you have disputed or queried the debt;
• contacting you at unreasonable times even when asked not to; and
• asking you to contact them on premium rate phone numbers.

False representation of authority

The FCA says:

"When contacting customers, a firm must not misrepresent its authority or its legal position with regards to the debt or debt recovery process."

Consumer Credit sourcebook (CONC) 7.11.1

This includes:

• claiming to work for the court or be a bailiff;
• making you think action can be taken that is not legally possible. For example, that they could take your property, enter your home or enforce a judgment without having authority;
• using a business name or logo that leads you to think they are a government body, a court or a solicitor;
• leading you to believe that court action has been taken against you when it hasn’t;
• leading you to believe that not paying your debt is a criminal offence; and
• threatening to take court action in England if you live in Scotland or the other way round.

Physical or psychological harassment

The FCA says:

"A firm must not pressurise a customer: (1) to pay a debt in one single or very few repayments or in unreasonably large amounts, when to do so would have an adverse impact on the customer’s financial circumstances; (2) to pay a debt within an unreasonably short period of time; or (3) to raise funds to repay the debt by selling their property, borrowing money or increasing existing borrowing."

Consumer Credit sourcebook (CONC) 7.3.10

This includes:

• contacting you too frequently or at unreasonable times;
• pressurising you to sell property or take out more debt;
• using more than one collection company at the same time or not telling you when your debt has been passed to another company;
• not passing on a history of your debt including any payment arrangement you have;
• pressuring you to pay in full or in large instalments you cannot afford over an unreasonably short time;
• not giving you a reasonable time to seek advice or put forward payment proposals;
• refusing a reasonable offer of payment from you or an adviser;
• making threatening gestures or statements;
• ignoring disputes about whether you owe the money;
• trying to embarrass you in public. For example, using social networking sites or leaving inappropriate phone messages. This could also include threatening to tell a third party such as a neighbour or your family about your debts; and
• continuing to pursue the debt where it is clear you might have mental health problems which mean you cannot deal with your debts at that time.

Deceptive and unfair methods

The FCA says:

"A firm must conduct its business with integrity."

Principle 1, Principles for Businesses

This includes:

• sending letters addressed to "the occupier" or discussing the debt with someone without knowing if they are you;
• refusing to deal with an adviser acting on your behalf;
• inappropriately passing your details on to debt management companies, brokers or creditors;
• not accepting reasonable offers or passing on payments you make;
• trying to enforce the debt if you are in a debt payment scheme such as a debt relief order or an individual voluntary arrangement;
• refusing to freeze action or failing to investigate if you dispute the debt; or
• trying to take larger or more frequent payments than you have agreed from your account using a continuous payment authority.

Charging for debt recovery

The FCA says:

"A firm must not claim the costs of recovering a debt from a customer if it has no contractual right to claim such costs."

Consumer Credit sourcebook (CONC) 7.7.2

This includes:

• claiming collection costs when the original credit agreement didn't allow this to happen and making you think you are legally liable for the costs;
• not clearly stating the amount that can be added for collection costs in the original credit agreement; and
• adding any unreasonable charges.

Debt collection visits

The FCA says:

"A firm must ensure that all persons visiting a customer’s property on its behalf…do not…act in a threatening manner towards a customer…”

Consumer Credit sourcebook (CONC) 7.9.14

This includes:

• not explaining the reason for any visit and not giving you notice of the time and date they will call;
• not visiting you if they know you are ill or vulnerable. This includes leaving if they find you are unwell or distressed;
• not coming in to your home if you do not want them to and leaving if you ask them to; and
• not visiting you at work or somewhere like a hospital.

Statute barred debts

The FCA says:

"a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period."

Consumer Credit sourcebook (CONC) 7.15.4

If a debt is barred under statute, it means that by law (the Limitation Act 1980), the lender has run out of time to use certain types of action to try and make you pay the debt. It does not mean the debt no longer exists. The amount of time a creditor has is called a 'limitation period'.

Different debts have different limitation periods, and this area of law can be complicated. If you think you have a debt that might be statute barred, contact us for advice. See our Statute barred debts guide for more information.

The Consumer Credit sourcebook (CONC) says that the following practices are considered unfair or improper when dealing with statute barred debts:

• asking you to pay even if you have heard nothing from the creditor during the limitation period;
• telling you that your creditor may take you to court when they should know that the limitation period has run out; and
• pressing you for payment if you have told the creditor that you are not going to pay the debt because the limitation period has run out.

Consumer protection laws

Consumer protection laws are designed to stop traders acting unfairly, including the use of 'aggressive practices'.

• Protection from unfair trading practice that occurred before 6 April 2025 is covered by The Consumer Protection from Unfair Trading Regulations 2008. For more information, see the Consumer Protection from Unfair Trading guidance on GOV.UK.
• Protection from unfair trading practice that occurred on or after 6 April 2025 is covered by the Digital Markets, Competition and Consumers Act 2024. For more information, see the Unfair commercial practice guidance on GOV.UK.

Trading standards has the power to take enforcement action against creditors if they break the rules on consumer protection. Examples of unacceptable behaviour are:

• a debt collector pressurising you to repay a debt by contacting you at unreasonable times such as late at night or at unreasonable locations such as your workplace; and
• a debt collector threatening you with action, such as the use of bailiffs, to recover money for unenforceable debts.

If you think you may have a complaint about your creditor not following consumer protection laws, contact the Citizens Advice consumer helpline. See the Citizens Advice consumer helpline and Trading Standards and Useful contacts sections later in this guide.

Dealing with harassment by creditors

Contact the creditor

• The first step is to write to the creditor and explain your concerns about the company's behaviour. See the Creditor harassment warning sample letter.
• Tell your creditors how you prefer to be contacted. Ask them to confirm their agreement to this.
• A letter sent by recorded delivery at this stage may avoid the need to take further action against the creditor.
• Tell them you are aware of consumer protection laws and the FCA Consumer Credit sourcebook, and that you will consider making a complaint about their behaviour using these.
• It is worth keeping a diary of phone calls, letters, and visits and so on. Use our Sample creditor contact diary at the end of this guide.
• It is helpful if another person can confirm what happened, for example when the collector called at your home.
• You may want to politely but firmly refuse to let a collector in, or not answer the phone to the collector until the problem is sorted out.

Citizens Advice consumer helpline and Trading Standards

If you want to make a complaint, you can contact the Citizens Advice consumer helpline. See Useful contacts later in this guide. They will give you advice over the phone or by email. They can put you in touch with the trading standards department in your local council if you need more detailed or face-to-face advice.

Trading standards can investigate whether an offence has been committed and whether prosecution is appropriate. The penalty is a fine of up to £5,000 in the magistrates' court. A conviction is also likely to provide evidence that the creditor is no longer a suitable company to be authorised by the FCA.

The Financial Ombudsman Service (FOS)

You can complain to the Financial Ombudsman Service (FOS) about how a creditor or debt collection agency has behaved when dealing with your account. The service is free and independent. FOS will look at your complaint and decide if the creditor or debt collection agency has treated you fairly. FOS can order the company to put things right, and even order them to pay you compensation. You must complain to your creditor or debt collection agency first.

See our Complaining about your lender guide for more information.

Financial Conduct Authority (FCA)

It may be worth contacting the Financial Conduct Authority (FCA) directly on the Consumer Helpline. See Useful contacts later in this guide. The FCA does not take up individual complaints, but collects information that can be used to take action against creditors.

The FCA has extensive powers, which include being able to:

• withdraw a company’s authorisation;
• stop a person working in financial services;
• suspend a firm for up to 12 months;
• publicise what a company has done wrong; and
• give the company a financial penalty.

Trade associations

The creditor may be a member of a trade association with a code of practice. Find out if your creditor is a member of a trade association and contact them with your complaint. A code of practice is not legally enforceable, but the association may take some action against their members. See Useful contacts later in this guide.

Loan sharks

Loan sharks are money lenders who do not have a licence. This means they are acting illegally. They usually charge very high rates of interest and use violence or threats to make you pay.

There is a confidential hotline you can ring if you have borrowed from, or wish to report, a loan shark. It is very important that you get advice. Don't be pressured into making payments you cannot afford. Check the information on the MoneyHelper website. See the Useful contacts section later in this guide or contact us for advice.

Other options

Blocking telephone calls

If you are a BT customer and you are finding it difficult to deal with telephone calls from your creditors, the 'Choose to refuse' service might help you. The service allows you to refuse calls from up to ten different numbers. There is usually a cost for this service. If you have a different phone provider, contact them and ask if they have a similar service.

Legal options

You could consider the following options in very serious cases of harassment or other illegal behaviour by your creditors. It is very important to get proper legal advice about these options, as they are complicated and can be costly. Contact us for advice.

Malicious Communications Act 1988

This deals with sending letters or articles for the purpose of causing 'distress or anxiety'. If your creditor is found guilty, they can be fined in the magistrates' court. To prosecute your creditor successfully, the letter or article sent would have to contain:

• a message which is indecent or grossly offensive;
• a threat; or
• information which is false and known or believed to be false by the sender.

Section (4) (a) of the Criminal Justice Act & Public Order Act 1994

This makes it a criminal offence to deliberately cause 'harassment, alarm or distress' by using 'threatening, abusive or insulting words or behaviour'. This can only be an offence if it happens in a public place, not in your own home. You would need to contact the police who would have to make a decision about whether or not to prosecute for this offence.

Protection from Harassment Act 1997

This makes it a criminal offence to harass people and put 'people in fear of violence'. The harassment must happen on at least two separate occasions. The police would have to agree to prosecute for this offence.

Useful contacts

Citizens Advice consumer helpline Phone: 0808 223 1133 www.citizensadvice.org.uk/consumer/

Financial Conduct Authority (FCA) Regulator for financial services such as payday lenders, banks, credit companies, insurance companies and mortgage lenders. Phone: 0800 111 6768 www.fca.org.uk/

Financial Ombudsman Service For complaints about banks and other creditors. Phone: 0800 023 4567 or 0300 123 www.financial-ombudsman.org.uk

Legal Ombudsman Organisation to contact about complaints to do with solicitors. Phone: 0300 555 0333 www.legalombudsman.org.uk

MoneyHelper Information and advice on money matters. Phone: 0800 138 7777 (English), 0800 138 0555 (Welsh) www.moneyhelper.org.uk

Stop Loan Sharks Advice on how to deal with loan sharks – unauthorised money lenders. Phone: 0300 555 2222 if you live in England or 0300 123 3311 if you live in Wales. www.gov.uk/report-loan-shark

Trade associations

Consumer Credit Association Association for home credit lenders. Phone: 0124 431 2044 www.ccauk.org

Consumer Credit Trade Association Members include banks, payday loan companies, mortgage lenders and debt collectors. Use their website to check if your creditor is a member. Phone: 0127 471 4959 www.ccta.co.uk

Consumer Finance Association Association for payday loan companies. Phone: 020 3178 7408 www.cfa-uk.co.uk

Credit Services Association Association for debt collection agencies. Use their website to check if your creditor is a member. Phone: 0191 217 0775 https://www.csa-uk.com

Finance & Leasing Association Association for a range of consumer lending companies. Use their website to check if your creditor is a member. Phone: 020 7836 6511 www.fla.org.uk

Sample creditor contact diary

Use this diary to record every time your creditor contacts you, whether by phone, letter, or visit. This will help to show if you are being harassed.

Other guides that may help you

Complaining about your lender guide
Statute barred debts guide

• see what kinds of help you might get from a charitable organisation;
• get tips on applying for their help; and
• understand how to find them.

Who can get help

Many of us, at one time or another will need a bit of extra help to deal with what life brings. Fortunately, there are many charitable organisations which understand this and which want to help. You might need a little extra help to deal with:

• the expense of a new child or an unexpected debt;
• an illness or a disability which stops you working; or
• setting up a new home with few resources.

Whatever your need is, a charity might be able to help you to deal with your situation more easily.

Help that charities can offer

Charities offer a range of different kinds of help, depending on their purpose and resources. They might offer:

• Money – for example, to pay for an essential item or to clear an energy debt;
• A product– for example, a voucher for goods, items needed by people with particular conditions; or
• A service- for example, a holiday for a disabled person or a carer.

Where to find charitable help

Turn2us

Use the online Grants Search on the Turn2us website www.turn2us.org.uk to help you find charitable help based on your situation.

Have a look at the information on the Grants – what you need to know page first, so that your application has the best chance of success.

Tips on applying for a grant

• Each charitable fund will have its own application process that usually includes filling in forms and communicating with people. This could include going online, speaking to someone on the phone and writing letters.
• Make sure you meet the application rules before you apply.
• Most funds will ask for evidence, including recent financial statements and something to show that you qualify for the charity’s help.
• Read any guidance notes before applying.

Some charities will only accept applications through an intermediary or support worker who applies on your behalf. Intermediaries that might help include:

• health and social care professionals, such as nurses, doctors, therapists and social workers;
• advisers from Citizens Advice and other advice organisations;
• staff and volunteers from charities working with people in financial need;
• someone who speaks on your behalf, for example, an advocate for people with mental health issues or learning disabilities; and
• teachers.

Benevolent funds

Many occupations and some organisations have dedicated benevolent funds. These might help you with a grant or other kind of assistance if you, or a member of your family, has:

• worked in a particular occupation or industry;
• been a member of a union or an association; or
• worked for a large firm or an organisation, such as the Civil Service.

Use this kind of detail in your grant searches. If you know of an organisation that could help you, they will usually have a website giving their contact details.

Local organisations

Local agencies, such as Citizens Advice, usually know what kinds of help are available locally and how to apply for it. Find  your nearest office on their website www.citizensadvice.org.uk.

Your local council will be able to tell you if they have a welfare assistance scheme that might help you. Go to GOV.UK’s website www.gov.uk. Advicelocal's website www.advicelocal.uk has a postcode lookup tool to help you find local agencies in your area.

Help with Energy and Water Bills

If you are struggling to pay your energy or water bills, help may be available from energy company schemes, benefits, charitable grants or your local council

See the Turn2us Help with Energy and Water Bills information – https://www.turn2us.org.uk/Your-Situation/Energy-and-Water-Bills

Foodbanks

The Trussell Trust has set up foodbanks where you might get emergency food, if you can't afford to buy what you need. See if there is a foodbank in your area on their website www.trusselltrust.org. Use the  Find a foodbank near you search box. Other foodbanks have been set up, linked to the Independent Food Aid Network. You can get contact details for these foodbanks on their website www.foodaidnetwork.org.uk. Click on the members list and map on the home page. People at foodbanks may be able to suggest other kinds of help too.

Internet

The Money Saving Expert website www.moneysavingexpert.com is a good source of information about different types of grants that are available and other ways to save money. Search using the words 'Grant grabbing' to get more information.

GOV.UK’s website www.gov.uk has plenty of links to the different kinds of grants which are available nationally and locally. Just type the word 'grants' into the search box.

Local Welfare Schemes in England

If you live in England, your council might operate a local welfare assistance scheme. Contact your council to ask if you can get help in your area.If you are struggling to find any mention of a fund on your local council website, try doing an internet search typing “name of your local council and hardship or welfare fund.

Discretionary Assistance Fund in Wales

In Wales, the Discretionary Assistance Fund may help if you are in financial difficulty because of an emergency or disaster. It can give grants or provide items, such as white goods (for example, fridges and washing machines) to help with essential needs. It can also help vulnerable people to live independently. Go to www..gov.wales.

Ways to clear your debt

There are different ways to deal with your debts.

Whatever your situation, there is usually an option that is suitable for you.

See our Ways to clear your debt guide for more information.

Other guides that may help you

Ways to clear your debt guide

For example, if a creditor gets a county court judgment (CCJ) against you in the County Court, you may want to ask the court for help. You may need to ask the court to:

• let you pay by instalments, or reduce the instalments you have been asked to pay;
• stop enforcement action, for example suspend a bailiff's warrant; or
• set aside a judgment that shouldn't have been made.

The court fees you can be asked to pay vary, depending on what you are asking the court to do. We have other guides that explain about which court forms to use. This guide tells you whether you can get help with the cost of court or tribunal fees. These rules apply in the County Court, the High Court and also tribunals.

Use this guide to:

• find out how the court decides if you can get help with court fees;
• understand the disposable capital test; and
• understand the gross monthly income test.

Will I have to pay a fee?

When you apply for help to pay a court fee, the court will use two tests to decide your application. These are the 'disposable capital test' and the 'gross monthly income test'.

Disposable capital test

The court will look at how much disposable capital you have. Disposable capital includes savings, stocks and shares, redundancy payments and the 'value' in second homes. 'Value' means the money you would have left if you sold the second home after any mortgages, secured loans and an allowance for sale expenses have been taken off. The value in your own home will not be counted.

If you are aged under 66 :
For court fees of £1,420 or less, if you have less than £4,250 disposable capital, you will pass the disposable capital test. For court fees of more than £1,420, the rules about disposable capital are different. Contact us for advice.

If you are aged 66 or over :

• If you have less than £16,000 disposable capital, you will pass the disposable capital test.
• If you do not pass the disposable capital test, you will have to pay the court fee in full.

Gross monthly income test

If you pass the disposable capital test, the court will look at your monthly income before any deductions. The court will then decide how much of the court fee you should pay.

• If you receive certain benefits, you will not have to pay anything towards the fee.
• If you do not receive benefits but are on a low income, you may not have to pay the fee. Alternatively, you may only have to pay part of it.

Under the gross monthly income test, you have to provide proof of your income. This can include bank statements, wage slips and letters confirming that you get certain benefits.

Can I appeal?

If the court refuses your application, you can appeal. Do this in writing within the time limit the court sets when they write to tell you they have refused your application. This will usually be 14 days from when you receive the letter.

Check online

You can apply for help with court fees online, see www.gov.uk/help-with-court-fees. The Help with Fees service can contact the Department for Work and Pensions directly to confirm if you are getting a suitable qualifying benefit. You will be given a reference number, and may need to add this to court forms whilst you are waiting for a decision.

You may still be asked to supply paperwork; for example, bank statements or payslips, so make sure you keep this information safe.

The Help with Fees service will contact you to let you know if your application has been successful or not.

Use this guide to:

• see if the debt you owe (in some cases, county court judgments (CCJs)) could be enforced in the High Court;
• understand your rights if high court bailiffs try to take your goods;
• apply to court to stop high court bailiffs acting; and
• find out other ways a creditor can enforce a high court judgment against you.

The sample letter mentioned in this guide can be filled in on our website.

Changes to bailiff law

On 6 April 2014 , the law on bailiffs changed. The information in this guide is based on our understanding of the new rules. Some bailiffs may interpret the new rules differently. It is not yet clear how the new rules will be applied in practice. If you are unsure whether a bailiff’s actions are legal, contact us for advice.

Bailiffs are also commonly known as enforcement agents. In this guide we use the term bailiff.

What is the High Court?

In England and Wales, creditors can make a claim for money that you owe through either the County Court or the High Court. Most creditors will take action against you in the County Court. You may be familiar with procedures in the County Court, possibly from reading our self-help pack, or because creditors have already taken court action against you.

High Court procedures, from the issue of the claim, up to the court making a judgment, are the same as in the County Court. However, there are important differences between enforcement procedures in the two courts.If you have any questions about county court procedures, contact us for advice.

The High Court is part of the Supreme Court, which is based at the Royal Courts of Justice in central London and in 'District Registries' of the High Court in larger towns. These are usually in the same building as your local County Court hearing centre.

Which claims can be dealt with

If you have a credit agreement that is regulated by the Consumer Credit Act 1974 , your creditor has to make a claim against you in the County Court. They cannot apply to enforce the county court judgment in the High Court. The High Court is most likely to be used by creditors for claims over £100,000 for debts not regulated by the Consumer Credit Act 1974 .

The creditor has to show why the case should be heard in the High Court, for example because:

• it is for a large amount and there is a significant dispute;
• the case is complex; or
• the result could be very important to the public.

Enforcing CCJs in the High Court

If a creditor has a CCJ against you, they may be able to enforce it in the High Court by taking control of goods. Business and trade creditors are likely to do this. Also, it can sometimes be done for unpaid nursery fees, funeral charges or even water charges. This is because these types of debt are not covered by the Consumer Credit Act 1974 .

'Taking control of goods' involves High Court Enforcement Officers (HCEOs) instructing bailiffs to visit you. HCEOs are authorised by the High Court to enforce a writ by using high court bailiffs. A HCEO may be able to visit you, but only if they are also authorised to work as a bailiff. If the bailiffs gain entry, they may list your goods and ask you to sign a 'controlled goods agreement'. This allows you to keep using the goods listed. However, if you do not pay, the goods listed on the controlled goods agreement can be removed and sold. In some situations, your goods may be removed straight away or, as a last resort, locked up in a room on your premises.

Consumer credit regulated debts

Your creditor cannot enforce your judgment in the High Court if the debt is covered by the Consumer Credit Act 1974 .

High court bailiffs

The order which allows high court bailiffs to act is known as a 'writ of control'. You will have no notice that your creditor has applied for a writ.

The bailiff should give you seven clear days’ notice that they are due to visit you to take control of goods. This is sometimes known as the ‘enforcement notice’. ‘Clear days’ do not include Sundays, Christmas Day or bank holidays.

When the writ of control is issued, bailiffs have a right to try to take control of your goods. This applies even if you move the goods or give them to someone else at any time, even if this is within the seven clear days’ notice period.

CCJs

If your judgment was made in the County Court, your creditor may choose to apply for a writ of control if:

• the amount owing under the CCJ is £600 or more;
• the debt is not regulated by the Consumer Credit Act 1974 ; and
• you have not paid the CCJ as the court ordered.

The creditor must apply for a writ of control if:

• the creditor wants to use bailiff action against you;
• the amount owing under the CCJ is £5,000 or more;
• the debt is not regulated by the Consumer Credit Act 1974 ; and
• you have not paid the CCJ as the court ordered.

Check your agreement

Check your credit agreement to see if it is regulated by the Consumer Credit Act 1974 . If you are not sure, contact us for advice.

High court judgments

If your judgment was made in the High Court, the creditor can apply for a writ of control:

• as soon as the judgment has been made, unless you have applied for a stay of execution; or
• as soon as a payment becomes overdue under the terms of a stay of execution.

If a creditor wants to use a writ of control to enforce a CCJ or high court judgment, it will automatically be issued by the High Court unless six years or more have passed since the date of judgment. If it has been six years or more since the judgment was made, the permission of the court will be needed before the writ can be issued. A writ of control is valid for 12 months and can be renewed by the creditor.

The creditor will send a stamped copy of the writ to the HCEO of their choice. The HCEO will generally instruct a bailiff, who will attempt to take goods quite quickly after the issue of the writ. See What items can high court bailiffs take? later in this guide.

Advance warning

You will get advance notice from the bailiff that they intend to take control of your goods. When you receive the notice, you may be able to pay the money due to the bailiff, or directly to the creditor, before the bailiff attempts to take control of your goods.

Stay of execution

A ‘stay of execution’ is an order made by the High Court which stops bailiffs acting as long as you meet certain conditions, such as paying the debt by set instalments. See Applying for a stay of execution later in this guide.

Why use the High Court?

• If a creditor obtains a high court judgment on an unregulated debt, interest can be added on to the debt at a set rate, which is currently 8% a year. This is known as 'statutory interest'.
• Not all county court judgments (CCJs) carry statutory interest. If statutory interest is not already being added to a CCJ and it is then transferred to the High Court for enforcement by bailiffs, statutory interest can be added from the date of transfer.
• High court bailiffs may be more difficult to negotiate with than county court bailiffs.
• The fees that high court bailiffs can charge are higher than those for county court bailiffs. See the section High court bailiff fees .

Can high court bailiffs enter my premises?

You do not have to let high court bailiffs into your home. High court bailiffs are only allowed to force their way into your home if all three of the following points apply.

• They have taken control of your goods inside your home, either by securing them on the premises or making a controlled goods agreement (CGA) with you.
• If you made a CGA with the bailiff, you have broken the CGA by missing at least one payment.
• They have given you two clear days' notice that they are coming to inspect or take these goods.

If you have not let the high court bailiffs in before, keep your doors locked. Although high court bailiffs should not enter through a window, it is a good idea to keep windows closed. High court bailiffs can take control of goods outside your home, so if you have a vehicle, keep it in a locked garage. If you park the vehicle on your drive, the bailiff could clamp and possibly remove it.

You could park the vehicle away from your property, but if you park it on a public road and the high court bailiffs find it, they could force entry to your car and possibly clamp and remove it. Contact us for advice.

High court bailiffs can break into your business premises even if they have not been in before.

Changes to bailiff law

This is our understanding of the new rules on bailiffs from 6 April 2014 . High court bailiffs may argue that under these rules, they can go anywhere they like to take control of your goods. They may say that this allows them to come into your home even if they have not been in before and that you should not refuse them entry. If high court bailiffs say things like this to you, contact us for advice.

Virtual Controlled Goods Agreement

A high court bailiff may ask you to agree to making a ‘virtual’ or non-entry controlled goods agreement (CGA) when they initially contact you by telephone or letter, rather than coming to visit your property to take control of goods.

• You don’t have to agree to making a virtual CGA. If an enforcement agent visits your home they do not have the right to force entry if they are collecting most types of civil county court or high court judgments.
• There are potentially advantages and disadvantages to agreeing a virtual or non-entry CGA, depending on your circumstances.
• If you have a stable income and you are very confident that the money you have available on your budget is sustainable, a virtual CGA may be worth considering due to potential benefits, such as not having a bailiff coming to your home and saving fees.
• If you cannot be certain that you will be able meet all of the payments you agree with the high court bailiff a virtual CGA is a bad idea, as the bailiff may apply for a warrant to force entry into your home if you miss a payment.

If you are considering whether to agree to making a CGA contact us for advice.

What items can high court bailiffs take?

High court bailiffs should not take:

• clothing, bedding, furniture and basic household items that are necessary for the basic domestic needs of you and your family;
• tools, books, telephones, computers, vehicles and other items of equipment that are necessary for use personally in your job, business or education (up to a total value of £1,350 );
• items you or someone else is physically using, where taking the goods is likely to lead to a breach of the peace; and
• items belonging to someone else who doesn't owe the debt.

The goods that high court bailiffs are not allowed to take include the following.

• Either a cooker or microwave – you should be left with at least one cooking appliance.
• A refrigerator.
• A washing machine.
• A dining table and chairs for you and your household.

This is not a complete list. If you are unsure whether an item is exempt, contact us for advice.

If a high court bailiff takes control of goods that are protected, you can make a court claim for the goods to be returned. Contact us for advice.

If you have already let a high court bailiff into your home, it is important to bear in mind the following points.

• The high court bailiff will not usually take away goods on their first visit.
• They may ask you to sign a 'controlled goods agreement'. This allows you to keep using the items listed on the agreement. However, if you break the terms of the controlled goods agreement, the high court bailiff can return and take the goods by breaking in if necessary. They must give you two clear days’ notice before doing this. If you don't sign the agreement, the bailiff may lock the goods up in a room in your property. Alternatively they may remove the goods straight away. Contact us for advice.

A high court bailiff may not be able to take goods that are worth more than you actually owe. If they threaten to do this, contact us for advice.

Stay of execution

Even if you have signed a controlled goods agreement, you can still apply to the court for a ‘stay of execution’. The court may be less willing to agree to this if you have done so.

Complaints

If you want to complain about a high court bailiff, contact us for advice.

Can high court bailiffs take goods belonging to someone else?

High court bailiffs should not take goods that belong to other people. If they threaten to do this, explain that the goods do not belong to you. Show a receipt or credit agreement as proof. If the owner hasn't got a receipt, they can provide a sworn statement called a 'statutory declaration' instead. Contact us for advice.

If a high court bailiff takes goods belonging to a third party, the third party should write to the bailiff to show that they own the goods. The bailiff should pass this information onto the creditor. The creditor should then decide whether to accept or reject the third party’s claim. If the creditor rejects it, the third party can apply to court to get the goods back. However, they will need to pay the court a deposit. The size of the deposit depends on the value of the goods that have been taken. Contact us for advice.

High court bailiff can take goods that are jointly owned by you and your partner, but they are only entitled to your share of the goods.

If the money judgment is owed by a limited company or limited liability partnership (LLP), only assets belonging to the limited company or LLP may be taken. Contact us for advice.

More than one bailiff

If you already have a different high court bailiff or any other type of bailiff collecting a different debt from you, inform the high court bailiff of this. If they collect any money from you, they must pay it to whichever bailiff was instructed to collect from you first. This is likely to be the bailiff who started collecting from you first. This may encourage the high court bailiff to return the writ.

Self-employment

If you are self-employed, you can also contact Business Debtline on 0800 197 6026 .

Can high court bailiffs take goods on hire purchase or conditional sale?

There are different legal views about whether high court bailiffs can take control of goods that are on hire -purchase or conditional -sale agreements. If they threaten to do this, contact us for advice.

What if there are no goods to take?

If a high court bailiff comes into your home, they may decide that your goods are not worth enough to cover the cost of them coming with a van to remove and sell them. If this is the case, the bailiff may return at a later date to try to take control of your goods. They have 12 months from the date of the enforcement notice to take control of your goods. If you made a payment arrangement with the bailiff after they sent you the enforcement notice, the 12 month period starts from when you broke the terms of the repayment arrangement.

High court bailiff fees

High court bailiffs can charge you the following fees if they start the type of action described.

• £75 for the stage from issuing a writ of control to before the high court bailiff's initial visits. This stage includes the issue of the enforcement notice.
• £190 Where a controlled goods agreement is made, this fee covers the high court bailiff's initial visits to when you pay the debt in full or break the agreement. If your debt is over £1,000 , high court bailiffs can also charge 7.5% of the amount you owe above £1,000 . For example, if you owe £1250, high court bailiffs can add on 7.5% of £250 at this stage.
• £495 can be charged for either of the following situations.

You have not made a controlled goods agreement. Here, the fee covers the stage from the high court bailiff's initial visits up to (but not including) your goods being removed.

You have made a controlled goods agreement but not kept to it. Here, the fee covers the stage from when you break the agreement up to (but not including) removal of your goods.

Note that where no controlled goods agreement is made, both the first and second enforcement stage fees can be recovered (that is, the £190 and the £495 fee). If your debt is over £1,000 , high court bailiffs can also charge 7.5% of the amount you owe above £1,000 .

• £525 – This covers the stage from attending to remove goods for sale to the end of the process. If your debt is over £1000 , high court bailiffs can also charge 7.5% of the amount you owe above £1,000 .
• The cost of storing goods which the high court bailiff has removed.
• The cost of hiring a locksmith, if one is needed.

If your goods are sold at auction, further fees can be charged. Contact us for advice.

The high court bailiffs should give you information about how much you owe before and after they visit you. If you think they have charged you too much, contact us for advice. You may be able to challenge the fees through the County Court.

VAT

If your creditor is registered with HMRC to reclaim VAT the high court bailiff should not add an amount equivalent to VAT on to the fees they charge you. This is likely to be the case if your creditor is a business.

What paperwork should high court bailiffs give me?

Under the law, high court bailiffs have to leave you paperwork telling you what they intend to do or what they have done. For example, they should give you a written notice when they:

• intend to visit you;
• have taken control of your goods; and
• intend to re-enter your premises after entering before.

There are strict rules about the information this paperwork must contain. If the high court bailiffs do not give you the correct paperwork, you can complain or consider taking legal action against them. Contact us for advice.

Challenging a debt in the High Court

Even if a county court judgment is enforced in the High Court by high court bailiffs, it remains in the County Court for most other purposes. Therefore, if you want to challenge a judgment, or apply to set it aside for some reason, this must be done in the County Court where the judgment was made in the first place. You will need to pay a fee to apply to set aside the judgment, unless you are exempt. See our Help with court fees guide for more information.

If the creditor has applied to use high court bailiffs to enforce the judgment, you may also need to make a separate application for a 'stay of execution'. See Applying for a stay of execution later in this guide. If you don't do this, high court bailiffs may visit your home. If they do so, show them copies of your application to set aside the judgment and your application for a stay of execution.

Informal agreements

Most people, who cannot pay the high court bailiffs in full straight away, negotiate with them to pay by instalments. This process is informal but cheaper and quicker than an application to the court. You need the cooperation of the creditor and the bailiff for this to work. It is important not to offer more than you can afford or to fall behind with the payments you agree. If you do fall behind with the payments and the bailiff has already taken control of your goods, they may remove them to the sale room for auction.

Applying for a stay of execution

If the high court bailiff issues a notice and you cannot afford to pay all the money, try to make an arrangement to pay by instalments.

If you cannot come to an agreement with the high court bailiff, make an application for a 'stay of execution' on a court form called an N244. This application should be made to the court that issued the writ of control. You will have to pay a fee to make the application. Explain that you are requesting a stay of execution, with an offer of payment. This could be by instalments or a lump-sum payment of the whole amount by a certain date.

• You need to provide an 'affidavit of means' or a 'witness statement' with your application for a stay of execution.
• An affidavit of means is a financial statement, written in a specific form. See the example later in this guide .
• The affidavit has to be 'sworn', for example, before a court officer, a solicitor unconnected with the case, a commissioner for oaths or a justice of the peace (JP). You will usually have to pay a small fee for this.
• A 'witness statement' is very similar to an affidavit, but instead of swearing it, you sign a 'statement of truth'. There is no fee for this, so you may prefer to use this method. There is an example witness statement on www.justice.gov.uk.
• In the affidavit or witness statement, describe any special circumstances which you feel would make it unfair for the judgment to be enforced by high court bailiffs. Also, give details of any property you own and any other debts you owe.
• Make three copies of the N244 and send (by first class recorded delivery), or take them to the court along with your affidavit of means or witness statement and the fee.
• Ask for a hearing date as part of your application. The court will then set a hearing date and give you notice of this when they send the application form back to you.
• You must then post (again by first-class recorded post), or take the form N244, notice of hearing and affidavit of means or witness statement to the creditor or their solicitor. The creditor must receive the paperwork at least four working days before the hearing.
• You could also enclose a letter explaining the documents you have sent. See the sample letter Request for a stay of execution in the High Court .
• As well as applying for a stay of execution in the High Court, you should also apply to the County Court to vary the terms of the original county court judgment. You should ask the County Court to make an instalment order for the same amount and payment dates as you have requested in the stay of execution application. If the County Court accepts your application, and you keep to the payments, this will stop the creditor from taking most other types of action to enforce the judgment. See our Varying a CCJ guide for more information.

Guidance given by courts

We have heard of cases where courts have given different advice about how to apply for a stay of execution. If you apply for a stay of execution and the court tells you to follow a different procedure to the one described in this guide, contact us for advice.

The stay of execution hearing

A hearing date will be set. The hearing will be heard by the 'master' (in the High Court in London) or by a District Judge in chambers (in his or her private room) in the court where the writ of control was issued. You must go to the hearing . It is up to the master or District Judge to decide if they will grant you a stay of execution. It is more likely if:

• there is no advantage for the creditor in enforcing the judgment, for example, you have no assets; or
• there is a good reason why you are unable to pay the money at the moment.

The hearing can be some weeks away. High court bailiffs may try to visit you in the meantime.If your application is urgent, ask your local District Registry if they will agree to hold an immediate hearing and issue an interim order suspending the writ. If the District Registry agrees to your request, they will then set a date for a final hearing.

However, your local District Registry will usually need the case to have been transferred to them from the District Registry that issued the writ before considering this type of request. Not all District Registries will issue interim orders to suspend writs of control. Check with your local District Registry and contact us for advice.

Interim orders

If the District Registry agrees to issue an interim order suspending the writ of control until the final hearing, send a copy to the high court bailiff. Some District Registries may do this for you.

Can I apply to transfer the hearing to my local court?

There is no automatic transfer to your local court when you apply for a stay of execution.

• Contact the District Registry of the High Court that issued the writ. Ask them to transfer the case to your local District Registry. You could include this request when you apply for a stay of execution.
• If this does not work, try asking your local District Registry of the High Court to deal with the transfer.
• If you request is turned down you must attend the hearing at the District Registry of the High Court that issued the writ.

Transferring the hearing is complicated. Some courts may ask you to pay a fee for this type of application. Contact us for advice.

What should I do if the stay of execution is granted?

If the court agrees to a stay of execution, you must draw up the order yourself, send or take it to the court for stamping and then serve it on the creditor. It is also a good idea to send a copy to the high court bailiff.

You must then start making the agreed payments to the creditor.

Keep to the agreement

If you do not keep to the agreed instalment plan, the writ of control will start up again. If it does, the high court bailiff can start the process of trying to take control of your goods again.

Complaints

You can complain about the conduct of the high court bailiff. You must first complain in writing to the high court bailiff. They should deal with your complaint under their own complaints procedure. If you are not happy with their reply, you can complain to the High Court Enforcement Officers Association (HCEOA), who will look at the complaint if it falls within their rules. Whilst the HCEOA will not look at the amount of fees charged, they will look at whether the right fees were added at the right time.

The High Court Enforcement Officers Association Ltd Drake House, Gadbrool Park, Northwich Cheshire CW9 7RA

www.hceoa.org.uk
Email: complaints@hceoa.org.uk

Enforcement Conduct Board

The Enforcement Conduct Board (ECB) is an independent oversight body for the debt enforcement sector in England and Wales. You can complain to the ECB about accredited enforcement firms and their bailiffs if you have already tried complaining to the enforcement firm or bailiff directly. The ECB can only consider complaints about enforcement action that took place from 1 January 2025 onwards.

You can find details of ECB accredited member firms listed in the Accredited Firms Register.

The ECB website has an online complaints form which you can use to make your complaint. If you aren't able to use the online form you can download the form and email it to:

Complaints.Team@enforcementconductboard.org.

However, the ECB warn that emailing a complaint form to them can cause delays, so the online route is likely to be the best option if you are able to use it.

Your credit rating

If you have a judgment in the County Court or High Court, this will normally be recorded on a public register called the Register of Judgments, Orders and Fines. This information is also registered on your credit reference file. The information will stay on your credit reference file and the Register of Judgments, Orders and Fines for six years from the date the judgment was made, unless you pay the judgment in full within one calendar month .

If you pay the judgment in full after one calendar month , you can ask for your entry to be marked as 'satisfied' if you provide proof of payment, but the judgment will still stay on your credit reference file. This is likely to affect your ability to get credit. See our Credit reference agencies guide for more information.

Defending a claim

If you attempt to defend the court claim but are unsuccessful in doing so the judgment will not be registered unless:

• the court has ordered instalments to be paid; or
• the creditor takes steps to enforce the debt.

You should not defend a claim unless you have reasonable grounds to do this. If you have not got reasonable grounds, you may end up having to pay additional costs. If you are thinking about defending a claim, contact us for advice.

If no judgment has been registered you could try to negotiate an affordable payment plan directly with the creditor. This would prevent the judgment from being registered unless the creditor applies for enforcement measures through the court.

Alternatively, you could apply to the court for a variation, which is an instalment plan. If approved by the court this would prevent the creditor from being able to use any enforcement as long as you keep up with the payments, but the judgment would be registered.

Other methods of enforcement

Remember – a creditor cannot get a money judgment against you in the High Court for a debt that is regulated by the Consumer Credit Act 1974 .

The creditor will have to pay a fee to the High Court for applications to enforce a judgment. The creditor will add the fee to your debt and in some cases there may be extra court costs which they can add as well.

Attachment of earnings order

Where a money judgment has been made in the High Court, the creditor may want an 'attachment of earnings order' to make your employer take regular deductions from your wages to pay the debt. In this case, they must ask for the matter to be transferred to the County Court. However, interest will still be added at the High Court rate of 8% . If the attachment of earnings order does not recover all the money you owe, and another method of enforcement is used, the case may need to be transferred back to the High Court. See our Attachment of earnings orders guide for more information.

Orders to obtain information

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 'order to obtain information', or information order. This process is the same as in the County Court. This can happen at any time and not just when you miss a payment. The interview is made up of a set of standard questions and you may be asked to bring things like your pay slips and credit agreements to the interview.

Go 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 cooperating with the process, so you must act if you are sent an interview date. If you want further help on information orders, contact us for advice.

Charging orders

A creditor can apply to the High Court for a charging order at any time, not just when you are in arrears with your instalments. This can happen even if you have been given a stay of execution on a writ.

Where a money judgment has been made in the High Court, the creditor can ask the court to put a 'charge' on your home. This 'secures' the debt like a mortgage so that it will be paid off when the house is sold.

If a charging order is made in the High Court for a high court judgment, the court does not have the power to agree to terms as in the County Court, such as agreeing the creditor cannot apply for an order for sale as long as your youngest child is under the age of 18 .

However, the court should not give your creditor permission to sell your home if:

• you keep up to date with any instalments the court ordered you to make under the high court judgment; and
• your creditor applied for the high court judgment on or after 1 October 2012 .

The High Court cannot be used to apply for a charging order if your high court judgment is for less than £5,000 . The creditor must apply for the case to be transferred to the County Court nearest to you before they can make the application.

If your high court judgment is over £5,000 , the application can be made in the High Court or the County Court.A charging order application is a two-stage process. If you object in time, there must be a hearing in front of a 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.

The High Court still has to look at all the circumstances of the case when deciding whether to make a charging order. If you have a stay of execution and are up to date with your instalments, use this as an argument against a charging order being made at the hearing.

Most creditors are prepared to wait for you to sell your home until some point in the future, and to be paid out of the proceeds of the sale. If a creditor does make an order for sale application, a hearing will be arranged and the court has the final decision about whether the order should be granted. See our Charging orders guide for more information.

Make an arrangement

If the court did not order you to pay the high court judgment by instalments, it is still a good idea to make an arrangement to pay the debt back. This is because your creditor is less likely to enforce the charging order if you make regular payments.

Third party debt order

Your creditor can apply to the court to 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. This process is the same as in the County Court.

A third party debt order is an 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 apply for a third party debt order, contact us for advice.

Affidavit of means in support of stay of execution

IN THE HIGH COURT OF JUSTICE 1998.B.23QUEEN'S BENCH DIVISIONBETWEEN

Walter Sichort and Sons Limited (Claimant)

And

Alan Hill (Defendant)

AFFIDAVIT IN SUPPORT OF STAY OF EXECUTION

I, Alan Hill, of 8 Long Road, Anytown, Blankshire, salesman, the above-named Defendant, make oath and say as follows:

1. On the 9th day of June 1998, the Claimant entered judgment in this action against me for £1,500 and £350 costs.
2. I am a salesman employed by Green and Sons. I earn £250 a week net. I am married with one child aged 4. I own the house where I live with my family. The property has a value of £70,000 and is subject to a mortgage of £40,000 with HSBC.
3. I have no other income. I have savings of £200 with HSBC. My household contents are worth £2,000. I own a Fiat car RST 425M worth £250. I have no other capital. My wife works as a cook and earns £40 per week net. She draws £20 per week child benefit.My weekly outgoings are as follows:£90.00 mortgage£20.00 gas, electricity and water£70.00 food and household£9.00 telephone£10.00 car repairs and petrol15.00 council tax£20.00 miscellaneous expenses
4. in all circumstances, the best offer I can make to satisfy the judgment in this action is by payment of instalments of £50.00 per month, and I ask that the Court will stay execution upon such judgment so long as I pay that amount each month on the 31st day of each month, commencing on the 1st day of December 2014.

SWORN this…day of …….2014

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