If I owe money can a business take me to court?

If you owe a business money they might ask the court to make a county court judgment (CCJ) against you. If you get a CCJ, this means the court has decided that you owe the money.

This information covers how to deal with court action where you agree you owe money. If you don’t agree that you owe money, there are different rules to follow.

Before court action

The creditor has to follow court rules called the pre-action protocol for debt claims.

Sharing information

The court expects you and the creditor to share a reasonable amount of information. This is so you can understand each other. The court also expects you to reach an agreement if you can.

What is a letter of claim?

Before the creditor starts court action they should send you a letter of claim. The letter should include information like:

• The amount of the debt and whether interest is being added.
• Details of the agreement you made.
• What you are currently paying.

The letter will also include a reply form.

How do I reply to a letter of claim?

If you receive a letter of claim and agree that you owe the debt, you should send the creditor your completed reply form within 30 days of the date on the letter. If you do not reply within 30 days the creditor may start court action.

The form has four sections. If you can’t fill in every section, it is still important to return it within 30 days.

Make sure you include your offer of payment.

What can I do if the creditor takes court action?

If you cannot come to an agreement the creditor may take court action.

If this happens it is unlikely you will have to go to court. Everything is usually done by completing court forms and sending them through the post.

You will receive a ‘claim form’ from the court. This will tell you how much the creditor says you owe. You will also receive a reply form, which asks for information about your situation, such as your finances and other debts you owe. You have 14 days to complete and return it. If you don’t send it back, the court could order you to pay the whole debt in one go immediately.

What happens next?

If the creditor accepts your offer, you will receive a CCJ from the court telling you to pay in monthly instalments.

If the creditor does not accept your offer, the court will decide what you should pay each month.