If you happen to owe money to a creditor and have overdue payments, they have the power to take you to court and make a claim over any money owed to them. If one of your creditors does decide to take you to court, then it’s crucial that you never ignore the situation in the hopes that it will get better – you need to take action against any case that is put up against you.

Speed Is Key

If you can take action relatively quickly, then you may still be able to salvage the situation, or at least stop it from getting worse. If the situation deteriorates, you could end up paying out more than you originally owed. In this short guide, we’ll look at what happens when a creditor gives you a notice about taking you to court, and what to look out for and do in this situation.
Before a creditor can take you to court, they are legally required to send you a letter of warning. This letter should detail exactly how much you owe them, when they expect to receive it by, and a statement of legal action if you cannot repay the amount owed. Depending on the exact type of debt, the letter will typically be either a default notice or a letter before action. A default notice will be sent if the money you owe is for credit card debt or for a personal loan. Any other type of debt requires a letter before action.

Going To Court

If any court action begins, you will receive a claim form – if you do not receive this claim form, then a court may not be able to go ahead with the creditor’s debt claim. Bear in mind that your creditor will have a record of every letter they have sent you. However, you and your creditor have a responsibility to reach an agreement and try and sort out the debt collection before legal action is taken.

In the case that you do get a claim form, you should be aware that this form details the exact amount that your creditor is claiming that you owe them. Some claim forms have another form included with them that states whether or not you agree to pay the amount stated on the claim form. No matter your decision, you should return this other form to your creditor. Read all of the documents sent to you before you send a response.

You can, of course, offer to pay back what you owe in instalments. A low offer is better than nothing at all, and some creditors have even been known to accept payments as low as £1. If your creditor accepts your repayment offer, they can ask the court to make the order without continuing onto a court hearing or involving a judge. This is the best outcome in a debt collection situation, because it means that you won’t need to go to court and have a judge decide what is a fair repayment.

At Debtcol, we work with businesses to help them reclaim what is owed to them in the most effective way possible. That means we follow the correct processes for legal debt collection, as well as offering advice and support services if they are needed. We can also help you make sure your business isn’t at risk for further outstanding debts, with business investigation and analysis service like director searches, private investigations and forensic accounting to make sure you only take on customers who can pay for your services. To find out more, just get in touch with the team today.