Being forced to pay your debts
If you owe someone money (a creditor), they can only force you to pay your debts if they take the correct legal action. This might mean getting a court order or a tribunal decision.
Some creditors have fast-track powers that mean they don't have to go to court to prove you owe the debt.
If your creditor can force you to pay the debt, this is called doing diligence.
If legal action is being taken in England, Wales or Northern Ireland for a debt you owe, but you live in Scotland, you should get help to check that your creditor is following the correct procedure. You can get advice from your local Citizens Advice Bureau.
You should follow these four steps if your creditor is taking legal action against you.
Step 1: Check what powers your creditor has
If you owe money for any of the debts or legal arrangements listed below, your creditor has fast-track powers. Action to force you to pay might happen suddenly with a summary warrant.
Creditors with fast-track powers are:
- UK government - for road tax, VAT, income tax and national insurance
- Department for Work and Pensions (DWP) - for benefits overpayments
- Child Support Agency (CSA) or Child Maintenance Service (CMS) - for child support owed
- your local council - for arrears of council tax or water and sewerage charges, but not rent (see below)
- your local council and sheriff officers - for court fines and parking fines
- creditors with an agreement with the Books of Council and Session or sheriff court - this is called a writ registered for execution and acts like a court order.
If you owe money to the local council for rent, it has to follow a strict procedure to negotiate how the arrears can be paid back before it can take court action to force you to pay.
If you owe money to a private landlord for rent, they can take legal action in the First-tier Tribunal (Housing and Property Chamber).
Step 2: Check you owe the money
Most creditors who want to recover money from you have to take legal action to prove you owe the money. You'll receive an official form from the court or tribunal and you can reply to it. If you do nothing, the court or tribunal is likely to make an order in favour of the creditor.
If you agree that you owe the money, you might be able to ask the court or tribunal for time to pay even after the creditor has started court action.
There's information about time to pay for debts of up to £5,000 on the Scottish Courts and Tribunals Service website . There's information about getting time to pay at the First-tier Tribunal (Housing and Property Chamber) on its website.
If you're being pursued for a debt of more than £5,000, you should get advice from a specialist adviser about your options.
If you disagree with what's happened
If you don't owe the money, or you don't agree about how much you owe, you might need evidence to support your position. You might need the help of a specialist adviser to do this.
If you don't think the creditor has followed the correct procedure to make you pay a debt, you must get advice from a specialist money adviser about how to challenge the actions of the creditor.
Before your creditor can recover the debt, the court or tribunal will send you an official statement to say it agreed to a court order. This statement is called a charge for payment or a charge to pay.
A Debt Advice and Information Package (DAIP) must be issued to you with every charge for payment or charge to pay.
If you didn't get a DAIP with the charge, the demand for you to pay the debt isn't legally correct. But the creditor has 48 hours after delivering the charge to get the DAIP to you.
When your creditor can make you pay a debt
Your creditor can force you to pay a debt if:
- a court or tribunal has issued a decree or decision for the money owed
- you've broken a time to pay arrangement that has been agreed with the court or tribunal
- a summary warrant has been issued because your creditor has the power to ask the court or tribunal to issue it.
How your creditor can make you pay a debt
If the correct procedure has been followed, your creditor can:
- arrange for money to be taken from your earnings - this is called an earnings arrestment
- freeze your bank or building society account - this is called a bank arrestment
- place an order to stop you selling your home - this is called an inhibition
- arrange for your possessions to be sold at a later date.
All of these actions have strict rules that your creditor must follow.
Step 4: Check for restrictions on what you can do with your money
When your creditor applies for the power to make you pay a debt, they can apply for a number of warrants at the same time. These warrants control what you can do with your money and other assets until the debt has been paid. These are called actions on the dependence.
A creditor usually applies for these warrants to make sure you can't do any of the following before the legal action has been put into effect:
- hide or move money in your accounts
- sell any valuable goods
- sell your home or borrow against it.
Your creditor must stick to strict time limits while an action on the dependence is in force. You should get advice to check that your creditor is following these rules. If they're not, the legal action taken by your creditor might not be valid.