Litigation Made Clear: The Process Explained
Being contacted about a debt can feel stressful, but knowing the legal process can help you feel more in control. Here’s what to expect, step by step, and what options are available to you at each stage.
Your Guide to Understanding Litigation: Clear, Fair, and Manageable Steps
Intro: Initial Contact
Legal action is normally used as the last resort where it has not been possible, despite many attempts, to resolve the debt matter by payment in full or by agreeing and keeping to an agreed payment arrangement.
It is vitally important that you contact the creditor/debt collection agency before legal proceedings start and a County Court Claim is issued against you to prevent all the costs, interest and the possibility of a County Court Judgment (CCJ) being entered against you.
Stage 1: Letter Before Action
If the debt remains unresolved, the first communication you will receive is a Letter Before Court Action (LBA) from a Solicitor. This acts as an official warning that this matter is being taken to court. This letter advises you that a County Court Claim will likely be made against you/your company, unless the matter is resolved.
The letter includes a response pack if you wish to dispute the matter, or an income and expenditure form if you cannot pay it in full and want the creditor/debt collection agency to consider your offer to pay by instalments.
Stage 2: Court Proceedings
If the debt cannot be resolved voluntarily, the creditor/debt collection agency may initiate court proceedings. You will receive a Claim Form, which sets out the amount being claimed and your options. This is an important document, and it should not be ignored.
During this stage, you have several options. You can pay the debt in full to avoid potential credit consequences. Alternatively, if you dispute the debt, you can submit a Defence to the court explaining why you believe the claim is incorrect. The court may also consider requests for instalment plans or other arrangements if you are experiencing financial hardship. Court proceedings are not designed to penalise you but to provide a fair resolution. Engaging with the process early can often lead to outcomes that are more manageable and less stressful than if the case proceeds without your input.
Stage 3: County Court Judgment
If the court rules in favour of the creditor, a County Court Judgment (CCJ) or equivalent will be entered. This judgment legally confirms that the debt is owed and will negatively impact your credit rating for 6 years. Even after a judgment, there are still options available. You can pay the debt in full within one month of issue and apply to have the CCJ removed from the register. If payment in full is made after one month, you can apply to have the CCJ marked as satisfied to prevent further escalation. Alternatively, Courts often allow structured repayment plans for those who cannot pay in full immediately, balancing the creditor’s rights with your ability to pay.
Stage 4: Enforcement of the Judgment
If the judgment is not satisfied, the creditor/debt collection agency may seek enforcement. This can include deductions directly from your salary (Attachment of Earnings), securing the debt against a property to withdraw directly from a property sale (Charging Order), or seizure of certain possessions by court-appointed enforcement agents (High Court Enforcement). These measures are usually a last resort and are carried out according to strict legal guidelines.
Even at this stage, there are ways to manage the situation. Negotiating a repayment plan with the creditor or requesting intervention from the court to limit enforcement action can help protect your finances and reduce stress. Acting proactively and communicating openly is always the best approach.
Please be advised, if the creditor/debt collection agency has to escalate your case for enforcement there will be substantial extra costs that you will need to pay. This is why you should contact the debt collection company at the earliest possible stage.
Key Points to Remember
- Early communication is crucial: Engaging with the creditor or collection agency promptly often results in more flexible and manageable solutions.
- Professional help is available: Independent advice from financial advisors, debt charities, or legal professionals can guide you through each stage.
- Addressing debt early is easier: Resolving debts before they escalate to court or enforcement is almost always less stressful and more affordable.
Where can I get information about my account?
To access information about your account, you can log in to your online account. Here you can see all the information we hold including your account’s balance, original debt details, and any the payments you’ve made so far. If the online portal doesn’t answer all your questions or you require more information, you can contact us and we’ll be happy to answer your questions.
Our team will find out the correct address for the person we’re looking for and make sure you don’t receive further correspondance.
What happens if I ignore you?
We’ll keep trying to contact you by letter, email and phone. If we don’t receive a response after a certain amount of time, your account may be passed to our internal litigation team. If you do not respond, we may take legal action which could result in extra fees, charges and interest being added to your existing balance. It could also result in a County Court Judgement (CCJ) being entered against you which may impact your credit score, and could also escalate to Enforcement such as requesting that a High Court Enforcement officer visits you at your home. We want to avoid all of this, so please get in touch as soon as possible.
What will happen if I contact you?
When you contact us, we will first ask you a few quick questions to confirm your identity. We will then advise you why we’ve been contacting you, and we’ll have a chat about your circumstances and help find the best solution for you. We’ll always work with you to understand your situation and we’ll never ask you to pay more than you can afford.
What should I do if I can’t pay in full?
We understand that everyone’s situation is different and not everyone is able to pay in full. We will take the time to listen and understand your circumstances, and find the best solution for you. Our specialist team are trained to help you find the right support, so please make sure you let us know what’s going on, and keep us updated.
Our team will find out the correct address for the person we’re looking for and make sure you don’t receive further correspondance.
Can someone else manage my account for me?
We can work with anyone who you choose to manage your account for you, provided you give us permission. This may include debt management companies, relatives or any other appointed third parties. If this is the best option for you, please call to inform us or send us your signed permission by post or email.