Responding to Debt Claims
By Cara Wiltshire, Legal Assistant at Woodstock Legal Services
Woodstock Legal Services see many debt cases where some debtors have been more compliant than others and some who will simply do everything they can in order to avoid the claim being made against them.
Most commonly, debtors try to offer a payment plan in order to settle their outstanding debts, however in one particular case, the debtors and guarantors were refusing to make any payment at all and instead chose to ignore the claim until it became too late.
The debtors in this case were young university students who were refusing to pay, and therefore chose to ignore all the documents we sent to them. This only led to further action being taken every time the next stage of the debt recover process was ignored.
Woodstock explained to the parties the importance of responding to a claim before it gets to the county court stage, as this has such a damaging effect as a County Court Judgement (CCJ) made against them would significantly impact their credit files. In the end, the debtors chipped in together in order to settle the debt, after realising that ignoring the debt was not going to make it go away, despite their thoughts and feelings towards it. The debtors spent so long fighting against paying the debt, when they could have avoided a claim being made against them altogether if they had just responded sooner. All debtors were happy in the end to be able to move on without this debt looming over them, and luckily managed to avoid any further action taken by the courts.
It’s never wise to ignore a claim as the court will still enter the judgement against the debtor even if they don’t respond. If a debtor disagrees with the claim being made against them, however, it is always best to dispute this with the court where they can possibly list the claim for a hearing, rather than ignoring it. This will then become a defended claim and the court will be able to make a decision on the case. It must be taken into consideration that if the debtor loses the defended claim, further costs will be added to the outstanding debt.
If worse comes to worse and the debtor does have a CCJ made against their name, it is important to note that some lenders look more favourably upon a CCJ that has been satisfied as opposed to one that has not been paid. However, in most cases, credit applications for someone who has a CCJ will be rejected. Once again reiterating the importance of responding to a claim before it gets to this stage.
Tips for letting agents
If tenants should find themselves owing money to their landlord, it can prove highly beneficial for letting agents to take the time to negotiate with them, reminding them of the potential consequences, and try to settle the debt. This will help landlords avoid protracted proceedings and unnecessary costs if they have to pursue the claim through the courts. Some debtors are guilty of ignoring such claims hoping it will go away but reaching out and communicating can make a big difference in how quickly claims can be settled.