Help!!! I Can't Pay

Even if you cannot afford to pay the judgement amount you must do something about it.

The Full Amount

If you have been ordered to pay the full amount of the debt in one go, 'in full' ,or by instalments you can't afford you can ask the court to vary the order and reduce the instalments. This is called a variation order and you must use Form N245 to ask for the amount to be varied.

Form N245 can be obtained free from any county court office. There will be a fee to apply for a variation order, which is £35.00( date 13/02/06). In some circumstances the fee can be waived in full or part e.g if you receive social security or are on a very low income.

You must fill in all the details about your income and spending, and then make the court an offer of payment based on your disposable income. ( Your income minus your expenditure.) Write in an amount you can afford to pay, if you offer too much and fall behind on payments the court maybe asked to take steps to enforce the judgement.

Send the form to the court, (keep a copy), and the court will send the form to the claimant, who will decide whetther to accept your offer of payment.

If the claimant accepts your offer the court will make an order for the instalments to be paid in the amount you offered.

If the claimant doesn't accept the offer the court will look at the information on Form N245 and decide how much you should pay. You will then be told how and when to pay.

If you still think you will not be able to meet the payments you can ask the court to reconsider the order. You must write within sixteen days of the postmark of the variation order. Explain the reasons why you cannot pay the amount ordered by the court.

The court will arrange a private hearing for you and the claimant before a district judge. This will be heard in a court local to you. This hearing should be attended.

The court will then make an order for instalments that you can afford to pay.

If in the future your circumstances change, your income is reduced or your spending increased, you can use this proceedure to apply for a new variation order.

I Have No Income

If you have no income you can request the court's permission to pay nothing for the time being. This is called a 'stay of judgement or execution' . Ask for Form 244, which is free, from your local county court office. Fill this in, giving your reasons and send it to the court. (Keep a copy). There will be a fee for this. The court will arrange a private hearing for you and the claimant to discuss the matter before a district judge.

If You Do Not Pay

If you do not pay anything once the judgement has been received, or fall behind with your payments, the claimant can ask the court to enforce the judgement. The claimant is charged for this and the cost will be passed on to you.

By doing nothing you will more than likely have to pay more later.

The claimant can try to obtain the money owed in several ways. Either by a warrant of execution or an attachment of earnings order.

Warrant of Execution

A warrant of execution allows a county court bailiff to visit your home or business to collect the money owed or to determine whether you have goods to the value of the debt owed.

If you cannot pay the bailiff will assess the value of your belongings to determine whether they can be sold at auction.

The claimant will usually send a letter saying you must pay the amount on the warrant to the court within seven days. If you pay, the bailiffs will not visit you.

If you can pay the warrant within two to three weeks the bailiff may not take your belongings.

If you genuinely need more time to pay you must fill in Form N245, available from your local county court, and ask for the warrant to be suspended and for an instalment order to be put into place. This procedure is the same as for a variation order. (see above)

Attachment of Earnings Order (AEO)

An AEO is sent to your employer. It will tell your employer to deduct money from your earnings and send it to the court. The claimant is then paid.

If the claimant asks for an AEO, you must,

a) pay the full amount immediately

b) fill in a statement of means form detailing information about your employment, income and spending.

Inform the court if you are:

Unemployed
self-empoyed
in the armed forces
a merchant seaman

An AEO cannot be made against you if you are one of the above, but you must provide proof.

You must fill in the statement of means and send it to the court immediately. If you do not, the court can send you to prison and may contact your employer to discover your earnings.

A court officer will determine if an AEO can be made against you and how much you can afford to pay. The officer will consider living expenses and regular bill payments, this is your protected earnings rate. If you earn more than this rate the court will make an AEO.

The court will then send the order to you and your employer giving the details. Your employer is allowed to deduct £1 each time they take money from your wages to cover expenses.

If you do not want the court to send an AEO to your employer you can use the statement of means to ask the court to suspend the AEO. You must say you want the court to suspend the order and if they agree the court will tell you start making payments direct to the claimant. If you do not keep up these payments the court will send the order to your employer.

If you already have an AEO you can ask the court to consolidate the orders. This means your employer will make only deduct one payment from your wages to cover all the orders. You will only have to pay £1 to cover your employers expenses. The court will charge a fee to look after the consolidated order for you. This will be added to the money you owe.

Other Types of Enforcement

The claimant could also ask for a third party debt order or a charging order. Both of these will involve a hearing.

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