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Monthly Archive for August, 2009

What is county court judgement or CCJ – Advice and Tips

Published on August 28, 2009 in Get Out of debt. 0 Comments

County Court Judgements (CCJ) and County Court Claims can be used by creditors to claim the money you owe them. But don’t get panicky if you receive a CCJ or County Court Claim. This is just a fair process where the Court will decide whether you actually have to pay the amount or not and how you will repay it.

Different orders for county court judgement enforcement:

  • CCJs can be enforced by “Warrant of Execution”. This is issued by the district Judge and it aims the debtor’s assets which can be confiscated. But note that articles or equipments such as books, vehicles and other necessary items are not seized.
  • County court judgement enforcement is possible with a “Charging Order”. This order is imposed on any property of the debtor as mentioned in the order.
  • CCJs can be implemented by an “Attachment of Earnings Order”. In this case the Court can give instructions to the debtor’s employer to deduct certain amounts from the debtor’s salary and pay them to the court. During this an amount of £1 is also deducted for administration costs. For this the employer needs to give the debtor a written statement of the total amount deducted. ‘Earnings’ comprise overtime payments, bonuses, commission and fees.
  • To enforce CCJs, “Garnishee Order” can also be used. Garnishee refers to a third party. Here the third party has to repay the creditors a debt he owes to the debtor.

Once a CCJ is issued, it gets registered in the ‘Register of Judgements and Fines’. Thus CCJ may be a reason why your credit was refused last time. Most creditors go through your financial history obtained from credit reference agencies before lending. These credit reference agencies keep details of CCJs from the ‘Register of Judgements, Orders and Fines’.

ccjs

Creditors are enforcing County Court Judgement against you?

If Creditors enforce County Court Judgement against you, you will receive a CCJ form. This form will give you the details of the amount of debts you owe your creditors. Check out these court forms:

  • N1 CPC claim form reflects creditors’ claim.
  • N9 Acknowledgement of Service is generally used to request for another 14 days to file a defence.
  • N9A Admission form is used in case you admit the claim but want some more time to pay. Here you will have to enter your income and expenditure for the court to determine how much you should pay.
  • N9B Defence form is used to defend your claim
  • N 244 Stay of judgment is used to cease the judgment from being enforced
  • N 245 Application is used for suspension of a warrant and/or variation of an order. This form is used to ask the court to reduce the amount in case you fail to pay what has been ordered.
  • EX 160 Application is used for a fee remission: This form is used to ask the court not to charge you a fee.

You can choose from five options to repay if a CCJ has been issued:

  • Pay the total amount along with the interest and court fees in case you do not wish to simply return the forms. You need not worry about any court hearing or a CCJ being recorded against you.
  • In case you want to pay later on or in instalments, you need to fill out the form mentioning your payment procedure. Thereafter a CCJ will be issued.
  • If you find out that the money you owe is less than the claim, send the form with your explanation. You should pay what you owe and not more than that. The court will decide as to who is right- you or your creditor. In case your creditor is right, a CCJ will be issued against you.
  • In case you think that you have no debts, you need to return the Defence Form to the court with an explanation. For more time, you can fill up the ‘Acknowledgement of Service’ form.
  • If you have any claims against the creditors, you can fill up the counterclaim form.

CCJ’s Procedure:

CCJs are common and simple court procedures. Once the creditor has made a claim, make sure that it is correct. If you can afford to pay the amount then pay back within a month or else the CCJ will get registered with the Register of County Court Judgements and credit reference agencies will record this in your file. However you can also pay off later.

CCJs will stay in a file for 6 years irrespective of the fact whether it is satisfied or not. In case you cannot pay, ask the court to defer the order by filling up the N245 form. The court will ask for your income and expenditure (known as means enquiry). For this, the court will charge you a £30 fee (payable to the courts) for submitting this application.

How to pay?

You will have to deal with a solicitor or a representative of the claimant. You will find the name and address of the claimant in the Judgment form. Ask the claimant about the payment method. It might be so that the claimant will hand over to you a paying-in book or set up a standing order to get the money transferred to him from your bank account. The court will never accept your payments.

Make sure you make your payments in cheques or postal orders. Avoid cash payments as there will be no proof of your payment. In case you are opting for payment through instalments, you can use the ‘Record Sheet’. For this visit HMCS (Her Majesty’s Court Service).

The Judgments are recorded on the Register of Judgments, Orders and Fines. Your name will be there on the Register for the next 6 years unless you pay your debts within one month of the judgment date.

How to remove your name from the Register of County Court Judgment (CCJ)?

An entry into the Register of County Court Judgment is removed if a judgment has been suspended or changed due to an appeal or because the claims have been paid within one month. In this case the court sends a ‘Notification of Cancellation’ to the Registry Trust within three days of the CCJ order. After this, the entry is deleted from the Register as well as the credit reference agencies’.

However, once the debt has been paid off, you can apply to amend the entry and deem it as ‘paid’. In this case, the entry does not get removed from the register but is marked as ‘paid’ or ‘satisfied’. This remains on your credit file for the next 6 years.

If you are from England and Wales, you can get a ‘Certificate of Satisfaction’ from the County Court. This can be obtained with a fee of £10. You also need to get a letter from your claimant saying that you have paid.

There are leaflets that will help you with court fees remission and how to pay them. These are issued by Her Majesty’s Court Service. They are:

What to do if you cannot pay the amount?

Once the claimant accepts your offer, the court will order for payment through instalments. In case, the claimant rejects the offer, the court’s decision as to how much you should pay is final. You can also ask the court to reconsider the order if you cannot pay. You need to write to the court within 16 days of the postmark on the varied order. Explain to the court the reasons behind you being unable to pay the amount asked for.

Now the court will call upon your claimant and you for a private hearing with the district judge. You can refer to the leaflet “EX20-Paying my judgment-what do I do?”

You can also ask for the court’s permission if you are unable to pay anything. This called a ‘Stay of Judgment or Execution’. For this you need to fill up a N244 form and ask for a stay of judgment. You need to pay a fee to apply for this order.

If you need more information on CCJs please write a comment here:

Avoid bank overdraft debt

Published on August 14, 2009 in Personal Finance. 1 Comment

An overdraft is a service offered by banks that enables a customer to continue writing cheques or make withdrawals even when there is not enough money in the account. Once you are overdrawn, it will attract interest charges right from its effect.

There are two kinds of overdrafts:

  1. Authorised overdraft: This is one where your bank has agreed to allow you to have an overdraft at any time within an agreed period and agreed amount.
  2. Unauthorised overdraft: However if your account goes overdrawn without the bank’s permission or you exceed the limitations in an authorised overdraft, it is an authorised overdraft.

The bank is not obliged to give you an unauthorised overdraft. As a general rule, when you do not have an authorised overdraft in place, then any cheques or withdrawals for a sum higher than the amount available in your account can be ‘bounced’ – that is, the bank may not honour them and will probably make a charge for returning the item.

How do you get into debts because of overdrafts?

An overdraft can cost a lot. However it is difficult to estimate exactly how much will it cost. Most overdrafts are charged at variable interest rates. Different banks follow different charging periods and policies. There can be however certain alternatives:

  • A monthly management fee;
  • Charging only on the overdrawn balance;
  • A charge on all the cheques and transaction made during the period when your overdraft is due.

You must know that charges may be calculated daily, monthly, quarterly as well as annually. For going overdrawn, your bank will let you know in advance regarding charges and interest rates following the Banking Code. You might have to pay for:

  • Going overdraft without notifying the bank
  • If you cross the overdraft limit
  • For your loans falling into arrears
  • Or in case you want to change a fixed term product

Overdrafts generally have higher interest, at 18-19% on average, in comparison to slightly lower credit card rates. Credit cards can also only charge a maximum of £12 for overspending or late payments, while some banks charge over £30 for unauthorised overdraft spending.

Overdraft woes:

Most often people are seen resorting to overdrafts since it is too easily accessible. They can easily use overdraft as an income booster that will add up to the everyday figures. Overdraft is perhaps the easiest way to solve your current financial needs without anticipating the trouble you might be in later on. Very often people exceed their overdraft limits and fall a prey to hefty interest charges thus giving way to debts.

With the economic lay offs and downturn, consumers are complaining about increased overdraft charges. For people who can manage their finances an overdraft may be used only very occasionally, perhaps at Christmas or on holiday. For others such as students, part-time workers or those on low income, an overdraft is vital to keep the cash flow process ongoing. If you are such a person who is tempted by the thought of extra cash in the account then it is wise to stay away from overdraft.

So what can you do to reduce the total overdraft charge which appears on your bank statement?

Did you know that many banks will give you a free overdraft – up to a certain limit – if you actually ask them! The subject of overdraft fees is something which has caused major issues over the last couple of years, and the banks are now very keen to get their fee structures back on track.  They have been advised that their fees should be more transparent, easier to understand and above all the fee should fit the service.

Overdraft Trap:

Today the world is running on instant finance and so almost everyone is in debt. Since the last 20 years there has been a tremendous increase in personal debt all over the planet. When you consider that one of the recently grown markets in the finance industry was advice on Bankruptcy and Individual Voluntary Arrangements (before the rules changed), you may well get the picture.

There has been massive increase in overdrafts which incur a monthly charge as well as an interest payment.  Many of these will lead to personal loans when they get out of hand, or even push the customer towards the credit card market.  Once they fall in the tarp of the credit card industry, the ease with which a card can be used seems to appeal to the masses.  Slowly but surely larger and larger amounts are left unpaid at the end of each month, as slowly but surely the interest payments rise.

It is better that we become more careful while going overdrawn. There are many dangers associated with overdrafts:

  • Those who have an overdraft will use it at some stage every month
  • You will be dumbstruck when you actually check your overdraft monthly charges that include interest and monthly fee.
  • If you continue being in an overdraft, it might restrict you from moving elsewhere or opt for other offers in the sector.
  • Overdrafts have to be repaid if the banks demand. In case you are in a financial fiasco, just watch how the banks withdraw this service.

Managing your overdrafts:

Money that you owe to banks is basically a non-priority debt. This means you might not lose your home or be charged or imprisoned for not paying these debts. However bank penalties have become a common phenomenon in UK. It has been seen that most of the income of the people is eaten every month by bank penalties when they go overdraft. For an unauthorised overdraft, the bank will allow you to borrow a certain amount of money with interest paid to them. Generally the overdraft will be paid back the next time your monthly salary is deposited in the bank. However, if you go over your overdraft limit, bounce a cheque, or go into the red by way of an unauthorised overdraft, even by a few pence, the bank will apply a penalty. If you owe your bank money you can be dragged to the court by the bank and will be asked to repay the money along with extra costs. So if you owe your bank money then consider these small tips to save yourself:

If you still find it difficult to manage your financial stature, then do remember about the Banking Code in UK. This code is committed to look at your situation sympathetically and positively. This offers all kind of support in case of an overdraft debt.

The Financial Ombudsman Service (FOS) is a free, independent service which might be able to settle a complaint between a customer and a bank or building society. You can take your complaint to the FOS if you are not satisfied with our efforts to deal with it or if we have not completed our investigations within eight weeks of your complaint. The contact details of the FOS are as follows:

The Financial Ombudsman Service

South Quay Plaza; 183 Marsh Wall; London; E14 9SR

Phone: 0845 080 1800

Website: www.financial-ombudsman.org.uk

If you have any enquiries about the Code, you should contact the British Bankers’ Association, The Building Societies Association or APACS. Here are the details:

British Bankers’ Association

Pinners Hall; 105-108 Old Broad Street; London EC2N 1EX

Phone: 020 7216 8800; Fax: 020 7216 8811

Website: www.bba.org.uk

The Building Societies Association

6th Floor, York House; 23 Kingsway; London WC2B 6UJ

Phone: 020 7437 0655; Fax: 020 7734 6416

Website: www.bsa.org.uk

APACS

Mercury House; Triton Court; 14 Finsbury Square; London EC2A 1LQ

Phone: 020 7711 6259; Fax: 020 7256 5527

Website: www.apacs.org.uk

Tips on Compiling Expenditure Lists and debts in Bankruptcy

Published on August 3, 2009 in Bankruptcy. 1 Comment

This article covers probably one of the most important subjects to address when considering bankruptcy. One of the hardest things I found to contend with after declaring myself bankrupt was the endless forms which needed filling in.  Now, bear in mind, you may well be operating on autopilot after your mind numbing experience in the bankruptcy court and the last thing you want to deal with is a lesson in math, a full on heated discussion with your partner about who spends what and even more horrifying the reality of what life really costs – the truth? You are in deficit before you start.  But do not panic.  This is in fact a bonus.

This article is written by Joanne Wood who declared herself bankrupt in February 2006. From the age of 17 Joanne worked as a court reporter at the Central Criminal Court. She is the author of Bankrupt 130 of 2006 – a remarkably candid account of what happened to a family after bankruptcy.

You will not be required to pay an income payment order (IPO) for up to three years if there is no cash left in the money pot – Income Payment Order is a regular contribution paid to your creditors at the instruction of the Official Receiver. This order is imposed if you have excess money in your bank account after all domestic expenses have been deducted.  So, let’s get this right first time around and, yes, I know you are tired, have no spare time to design flow charts, spreadsheets or so to speak, but if you balls this up then you will have to deal with the consequences – the end result will always be less food on the table.

This is not complex.  All you need is a piece of paper, a pen and the patience of a saint.  No, I am not being condescending. I have been there.  You may be in shock. But trust me, you are now in control.  You are making the financial decisions for the next year.  Just jot down everything in your life.  No, it might sound silly but just record it.  You have not done anything wrong. Just because you have declared yourself bankrupt doesn’t mean you stop functioning.  List everything:  the pet food, the nappies, the chocolate treats, whatever.  This is your life and you have a life to live it. You will not be allowed everything, but make sure you list more than you need.

Below are just some of the things I want you to consider when you are confronted with these forms.  It’s Okay.  Just be honest. Write it all down.  It is just a process of elimination for the Official Receiver. At the end of the day it is just too much chocolate or too much toilet roll. Seriously, that’s all it comes down to and even more seriously, I have put both these luxuries back on the shelves in my bankruptcy period. You are fighting for every penny.  Be strong. You have a family to feed.

The individual lists below are just a few ideas of how to confront your own personal situations.

Try to adapt these to your own lives.  It is paramount that you remember everything.  And if you are a self-employed person make sure you remember all of your work outlay, even down to the box of staples or light bulbs in the office.  You are entitled to work and the Official Receiver encourages this.

Checklist (For Bankruptcy Only) – The moment you have decided to lodge a bankruptcy petition you must:

Filling in Forms: Checklist

  • Open every bill and face the truth.
  • Cancel every direct debit in the bank/building society – this will save you charges when they bounce the standing orders, direct debits, etc. – this course of action is also suitable for anyone in a lot of debt, whether considering bankruptcy or not. Bank charges can be the final nail in your coffin unless you take control. The earlier you take this course of action the better it will be on the overall loss.
  • If you owe the bank money (overdraft), open another account elsewhere (this will probably have to be a basic building society account) and pay your wages into this account. This way you can control who you’re are paying and the bank will not be able to take all your money before you can get your hands on it.
  • Only pay your mortgage, pensions, and buildings and contents insurance. Utilities at an absolute last minute, if the bailiffs are due round. Do not pay any more credit cards or loans or separate endowment policies.  It is a waste. Fill up the freezer; buy a second freezer if necessary – you may have more mouths to feed than we do.
  • You must ring and book your court dates (these hearings will probably be heard at the county court – ring your local council for details on where the hearings are held and ask for the phone number.) Do this immediately. If you are fortunate enough to win the lottery in the meantime you can always cancel the petition hearing at the last minute. The courts are so busy now it could take several weeks. Ask for the forms to be sent to you via post.
  • Spend a lot of time on these forms. Get it right the first time. Fill them in with a pencil first and then in ink as there is a lot to it and you do not want to have to do this again. Keep photocopies of every form you fill in and your list of expenses for future reference. Keep every document/information leaflet sent to you for the full period of your bankruptcy. If you do not understand any of the questions on the form ring up the court and ask for assistance. These forms have to be completed and taken with you on the day of your hearing with your cash payment. A representative will briefly look at them.

Listing your debts

– these will be the first forms to arrive and need to be competed before you arrive at court.

All unsecured creditors must be listed: everything before the date of bankruptcy dies. Make sure you inflate all the sums owed in case you have forgotten any extra interest. When all was said and done, I had added another £20,000 onto the total. It doesn’t matter if that sum is inflated. Whether you go bust for £12,000 or £112,000 makes no difference. At the time of our hearing, I was concerned about the figure. Now I could not care if it had been £1 million, it changes nothing: you are a bankrupt.

You will be asked to supply:

  • the name of the creditor (the person you owe money to)
  • the creditor’s address
  • your account number
  • the creditor’s phone number
  • the amount you owe – do not forget to add the monthly interest for every month that passes before your hearing date; it soon adds up

You may be lucky and get an early date. Otherwise you may have to wait a couple of months, depending on where you live. If you can use a computer, list all your expenses on a spreadsheet and let the computer do the sums for you. Keep a copy on file if you can.

Look, you are going bankrupt. It is a big price to pay. Try and clean the slate.

The Unsecured Creditors:

(companies or people who do not have a charge over your house)

  • credit card companies
  • loan companies
  • business suppliers
  • utility suppliers: gas, electric, water
  • council tax
  • inland revenue arrears (inflate this amount if you are self-employed because you have no idea what your tax bill is going to be. These are always estimated above what you generally owe. Try and calculate what your next bill would have been for the previous year’s earnings and add it to the overall amount. You won’t have any money to pay it later)
  • outstanding VAT and custom and excise penalties
  • tax credits that you may have been overpaid
  • anyone else you owe money to

The Expenditure Form:

- this may not arrive until after the hearing. Take the whole day out. Send the kids to grandma – you need to be able to concentrate, which will be difficult because you may be in a state of shock.

Expenditure Ideas:

The expenditure form is vital. If you get this wrong, you could end up paying £200 or more a month for three years. Do not be proud; list everything. Here is just an example of some of the things to remember – try to adapt this to your own lifestyles. There are probably dozens of items that are important to your existence – think long and hard on this particular subject. Do not worry if this list exceeds your income. You are going bankrupt and, like many, are already having to live beyond your means to survive basic living costs:

  • the children’s music lessons
  • school dinner money per child
  • school trips, especially for GCSE courses (these can cost up to £500), school donation (non-uniform) days, child’s pocket money
  • pet food, vet fees, pet insurance
  • eye examinations, prescription drugs, medical therapy, brace treatment for your children which in some cases is now not paid for by the National Health Service (approx cost £2,500); many dentists are now private; add up the basic cost of six-monthly check-ups for each of you and list them (ask for extra in case of treatment – beware, this is limited, but you can only ask)
  • dry cleaning, work clothes/uniform or shoes, replacement and repairs
  • child care fees
  • nursery fees
  • nappies/baby milk
  • special needs tuition
  • school uniform upgrades, school equipment such as calculators (schools insist on special maths equipment and the parents are expected to fund this along with appropriate reading material for children in secondary education)
  • MOT for the car, motor maintenance, especially if you use your vehicle for work, car tax, car insurance, parking permit, congestion charges, breakdown cover
  • mortgage and mortgage arrears (this is important because they are preferential creditors and have to be paid first.  If you think you may want to try keeping your home it is important to keep up these payments throughout the bankruptcy period otherwise you could be repossessed.)
  • arrears on secured loans (again these are important to avoid repossessing of your home during the bankruptcy period )
  • annual home boiler insurance or boiler maintenance
  • coal/logs for the fire/cash for the gas, electricity meter
  • private petrol (school runs, to and from sick parent/general)
  • shopping budget (do not be shy here; remember, if you do not socialise much, include your wine/cigarettes/take away food and chocolate stash in the total cost – the Official Receiver’s Office do have set allowances, but it varies on the amount of people living in your house; I had to point out that I had teenagers, one in excess of six foot, and would be grateful if they allowed adult portions when calculating my shopping budget – we all know how much teenagers eat. They did allow what they described as a ‘social allowance’, but as we had ceased entertaining ourselves, due to lack of funds, this seemed quite daft; basically, it was added to the shopping budget. Go all out here – you have nothing to lose; and remember, many unexpected expenses will crop up during the bankruptcy period and are always paid for out of this shopping allowance.)
  • TV licence
  • clothing per person per month
  • hairdressing for all of you (grooming is important for your job)

Yes, it is true. The Official Receiver will not allow everything. But you have got to live, and you do not want to be placed further into debt. And contrary to what I first believed at the time of my own bankruptcy, the OR is in fact quite human.

Remember the Office Expenses.

It is vital that you continue running your business. Multiply this by 2 if both you and your spouse are working.

  • showroom/office rent
  • phone lines/fax lines/computer hosting fees
  • computer technical support
  • electricity/gas/water and light bulbs
  • stationery/postage/photocopier ink cartridges for all machinery and copier paper
  • replacement for equipment, such as computer / printer / fax / copier / telephone / mobile
  • stock, depending on your business – perhaps kitchen / food / catering / joinery tools / equipment insurance
  • petrol / car / maintenance / AA car cover / parking costs
  • pay-as-you-go mobile phone / hands-free headset / phone charger / phone insurance
  • laptop computer for all working parties / insurance and protection cover
  • lunch expenses for you and your partner if you are both out working
  • railway / tube / bus expenses
  • broadband Internet costs for office
  • work suits, overalls or uniform and dry cleaning costs
  • accountancy fees
  • National Insurance stamps

Prepare letters in advance – leave unsealed; write to all creditors listed that you have gone bankrupt, and after your hearing enclose a copy of your bankruptcy notice and post as soon as possible; the Official Receiver is so busy it will take him weeks to contact everyone; if you do this yourself the phone will stop ringing sooner.

Also photocopy your bankruptcy petition; just in case there is a visit from the bailiffs, you can offer them the document and ask them politely to leave your property.

If bankruptcy is not the appropriate choice:

(use these lists as a guide only): Instruct an insolvency firm to deal with your affairs or, alternatively, someone who can advise a suitable remedy to your problems. Get advice from at least three separate firms if you can. The first consultation is normally free. Obtain as much free guidance as you can before making your decision. Also, ring the debt agencies, because they do offer useful tips, for instance, informal debt management agreements.

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