FAQ on Debt law

 

What is a creditor?

A creditor is a person or business to whom money is owed by an individual. A creditor can take reasonable action to recover their money. For example, creditors may send reminders and demands for payment, or, they may visit the person’s house at a reasonable time of day. However, creditors may not harass people in debt by, for example, constantly calling them or demanding entry to their home.

What is a debtor?

A debtor is a person who owes money to one or more individuals or businesses. A debtor should prioritise debts which are urgent, and ensure to attend to those first. For example, if a mortgage is left unpaid, they could lose their home. If some types of debt remain owing, a debtor could face a prison sentence. A debtor can contact a specialist debt law solicitor for legal advice.

What is a county court judgment?

A creditor can take a debtor to court, usually a county court, in order to recover the debt. If an order to pay is granted against the debtor, it is called a county court judgment (CCJ). A CCJ may affect an individual’s credit rating adversely. Before starting court action, the creditor must send the debtor a warning letter or default notice.

What is security?

Security means something of value pledged as an assurance that a person will fulfil an obligation. For example, a person’s house can be offered as security that they will keep up repayments on a loan. If the repayments on a secured loan are not met, then the house could be repossessed by the lender.

What is debt collection?

Some creditors might use debt collectors to get their money back. A debt collector is a person or firm collecting money on behalf of the lender. Debt collectors do not have the same legal powers as bailiffs. A bailiff will usually have the authority of a court order to enter a home and take away specified possessions; these will be sold later to help pay off the debt, such a CCJ. However, items such as children’s belongings, clothing and any work vehicle cannot be taken from a home. Some creditors may sell the debt to a third party, but they must inform the debtor in writing of this action.

If you are looking for expert legal advice, please call us at 0800 1777 162 and let our experienced case handlers match you to the right attorney for your needs. More legal information can be found in the articles on the right-hand side.

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