Creditor Action – Where are we up to?

Beverley Budsworth – The Debt Advisor FCA regulated Debt Solution Provider

Judgments increasing against consumers

Judgments in first quarter of 2021

Judgments against consumers have increased by 21 % above final quarter of 2020 but still below quarter 1 2020. Average judgment debt has risen from £750 to £807. The introduction of Breathing Space for individuals on 4 May 2021 which gives 6 weeks of protection against creditor action during which consumers must seek debt advice is likely to see judgment and enforcement action slow up further.

CCJ’s against businesses are 55% lower than in Q1 2020. For the past 3 quarters the numbers have been around 15,000. According to Registry Trust, North West businesses saw the steepest rises – up to 23% from Q4 2020 but still lower than Q1 2020 by 42%,

FCA lifts ban on repossession of Goods, Vehicles and Properties

The FCA confirmed from 31 January 2021 the ban on repossessing good and vehicles was lifted. The ban on repossessing properties was extended until 31 March 2021. From 1 April 2021 lenders can repossess properties but the FCA has warned lenders to treat homeowners fairly. Again Breathing Space can prevent   such actions from continuing but there will have to be sensible plans put forward to deal with mortgage arrears.

Commercial landlords

The UK government announced on 23 March 2020 that commercial landlords are to be precluded from forfeiting commercial leases and evicting the tenant for non-payment of rent. This measure was subsequently extended until 31 December 2020 and then further to 30 June 2021. On 16 June 2021, the Government announced its intention to extend this moratorium by a further 9 months until 25 March 2022.

Action by Private Landlords and Bailiffs

The stay on possession proceedings expired on the 20 September 2020. This means landlords can pursue possession proceedings through the court.

Between 29 August 2020 and 31 May 2021, with the exception of the most serious cases, landlords needed to give their tenants 6 months’ notice before starting possession proceedings.

From 1 June 2021, notice periods must be at least 4 months in most cases, including where the tenant has less than 4 months’ rent arrears.

From 1 August 2021, the notice period for cases where there are less than 4 months of unpaid rent, will further reduce to 2 months’ notice. Notice periods for the most serious cases, as set out above, are lower with most requiring 2 or 4 weeks’ notice. The notice period for ‘serious arrears’ is 4 weeks’ notice and the threshold for what constitutes ‘serious arrears’ is ‘arrears equivalent to 4 or more months’ rent.

Up to 31 May bailiffs could not serve eviction notices or carry out evictions but there were exceptions for the most serious circumstances that presented the most strain on landlords.

The restrictions on bailiff enforcement will end at the end of 31 May, reflecting the improved public health situation and easing national restrictions. From 1 June, bailiffs can send out eviction notices and enforce evictions. Given the requirement to provide 14 days’ notice, no evictions are expected until mid-June, except in the most egregious cases and bailiffs have been asked not to carry out an eviction if anyone living

Guidand to Landlords and Tenants

The government has issued guidance to landlords and tenants which relate to the private and social rented sectors. The guidance covers guidance on rent, mortgage and possession proceedings as well as health and safety obligations, repairs and inspections in the light of Covid.

Shelter have produced very helpful information for tenants including:-

• A Tenancy Rights Checker
• Housing Advice which covers homelessness, private renting, eviction, tenancy deposits, repairs, benefits, council housing and mortgage repossession
• Housing Advice – Covid 19
• Covid 19 – protection for tenants

Facing a Judgment as a consumer

If you are a consumer facing judgment action, don’t forget there is Breathing Space available through FCA regulated debt advice providers including The Debt Advisor. The link provides detailed information on who Breathing Space can help, what debts are covered and the process. Our team are available on freephone 08000851825.

There is also very helpful advice on dealing with judgments at National Debtline.

Help for Businesses

As a business if you are struggling to deal with your debts, there are a range of possible solutions which are detailed at The Business Debt Advisor. The options depend on whether your business operates as a sole trader, partnership or limited company.

It’s vital that you feel comfortable speaking to someone who will ensure that they fully understand your businesses circumstances before making any recommendations. Certainly if any organisations requests

The Debt Advisor which includes The Business Debt Advisor have been advising individuals and businesses for over 21 years. Doing the Right Thing is vital for your clients and this starts with ensuring that they get “whole of market” advice on the options available to them.

The Debt Advisor Ltd is authorised and regulated by The Financial Conduct Authority, number 659920. This means we are able to offer debt advice and deliver both formal and informal debt solutions. There are sources of free debt advice and services. You can find out more by contacting the Money Advice Service on 0800 138 7777 or by visiting their website.