Time Orders - ask court to change the amount you pay each month - stop reposession

**Amethyst** · 27th December 2008, 22:23:PM

Re: Time Orders - ask court to change the amount you pay each month

When can you apply for a Time Order?

1) When a "Default Notice" or "Calling in Notice" or "Termination Notice" has been issued by your lender.

The lenders can issue a default or termination notice and call in the loan if you have fallen behind with payments. Once you have received this, you can make an application to the county court for a time order. The procedure and forms you need to use depends upon whether you have a secured loan, a hire purchase/conditional sale agreement or an unsecured loan.

There will usually be a fee to pay with your application.

2) When court action has been taken.

If a creditor has already started court action against you then you can still apply for a time order. The procedure and forms you need to use depends upon whether you have a secured loan, a hire purchase/conditional sale agreement or an unsecured loan.

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**Amethyst** · 27th December 2008, 22:25:PM

Re: Time Orders - ask court to change the amount you pay each month

What type of debts can you have a Time Order on?

Unsecured credit

If you have an ordinary credit agreement which is not a secured loan/second mortgage you would not normally need to ask for a time order to be made.

If a creditor has already taken court action, then you should apply to pay the judgment at a rate you can afford. You would do this in your Defence/Admission to the court. If Judgement has already been passed then you may apply for Redertermination of the installment amount.

The court should look at making an order for you to pay in instalments you can afford. Interest is normally frozen on court judgments for agreements under the Consumer Credit Act automatically.

You may want to ask for time order if a default notice has been issued but the creditor is refusing either to accept your offer of payment, or to freeze the interest.

If interest is still being added on to the debt and the creditor refuses to take court action then applying for a time order may be the only way to ask for the interest to be frozen. If the court makes a time order and you keep up to date with payments, a creditor cannot apply for a county court judgment to be made.

This means a judgment will not appear on the county court register or on credit reference agency files, although the creditor may have registered the default on your credit file already when you fell behind with the loan.

Secured Loans

A time order is most useful for this type of credit. You may use it to re-schedule a loan secured on your home in order to prevent repossession of your home.

You can apply for a time order once the default notice has been issued or if your lender takes you to court to ask for a possession order.

Hire Purchase/Conditional Sale agreement

When a creditor goes to court for a "Return of Goods Order" you can ask for this to be suspended on the condition that you pay a fixed amount per month. This will usually be to pay the normal monthly instalment plus an amount on top to clear the arrears. You can ask the court to make a time order if you cannot afford to pay the full instalments. The court will often make a court order to let you keep the hire purchase/conditional sale goods and pay off the agreement at a reduced amount without stating they are making a time order.

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**Amethyst** · 27th December 2008, 22:29:PM

Re: Time Orders - ask court to change the amount you pay each month

Time Order Legislation

Consumer Credit Act 1974
Section 129 Extension of time
1) If it appears to the court just to do so:-

(a) on an application for an enforcement order: or
(b) on an application made by the debtor or hirer under this paragraph after service
on him of:-

(i) a default notice or
(ii) a notice under Section 76 (1) or 98 (1); or

(c) In an action brought by a creditor or owner to enforce a regulated agreement or any
security, or recover possession of any goods or land to which a regulated agreement
relates, the court may make an order under this section (a "time order").

2) A time order shall provide for one or both of the following, as the court considers just:

(a) the payment by the debtor or hirer or any surety of any sum owed under a regulated agreement, or a security by such instalments, payable at such times, as the court, having regard to the means of the debtor or hirer and any surety, considers reasonable;
(b) the remedy by the debtor or hirer of any breach of a regulated agreement (other than the non-payment of money) within such period as the court may specify.

Section 136 (relating to power to vary agreements and securities)
The court may in an order made by it under this Act include such provision as it considers just for amending any agreement or security in consequence of a term of the order

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**Amethyst** · 27th December 2008, 22:36:PM

Re: Time Orders - ask court to change the amount you pay each month

DO I HAVE TO PAY A FEE FOR AN APPLICATION IN THE COUNTY COURT?

There will usually be a fee to pay with your application. You can ask the court not to pay the fee in some circumstances. The form you will need to fill in is called an EX160 'Application for a fee exemption or remission.' This form needs to go to the court with your main application. If the court agrees your application you will not have to pay the fee. If you pay a fee when you should have been exempt or would have qualified for a remission, then you have six months to apply to the court for a refund. See our guide to court fees

N244 application currently costs £65
N440 application currently costs £150

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**Amethyst** · 27th December 2008, 22:39:PM

Re: Time Orders - ask court to change the amount you pay each month

UNSECURED DEBTS

If you have an ordinary credit agreement which is not a secured loan/second mortgage you would not normally need to ask for a time order to be made.

If a creditor has already taken court action, then you should apply to pay the judgment at a rate you can afford. You would do this in your Defence/Admission to the court. If Judgement has already been passed then you may apply for Redertermination of the installment amount.

The court should look at making an order for you to pay in instalments you can afford. Interest is normally frozen on court judgments for agreements under the Consumer Credit Act automatically.

You may want to ask for time order if a default notice has been issued but the creditor is refusing either to accept your offer of payment, or to freeze the interest.

If interest is still being added on to the debt and the creditor refuses to take court action then applying for a time order may be the only way to ask for the interest to be frozen. If the court makes a time order and you keep up to date with payments, a creditor cannot apply for a county court judgment to be made.

This means a judgment will not appear on the county court register or on credit reference agency files, although the creditor may have registered the default on your credit file already when you fell behind with the loan.

1) How to apply before court action

If you have received a default notice or the creditor is calling in the debt and you have made an offer of installment payments which has been refused.

You need a claim form called an N1 which you have to fill in with supporting information called the Particulars of Claim. This form is available from your local county court or by visiting Her Majesty's Courts Service - Home

You also need a full personal budget sheet and details of your circumstances.

There will be a fee of £150 to pay with your application. This is because you are not claiming for money.

If you are on a low income or certain benefits you may not have to pay the fee. See Court Fees - all types and exemptions

The creditor can put in a defence to the court objecting to your time order application. There may be a hearing which you will need to attend and the judge will decide whether to make a time order in your case.

This would be useful to stop a company taking court action against you when you have offered to make payments you can afford. If you default under the time order the company can continue with obtaining a Judgment and order to pay against you.

2) How to apply after court action

If you have received a claim form (N1) from a creditor you can enter an admission / offer to pay. This will not cost you anything bar the court fees added to the claim by the creditor/court. You will complete the admission form and income and expenditure form to explain your circumstances and make an offer to pay by installments.

You can apply for a time order after your creditor has taken you to court by using a general court application form called an <table><tbody><tr></tr><tr><td>N244 </td><td> Application notice </td><td> (PDF 381KB)</td></tr></tbody></table>
There will be a fee of £65 to pay with your application unless you do not have to pay the fee.

You need to include full details of your circumstances and a full personal budget sheet with the application.

There may be a hearing which you will need to attend, where the creditor can object to the time order being made. The judge will decide whether to make a time order in your case.

If the creditor started action against you in a county court elsewhere you may need to apply for the case to be transferred to your local county court. You can do this on the N244 form and there will be a fee of £35.

What should you ask for?

If you cannot afford the full instalment you need to ask for the loan and arrears to be re-scheduled.
For the court to be able to make a time order you must be able to afford to make an offer of payment. The court will consider whether you can afford to pay what you have offered or if you are offering as much as you realistically can. If you need help with your income/expenditure forms please post in the debt forums.
The court has to look at the position of the creditor as well as your situation when deciding if it is "just" to make a time order. This means if you cannot make an offer at all or are unlikely to ever be able to pay off the loan the court may decide not to make a time order.
If you have asked for a new instalment rate but want to repay the debt within the same period of time then you can ask the court to change the interest rate, to allow you to do this. Also the interest may be so high that your reduced payments have no effect without reducing the interest. You will also need to ask for any default interest and charges to be frozen.
If you can afford to make the normal monthly payments you need to ask for a time order to fix payment on the arrears only. If you get a time order on the arrears only you may want to ask the court to reduce or freeze the interest in order to let you repay the debt over a reasonable time. This will be necessary where interest being added on to the arrears is the same or more than the amount you can afford to pay towards clearing the arrears.

Is it 'just' to make a Time Order?

Make sure you add any points that may help the court decide that your case is "just".

Was the reason you took out the credit a "good" one?
Could you afford the payments when you first took out the agreement?
Is your agreement very expensive or not appropriate for your needs at the time? Point out a high interest rate and how much you would have to pay back over the whole loan period.
Have you taken out further credit since? If so, was there a good reason for this?
Have you had a good payment record until the point you stopped paying?
What is the reason for your non payment? Have your circumstances changed? Explain the background to your situation.
Have you tried to sort out your problems and ask the creditor for a payment arrangement? (e.g. you haven't ignored the debt). If the creditor has refused to negotiate you need to point this out. Start making the payments you have offered as a gesture of good will.
Is your situation temporary and likely to improve in the future? The court is likely to want to make a time order for a time limited period.

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**Amethyst** · 27th December 2008, 22:47:PM

Re: Time Orders - ask court to change the amount you pay each month

Secured Loans

1) How to apply before court action.
A time order may be most useful to apply for if you have a secured loan. You may be able to use a time order to reschedule the payments on a loan secured on your home in order to stop repossession action. You can apply for a time order once the creditor has sent a default notice and called in the loan because you have fallen behind with the payments. You need to apply to your local county court using a court form called an N440. You also need to fill in details of your income and outgoings and personal circumstances on a "schedule".

There will be a fee of £150 to pay with your application. If you are on a low income or certain benefits you may not have to pay the fee.

There will be a hearing where your lender can object to a time order being made. It is up to the district judge to make a time order or refuse your application. If the time order is refused the lender could start possession proceedings to try to repossess your home.

2) How to apply after court action.
You can apply for a time order when your lender makes a possession claim against you in your local county court. You will be sent a form<table><tbody><tr><td>N5 </td> <td> Claim form for possession of property </td> <td> (PDF 232KB)</td></tr></tbody></table> by the court and need to fill in the defence form called an N11M. Tick BOX 6 to ask the court to consider a time order and send this to the court with full details of your defence, details of income and outgoings and personal circumstances. You can ask for the payments to be reduced and for the loan rescheduled if necessary.

There is no fee to pay with this application as you are just replying to a court claim. (Fees are added to the possession claim by your lender instead).
There will be a hearing where the lender can object to a time order being made. The district judge may decide to make a time order, suspend possession and allow you to stay in your home as long as you make the payments ordered. They can also refuse your application and make an outright possession order.

If you already have a possession order you can still make an application for a time order. You need to use the general application form called an N244. For details of the application process see the section on "unsecured credit".

What should you ask for?

If you cannot afford the full instalment you need to ask for the loan and arrears to be re-scheduled.
For the court to be able to make a time order you must be able to afford to make an offer of payment. The court will consider whether you can afford to pay what you have offered or if you are offering as much as you realistically can.
The court has to look at the position of the creditor as well as your situation when deciding if it is "just" to make a time order. This means if you cannot make an offer at all or are unlikely to ever be able to pay off the loan the court may decide not to make a time order.
If you have asked for a new installment rate but want to repay the debt within the same period of time then you can ask the court to change the interest rate, to allow you to do this. Also the interest may be so high that your reduced payments have no effect without reducing the interest. You will also need to ask for any default interest and charges to be frozen.
If you can afford to make the normal monthly payments you need to ask for a time order to fix payment on the arrears only. If you get a time order on the arrears only you may want to ask the court to reduce or freeze the interest in order to let you repay the debt over a reasonable time. This will be necessary where interest being added on to the arrears is the same or more than the amount you can afford to pay towards clearing the arrears.

Make sure you add any points that may help the court decide that you case is "just". Remember: the court must look at the creditor's position as well as your circumstances.

Was the reason you took out the credit a "good" one?
Could you afford the payments when you first took out the agreement?
Is your agreement very expensive or not appropriate for your needs at the time? Point out a high interest rate and how much you would have to pay back over the whole loan period.
Have you taken out further credit since? If so, was there a good reason for this?
Have you had a good payment record until the point you stopped paying?
What is the reason for your non payment? Have your circumstances changed? Explain the background to your situation.
Have you tried to sort out your problems and ask the creditor for a payment arrangement? (e.g. you haven't ignored the debt). If the creditor has refused to negotiate you need to point this out. Start making the payments you have offered as a gesture of good will.
Is your situation temporary and likely to improve in the future? The court is likely to want to make a time order for a time limited period.

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**Amethyst** · 27th December 2008, 22:47:PM

Re: Time Orders - ask court to change the amount you pay each month

What can the court do ?

The law has not been entirely clear on what the court's powers are when making a time order. Following a recent Court of Appeal case, time orders seem to apply in two situations:

Sometimes a time order can only deal with arrears, leaving the monthly payment unchanged, but with power to change the amount of interest being added to the arrears. This is the case if the lender has only issued a default notice but the whole loan has not been called in. This is unusual as under the terms of most agreements the whole loan is called in automatically on default.
Sometimes a time order can be used to change the whole agreement, setting lower payment and interest charges, and in certain circumstances stopping interest being added at all. This can only be done when the whole loan has been called in by the lender, where the loan agreement has automatically terminated on default or once possession proceedings have started.

It should be easier to ask the court to make a time order following a decision in the Court of Appeal in March 1995. The case is called Southern & District Finance plc v Barnes. This is very important as the court agreed that the whole amount of money owing on the agreement can be included in a time order. Also the monthly instalments and the interest rate on the loan agreement can be reduced if the court thinks it is just to do so, and it is needed to make the time order work.

As part of the case of Southern & District Finance v Barnes, the Court of Appeal also said that time orders should only "normally" be made if someone is in temporary financial difficulty. You may have to show that your case is not a normal one or there is a good chance of your circumstances improving. The court may well give a time order only for a limited period. You may have to ask for any exceptional circumstances to be taken into account to allow you to have a time order over a longer period. Argue that under Director General of Fair Trading v First National Bank (2001), making a time order over a longer period is possible if it "seems just in all the circumstances".
Anything you can say to show your situation is through no fault of your own will help when applying for a time order as the court will look at your payment record, how you got into debt and why you took the loan out.

Time Orders - ask court to change the amount you pay each month - stop reposession

Time Orders - ask court to change the amount you pay each month - stop reposession

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