Credit and Debt

Credit and Debt

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Putting a hold on enforcement

In the immediate term, subject to getting your client’s instructions to do so, you should contact the creditor and ask them to put a hold on any further enforcement.

Remember to consider how old the debt is first and, if the debt might be statute barred, don’t acknowledge it in writing and remind the client not to make any payments until you have confirmed this.

How best to get the creditor to put a hold on enforcement will depend on whether it is a credit contract or another consumer contract.

 

Non-credit contracts

If it is not a credit contract (for example it is a debt to a telecommunications company or a utilities company), contact the hardship team of the relevant company, inform them that you are acting for the client who is experiencing serious disadvantage and you are in the process of obtaining further instructions.  Ask them to put a hold on any enforcement . 

You can use this template to do this.  If you do this by phone, make sure you take a file note of the date and time of your call and of the name of the person you spoke with.  You should also ask that person to make a note of your conversation on the system and get them to read it back to you.

If the company does not agree to put a hold on enforcement, you should consider lodging a complaint with the relevant EDR scheme.  Refer to External Dispute Resolution for more information on how to do this and for the contact details of industry based EDR schemes. 

 

Credit contracts

If you are dealing with a credit contract (for example, a mortgage, credit card or personal loan), and your client has been given a Code compliant default notice, you should request postponement of enforcement proceedings under section 94 of the Code.  This must be done within the period specified in the default notice, which cannot be less than 30 days. 

You can use this template letter to do this.  The creditor then has 21 days to give notice of whether or not they agree to negotiate a postponement.  If they do not agree to negotiate a postponement, the notice must provide the reasons for not granting it, the name of the relevant EDR scheme and the person's rights under the EDR scheme (section 94(2) of the Code).  

If you are able to negotiate postponement and the client complies with the postponement notice, the default notice or demand for payment will, for the purposes of the Code, be taken not to have been made.  The creditor must provide notice of the negotiated postponement (including its terms) within 30 days of reaching agreement (section 95 of the Code). 

If you are unable to negotiate a postponement, you may be able to apply to the court for a postponement under section 96 of the Code.   Before doing this, though, you should lodge a complaint with the relevant EDR scheme, which will result in a hold being put on further enforcement until the dispute is resolved.  Refer to External Dispute Resolution for information on how to do this.