Finance Q&A

UK debt collection ... ... the money from my pocket ... ?

Q. ... but not from the debtor's! (Apologies to the Welsh group (whose name I can't remember) who sang that London sucks ...) I find myself in the unenviable position of being a judgement creditor. Yes, the court gave a judgement in my favour, but now I'm faced with all sorts of bills if I want to collect the money that I'm owed. It seems that debtors can walk away, leaving creditors with lots of bills and nothing is done about it. So I've been thinking, and I've come up with the following list for serious discussion: Debt collection problems (1) The courts should enforce the orders for information: as it stands, according to a solicitor to whom I spoke, a person with a website who won a judgement but can't enforce it, and the court staff themselves, nothing is done to check on the stuff debtors say when they give information. They can and do declare themselves to have no property, no bank accounts, no anything, when it isn't true. A judgement debtor should be made to bring in original documentation that supports what he says about his finances and this should be checked against his tax records. If a judgement debtor can't support what he says with original documentation, that should be grounds for arrest. If there isn't enough room in prisons, then tag the debtor and make him have to report to the police once a week. (2) There should be an order that could be made against the debtor's National Insurance number, that, for a specified length of time, say six months or even a year, that would allow a creditor to take money from any bank account that the debtor has. Further, all a debtor's property should be tied to some identification number so that, say, if he hasn't any money in the bank, but has a house, the order would allow the creditor to put a charge against the house. As it is, the creditor has to find out, by himself, whether the debtor has property and has to find whether the debtor has a bank account or is owed money. Further, the third party order only freezes the bank account for a short period of time and if the creditor guesses the wrong time to use the order, he won't get any money: this is just an obscene lottery. (3) There should be a national register which shows the number of successful claims made against businesses and the number of complaints made to Trading Standards against businesses. Bad or incompetent businesses should not be able to hide their deeds behind the Data Protection Act. Bad management practices in this country will not change until we stop letting bad managers get away with things. (4) People should not be allowed to 'max out' their credit cards, etc, then go bankrupt: from my reading of the new bankruptcy law, the behaviour of a person right before bankruptcy is now taken into account, but from what I have seen on uk.legal, the CAB still advises people to 'max out' their credit cards, etc, so I am not certain whether this part of the law is being enforced. If it isn't, it should be. (5) Claims involving unfair contract terms or business practices should automatically be referred to the OFT if the claim is won. As it is, the OFT only finds out about such claims if someone makes a separate complaint to the OFT. Further, The OFT should be given much more power to stop businesses that are using unfair contract terms. As it is, the OFT can find that almost all of a business' terms are unfair, and the business sends a letter to the OFT saying the terms will be withdrawn (an informal undertaking) and then waltzes off and uses exactly the same business terms with impunity. (6) Bailiffs have, as I understand it, the power to force access to business premises but not to individual debtors' homes. Sole traders who work in their homes should not be able, if the debt is incurred through their business, to hide behind the individual debtor's home rule. They must not be able to behave like a business when that's advantageous compared to being an individual, and also behave like an individual when *that's* advantageous. If it's a business debt, business debt recovery rules should apply. General problems with courts (1) Courts should also start enforcing the statements of truth on court forms: those found lying on the court forms should be done for perjury. As it is, an individual can say anything on a court form and nothing is done about even obvious lies. (2) Small claims brought by a consumer against any business, whether or not it is a limited company, should be heard in the consumer's court. As it is, a consumer who has a claim against a sole trader has to go to the sole trader's court, as if that trader were simply an individual and not running a business. This tends to make it expensive to bring claims against businesses that are not limited companies, and thus limits the ability of consumers to redress problems. (3) The outcome of small claims cases should be published in local newspapers and on a website. (4) If an individual, either claimant or defendant, doesn't show up to a hearing, unless they have provable good cause, they should be fined for wasting the court's time. Yes, I realise that not showing up almost always means that the side who does the no show will lose, but given that the court has much more powers to collect its fines, this power might concentrate the minds of those who fight a claim all the way and then just don't show up in court, which wastes everyone's time. Let me know what you think.

A. Ok, that first bit sounds just about ok. Though I would insist that once information is accepted, the creditor should stick with it. Not keep badgering people when info has already been supplied aboout finances. Any idea how that would affect priority debts? I'm fairly sure the priority people (mortgage/rent, council tax, utility bills) would want their money first. Take before they get their hands on it, and you could cause a whole host of problems. Not come across that as such. But complaints are perhaps useful, maybe with time limit? People tend to max out anyway before getting into difficulty. Using one lot of credit to pay other lots. Been there, done that. If you are about to go bankrupt, its very unlikely you'll have hundreds or thousands of pounds available to spend on cards anyway. Who are the biggest unfair terms or business practices companies? Seems like the banks and credit card issuers are at or near the top of the list. Good idea though. Simpler to just say that people can't work from home. Simple solution - I'll work from the car. Seriously though - many businesses do not need seperate premises - it would be expense thats unaffordable or not needed. No easy solution - as any forcing of home premises used for business would be open to being increased to forcing into any home. Spreading the effectiveness of the third party order over a period of time actually makes the order *more* compatible with priority debts. As I understand the third party order, it arrives at the bank (say) and they hand over whatever part of the debt is available to be handed over straight away. If that means that the direct debit for the rent / council tax / phone bill / etc. bounces the next day, tough. The change I'm proposing could be structured so that the third party order somewhat resembles the current attachment of earnings order.

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