Pre Action Protocol for Debt Claims – Complete Breakdown with Guide, FAQs & More

Are you being taken to court for a debt claim?

If so, you’ll want to know how you should be conducting yourself beforehand.

In England and Wales, the law specifies the conduct and behaviour it expects of both a creditor and a debtor prior to them appearing in court.

If you need more insight in this regard, you’re in luck! I’ve compiled a guide that covers just about everything you need to know about the protocol for a debt claim.

What is a Pre Action Protocol?

This is basically court-specified behaviour that parties subject to court proceedings are supposed to follow.

A protocol defines what both parties should do, how they should behave with each other, and what their terms of interaction should be, all before court proceedings start.

Their primary aim is to guide both the claimant and the defendant on what their interaction should look like before they’re brought to court. It specifies a set of steps that a person who plans to take someone to court should abide by.

Additionally, it may also specify certain information that should be mentioned in the letters exchanged between the potential parties.

What is the Protocol for a Debt Claim?

You should be concerned about the protocol regardless of whether you’re a creditor looking to take your debtor to court or if you’re a debtor who’s being taken to court.

Usually, the protocol applies when your creditor believes that you owe them but they’re looking towards court proceedings as a means of collecting the money.

As for the specifics, the protocol provides guidance on how a creditor and debtor are expected to interact with each other.

Additionally, it also mentions certain conditions you must fulfil before your debt claim is started in court.

If you’re a debtor facing this situation, here’s a bit of good news: the protocol was designed to help avoid court proceedings as much as possible. Court proceedings can take quite an emotional and financial toll on both parties involved.

When you’re a debtor, the last thing you need is a court proceeding that will further worsen your financial situation.

I strongly recommend that if going to court becomes unavoidable, you should try to behave as responsibly and fairly as you can. One way to do this is to cooperate with the instructions that the protocol lists and to avoid delaying tactics.

What is a Debt Claim?

A debt claim is basically a lawsuit that a creditor brings to court against a debtor in the event where they want to recover their debt and they want to do it through court action.

In general, if you’ve been notified by the court that there’s a debt claim against you, you have to try and respond as soon as possible if you don’t want to end up risking even more trouble for you.

pre action protocol for debt claims uk

How Long Does a Protocol Take?

Previously, debtors were allowed a minimum of 14 days and a maximum of 21 days in which they were supposed to respond to the debt claim letter.

Now, the timeframe has been extended and they are supposed to respond within 30 days from the date of the Letter of Claim. If a debtor does not respond within 30 days, the creditor has full right to initiate court proceedings.

To account for mishaps or the possibility that a debtor may not have mailed the response until the very end of the allotted period, it is a norm to start court proceedings a couple of days after the given period ends.

How to Reply to a Letter of Claim?

The reply form to a Letter of Claim has four different sections. Keep reading and I’ll cover them one by one and tell you what you need to know about each section.

Section 1

This section allows you to confirm your knowledge about the debt you owe.

You may state that you’re either unaware about how much you owe, that you owe some of the money, or that you’re sure you owe all the money as stated in the Letter of Claim.

Section 2

You only need to fill out this section if you’ve agreed in the previous section that you do owe some or all of the money being claimed.

The primary function of this section is to allow you to specify if you can pay the amount back as a lump sum or if you’ll be paying it back in instalments.

In the event that you choose to pay by instalments, you may choose to submit a statement of means with your reply form to show how much you can afford to pay.

I recommend that you contact a debt help organization if you’re not sure how to make your budget.

Section 3

I mentioned debt help briefly in the previous section.

If you’re looking to get debt advice related to your debt, you can mention it in this section.

Also, if the debt advice in question will take more than 30 days, you are required to mention the expected duration and the reasons why it will take longer than the initially specified period.

Section 4

This final section is intended to allow you to request the creditor to send you more details and documents on the amount of the debt.

It serves a dual-purpose, since you may send any details or documents to the creditor as well. One example of this would be to send the details of a payment that you know you’ve made but it hasn’t been taken off the amount of the debt.

What Happens if My Creditor or I Don’t Follow the Protocol?

There are certain consequences if you and your creditor don’t follow the procedure.

In the event that your creditor does not follow the debt protocol, the court may choose to reduce the interest you have to pay on the debt, assuming that the creditor wins the case.

If you keep disrupting the procedure, you may be asked to pay all the court costs. The same applies to your creditor. The party that does not follow the procedure has to pay for wasting the court’s time and effort.

Lastly, if you get a Letter of Claim and you don’t respond within thirty days of receiving it, your creditor is allowed to request the court to increase your debt. Do bear in mind that the chances of this happening are low if you agree that you do owe your creditor money.

This is still subject to court observation though. If the court feels that you haven’t followed the procedure as closely as you should have, it may increase the amount of interest you owe on the debt.

FAQs

Before I wrap up this post, let’s answer some of the most frequently asked questions related to this topic:

What is the time limit for a court claim?

As specified by the Limitation Act 1980, the time limit to bring a claim to court is six years.

However, if the debtor confirms that they owe money to the creditor in their response letter, it may reset the limitation period.

What should I do if I receive a claim form?

The first thing you should do is to check if the claim is addressed to you and if you haven’t received someone else’s claim form mistakenly.

The second thing you should do is to inform the court that you’ve received a claim form. Within this response, you should provide the details of the claim parties and claim number.

Do check to see if the claim form has a response form and the statement of means form. If not, request your creditor to send you the missing documents as soon as possible.

If you’ve been sent all the documents you need, you should fill out the response form based on what you think of the amount owed and other dealings between you and your creditor. The form will have multiple sections, each of which will serve a unique purpose.

How should you respond to a letter?

You should acknowledge a letter within fourteen days of you receiving the letter. Also, you should respond within 30 days of getting the letter.

As for the contents of your response, mention the facts that are agreed upon, the facts that are disputed, and the claim that you are unsure of. If you’re rejecting a claim, do mention the reason for the rejection.

Which documents should the letter include?

Other than the information sheet, the response form, and the statement of means form, the letter should include:

  • The most recent statement for the debt that informs the debtor of any extra interest and charges added over time.
  • A statement of account for the debt.

What if I receive incomplete documentation?

If you do receive incomplete documentation, you can request your creditor to send you more details and documents in Section 4 of the reply form to a Letter of Claim.

Wrapping it Up

Being called to court on a debt claim can be confusing and scary if you’re unaware of the details.

You’ve got to know what you’re in for and what you can do to manage your situation effectively.

I hope this guide helped you understand the current debt claim scenario and how you’re required to conduct yourself prior to the beginning of court proceedings.

If you need any more debt advice guidance on this topic, feel free to reach out!


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