Time orders on unsecured debt

Use this fact sheet to:

• find out what a time order is;
• understand how a time order can help;
• see if you can apply for a time order; and
• find out if you may have other options that can help.

What is a time order?

A time order is a way of asking the court to give you more time to pay a credit agreement if you have fallen behind with the payments.  It can change:

• the amount you have to pay each month; and
• how long the agreement will last.

In some cases, the court can also make an order to change the interest rate.

Why apply for a time order?

If you have an ordinary credit agreement, you would not normally need to ask for a time order to be made.

If a creditor takes court action, you can apply to pay the judgment at a rate you can afford.  The court should take this into account when deciding what order to make.  Interest is normally frozen automatically on court judgments for agreements under the Consumer Credit Act 1974.

However, you may want to ask for a time order and for an order to freeze interest if an arrears notice or a default notice has been issued, but your 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 your creditor refuses to take court action, 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 the payments, your creditor cannot apply for a county court judgment to be made.

This means a judgment will not appear on the Register of Judgments, Orders and Fines or on credit reference agency files.  However, the creditor may have registered the default on your credit reference file already when you fell behind with the payments.

Has the loan been called in?

Check if the whole loan has been called in.  See Has the creditor asked you to repay the whole agreement? later in this fact sheet.

What credit agreements are covered?

You can apply for a time order if your credit agreement is regulated by the Consumer Credit Act 1974.  Your agreement will be regulated if you borrowed less than the following amounts:

• £15,000 if you took out your credit agreement before 1 May 1998.
• £25,000 if you took out your credit agreement between 1 May 1998 and 5 April 2008.

There is no financial limit if you took out your credit agreement from 6 April 2008 (unless your loan was taken out for business purposes).

The agreement should have a heading that says: Consumer Credit Agreement regulated by the Consumer Credit Act 1974.

When can you apply for a time order?

There are three different situations when you can apply for a time order.

• When an ‘arrears notice’ has been issued.
• When a ‘default notice’, or a ‘termination notice’ has been issued.
• When court action has been taken.

When an ‘arrears notice’ has been issued by your creditor

From October 2008, your creditor must send you an arrears notice if you have missed two payments and owe at least this amount on your agreement.  If the payment is made weekly, your creditor must send the arrears notice if you have missed four payments and owe at least this amount on your agreement.  They must give you the notice within 14 days of this happening.  It should tell you:

• how much you owe under the agreement;
• how much the arrears are; and
• if any interest or charges are being added.

You can apply for a time order after you get an arrears notice.  You must write to your creditor and give them 14 days notice that you are going to apply for a time order.  In your letter you must include details of the offer of payment you are going to make in your application. Don’t forget to keep a copy of your letter, as you will need to show this to the court when you apply for a time order.

Has the loan been called in?

You need to check if the whole loan has been called in.  See Has the creditor asked you to repay the whole agreement? later in this fact sheet.

When a ‘default notice’ or a ‘termination notice’ has been issued by your creditor

Your creditor can issue a default notice or a termination notice to tell you to repay the loan, if you have fallen behind with payments.  Once you get this, you can make an application to the county court for a time order.  You don’t need to write to your creditor to give notice that you are going to apply at this stage.

When court action has been taken

If a creditor has already started court action against you, you can still apply for a time order.

How to apply for a time order

The next section explains how you can apply for a time order at different times:

• before court action;
• during court action; or
• after court action.

Applying before court action

To apply for a time order, you need to start a claim using a claim form called an N440, which you have to fill in with supporting information called the ‘particulars of claim’.  You also need a budget and details of your circumstances.  If you do not have access to the internet, contact us to get a copy.  The claim form should be taken to your local county court.

You will also have to pay a court fee, unless you are entitled to help. To find out if you can get help, see our Help with court fees fact sheet.

Your creditor can put in a defence to the court, objecting to your time order application.  There will be a hearing and the District Judge will decide whether to make a time order in your case.

Applying during court action

If a creditor has started court action against you, you can use the court papers your creditor sent to make a free application for a time order.  You might want to do this if your creditor tells you that they can charge interest after court action as well as before it.

Usually, interest on a Consumer Credit Act regulated agreement stops after a judgment is made.  This stops the debt increasing.  Where interest does not stop, you can ask the court to make a time order to stop your creditor being able to add interest after the judgment.

Filling in the form

There will be a reply form with the claim form on which to make your offer of repayment.  This is called the ‘admission form’ or N9A.  It looks like a budget and asks for similar information on income and outgoings. You can use My Budget to complete your budget. If you do not have access to the internet, you can contact us to get a copy.

In Section 11 of the form, make your offer of payment, based on what you can afford.  In the empty box at the bottom of this section, write the following words:

I ask the court to a) make a time order in the terms of my offer, and b) amend the loan agreement as a consequence, so that no further interest or charges are added after the date of judgment.

The witness statement

You should include an extra item, called a ‘witness statement’, with your N9A.  The witness statement should say that you are asking the court.

• to make a time order through its own powers under section 129 (1) (c) of the Consumer Credit Act 1974;
• to make the time order in the same terms as your offer of payment; and
• to stop any further interest or charges from being added under section 136 of the Consumer Credit Act 1974.

You should also include details of your personal circumstances, and explain why you got behind with payments.  Include any information that will help to explain why it is right and fair for the court to agree to your request.  You may find it useful to look at the Sample witness statement later in this fact sheet.

Send the completed N9A, your witness statement and any supporting paperwork to your creditor at the ‘address for service’ at the bottom of page 2 of the claim form.  Send a copy of the completed N9A, your witness statement and any supporting paperwork to the court, with a covering letter.  Explain in your letter that you are asking for a time order and have sent the original paperwork to your creditor at the address for service.

If your creditor agrees to your offer, but nothing happens about your request for a time order on the N9A, contact the court and ask what is happening about your request for a time order.  Contact us for advice.

Asking the court to reconsider

If your creditor refuses your offer, you may find that the court ignores your request for a time order.  The court will decide what you should pay if this happens.  As long as there has not been a hearing, you can ask the court to look again at your request by writing a letter to the court within 14 days of its delivery (‘service’) of the judgment. You may be able to contact the court by email instead of sending a letter. Check with the court before sending an email.

The date of service is normally on the second working day (for example, not a Saturday, Sunday or bank holiday) after the date of the postmark on the envelope.

• In your letter, which should give your case number, ask the court to ‘reconsider its decision’ and to make a time order in the same way that you did before.  Give the same reasons why you think it should be granted and state that you would like a hearing.
• The re-determination will be done by a District Judge.  Where an order was made by the court staff, the District Judge can decide to have a hearing, or make a decision by looking at the papers.
• If a District Judge made the original order without a hearing, then the re-determination of your offer must be decided at a hearing.
• If there is a hearing, the case will automatically be transferred to your local county court so that you can attend.  The court will give you a hearing date.  You must go to the hearing, which should be in the District Judge’s rooms (in private).  Take a copy of your letter and all supporting paperwork.

Applying after court action

If your creditor has got a county court judgment, they might tell you that they intend to charge interest on the debt after the judgment.  If they do, you might want to apply for a time order to try to stop them from adding extra interest and increasing the debt.

You can apply for a time order after your creditor has taken you to court by using a general court application form called an N244. 

There is a fee to pay when you apply for a time order.  Depending on your circumstances, you may not have to pay it.  See Do I have to pay a court fee? at the end of this fact sheet and contact us for advice.

For more information about interest, see our Interest on a CCJ fact sheet.

Filling in the form

In Part 3 of the form you should state that you are asking the court:

• to make a time order under section 129 of the Consumer Credit Act 1974;
• to freeze interest and charges under section 136 of the Consumer Credit Act 1974; and
• to transfer the case to your local court, if necessary.

In the box for information in Part 10, state:

• your request for a time order;
• your request for the case to be transferred to your local court, if necessary;
• your offer of payment;
• that you are attaching a copy of your budget;
• a description of your situation;
• an explanation of why you got behind with payments;
• an explanation of why it is not possible for you to get to the other court, if appropriate; and
• any information that will help to explain why it is right for the court to agree to your request.

Make sure that you attach a budget to the N244 form.  You can use My Budget to complete your budget. If you do not have access to the internet, you can contact us to get a copy.

There will be a hearing, where your creditor can object to the time order being made.  The District Judge will decide whether to make a time order in your case.

Time order made by the court

A judge can make a time order on a debt regulated by the Act because it seems the right thing to do.  They can choose to do this:

• when a creditor has applied to the court for an order to enforce an agreement; or
• where the creditor has started court action.

The judge does not have to have received a request to make a time order.  However, you can ask the judge to think about making a time order in these situations by writing a letter to the court.  You may be able to contact the court by email instead of sending a letter. Check with the court before sending an email.

There is no fee to pay to write this kind of request.  Your request should:

• ask the court to make a time order ‘on its own initiative’ under section 129 (1) of the Consumer Credit Act 1974;
• ask the court to freeze interest under section 136 of the Consumer Credit Act 1974;
• include a witness statement; and
• a copy of your own budget.

You may find the Sample witness statement later on in this fact sheet helpful.

Check with your local court about how they might respond to such a request, or contact your local money advice agency to see if they can help you to make your request. 

Has the creditor asked you to repay the whole agreement?

Time order on the arrears only

Sometimes a time order can only help with how much you should pay every month towards the payments you have missed, leaving the ongoing monthly payments unchanged.

This might be the case if your creditor has only sent you an arrears notice (or in some cases a default notice), but they have not asked for repayment of the whole loan.  This is more likely where you have only had an arrears notice as, under the terms of most agreements, the creditor asks for repayment of the whole loan automatically when they send you a default notice.

Time order on the whole agreement

If you want to ask the court to reduce your payments on the whole agreement and not just the arrears, you may have to wait for your creditor to ask for repayment of the whole loan before making your time order application.

Sometimes a time order can help with how much you should pay every month on the whole agreement.  As a result of the time order, the court may also make an order to lower the rate of interest on the whole balance, or stop interest altogether.  This can only be done when the creditor has asked for repayment of the whole loan, where the loan agreement has automatically terminated on default.

Southern & District Finance plc v Barnes

It should be easier to ask the court to make a time order following a decision in the court of appeal: Southern & District Finance plc v Barnes. In this case, the court agreed that the whole amount of money owing on the agreement could 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.

Do you have to be in temporary financial difficulties?

In Southern & District Finance plc v Barnes, the court of appeal also said that time orders should only normally be made if someone is in temporary financial difficulty.  The court has not been clear about how to decide whether your difficulties are temporary or not. The court may only give a time order for a limited period.  You may have to ask for any exceptional circumstances to be taken into account, or show that there is a good chance of your financial situation improving, for you to get a time order over a longer period.

However, in Director General of Fair Trading v First National Bank, the court looked at whether you need to be in temporary financial difficulties to have a time order. They said that section 129 of the Consumer Credit Act 1974 allows the court ‘to make such order as seems just to it in all the circumstances’.

• Argue that in your case it is reasonable for the court to make a time order over a longer period.
• Make sure the court takes all your circumstances into account.
• Explain how your financial circumstances are likely to improve, even if this is some years away.
• Point out that in the Barnes case, one of the time orders was made over 15 years and that was considered ‘just’.

Anything you can say to show that your situation has occurred through no fault of your own will help when applying for a time order, because the court will look at your payment record. Make sure you show how you got into debt and why you took out the credit.

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?
• Was this loan not appropriate for what you needed when you took it out?
• Is your agreement very expensive?  Point out if the interest rate is high compared to other similar agreements, and how much this means you would have to pay back over the whole period of the agreement.
• 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 that 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 asked your creditor for a payment arrangement to show that you haven’t ignored the debt?  If your creditor has refused to negotiate, you need to point this out.  Start making the payments that you have offered to show goodwill.
• 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 only.

The court needs to look at your creditor’s position as well as your circumstances. 

If you think a time order may help your situation, it is usually best to seek help from a local advice agency.  The result will depend on how the District Judge views your circumstances and the options open to them.

Costs

If your time order application is refused, you may have extra cost added to your debt.  If you feel that the costs are unfair, ask the court not to add them to your debt.  This only happens if the creditor has been unreasonable in some way.  Contact us for advice.

Unfair relationships test

A time order allows the court to change the terms of the agreement, so that it is more easy to pay what you owe.  The Consumer Credit Act 2006 introduced a new option, called the unfair relationships test.  This allows the court to look not only at the terms of the agreement, but also the behaviour of the creditor, to see if the relationship has been unfair to the borrower.  The court has wide powers to alter terms of the agreement, or even to order the creditor to pay money back to you.

If you feel the interest rate charged on your agreement is excessively high, or that the terms and conditions of the agreement are unfair, you may be able to take action against your creditor using this option as well as a time order.  This may also apply if your creditor has behaved unfairly in the way in which they have dealt with your agreement.  It will be up to the creditor to prove that the agreement is not unfair.

The unfair relationships test applies to all agreements from April 2008, even if they are not regulated under the Consumer Credit Act (apart from a first mortgage).  It doesn’t matter when your agreement was first taken out.  You can apply before your creditor takes you to court.  You can also ask for the court to look at this issue as part of an existing court case.

There is a fee to pay when you put in a claim for unfair relationship.  Depending on your circumstances, you may not have to pay it.  See Do I have to pay a court fee? at the end of this fact sheet and contact us for advice.  

The Financial Conduct Authority (FCA), which regulates many firms that provide credit, instructs companies to uphold key related Principles in their dealings with customers.

• A firm must conduct its business with integrity.
• A firm must observe proper standards of market conduct.
• A firm must pay due regard to the interests of its customers and treat them fairly.
• A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
• A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
• A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.

Do I have to pay a court fee?

You may be able to get help with court fees, but you need to pass two tests to qualify. For more information, see our Help with court fees fact sheet.

Sample witness statement

IN THE ANYTOWN COUNTY COURT

CLAIM NUMBER Your claim number

Defendant: Your name

First Witness statement

Item 1(budget)

Date: Today’s date

Between

County Financial

and

Thomas Telford

Witness statement in support of time order application

I, Thomas Telford, employed, of 1 Any Street, Any Town, will say as follows:

1. I am the defendant in this matter. Except as otherwise stated, the statements contained herein are made from my own knowledge.

2. This witness statement has been prepared with the assistance of the local advice agency, and is made in support of the application for a time order contained in form N9A.

3. I am advised by the local advice agency that the loan subject to these proceedings is regulated by the Consumer Credit Act 1974. It is unsecured, was for £7,000 and was repayable over 4 years at £140 each month.

4. The purpose of the loan was to clear existing debts. The loan was not taken out for frivolous or unnecessary reasons. At the time I entered the agreement, approximately 5 years ago, I could afford the payments. I was working full-time with considerable overtime and my wife was working full-time. However, last summer my overtime stopped and I had periods of short-time working, due to lack of business. In addition, my wife had to reduce her hours of work to spend time with one of our children who was (and still is) ill at home.

5. I went to the local advice agency for advice and, with their help, I worked out that I could afford £70 each month. There is now produced and shown to me ‘Item 1’ a true copy of my budget, which was prepared with the help of the local advice agency.

6. On my behalf, the local advice agency offered £70 each month to County Financial, but I was told by the local advice agency that County Financial was unhelpful and would not agree to reduce payments, nor to reduce or freeze interest, demanding the full contractual instalment.

7. Although County Financial refused to consider reducing my payments, following advice from the local advice agency, I have now started paying the £70 each month. However, as this does not cover the full monthly payment, I am getting further into debt.

8. On my behalf the local advice agency wrote to County Financial three weeks before the date of this application to inform that I intended to apply for a time order.

9. My employer has confirmed that business is improving and that overtime should be available in 6 to 12 months. At that time I will be able to resume payments equivalent to the contractual instalments and to pay something towards the arrears.

10. I believe that it is fair to make a time order for the following reasons:

a) I got into difficulties with this loan through no fault of my own.

b) I have tried to deal with my financial difficulties by seeking help from the local advice agency.

c) I have been advised by the local advice agency that County Financial were unsympathetic and unhelpful, and would not negotiate on a realistic basis.

d) My employment is secure and the potential for overtime will enable me to pay more back to County Financial in the future.

e) Since taking out the loan with County Financial, I have taken out no further credit.

f) I have repaid more than 50% of the agreement.

g) Looking at the overall situation, the effect on County Financial of a time order and a freeze of interest and charges for 6 to 12 months is relatively small.

h) I therefore ask the court to make a time order under section 129 CCA 1974, rescheduling payment to £70 per month and, in consequence of this, freeze interest and other charges accruing under section136.

i) I also ask the court to order that County Financial’s costs in respect of this application are not recovered because they failed to negotiate realistically, or to make whatever order as to costs that it considers just.

Statement of Truth

I, Thomas Telford, believe that the facts stated in this witness statement are true.

Signed: ……………………………………………………………………………

Dated: ……………………………………………………………………………

Other fact sheets that may help you

Help with court fees fact sheet

Interest on a CCJ fact sheet