Should you find yourself facing severe debt problems, it’s possible that a creditor could file a county court claim against you. In essence, this signifies their intention to take you to court in order to get the money that they’re owed. It’s then the court’s job to examine the case and decide whether or not there is actually a debt to be paid, the value of the debt and then order you to pay it back in line with the instructions that they’ll give you. This isn’t a criminal matter, so even though you go to court, it’s not a case of guilty or not guilty. In fact, you don’t even have to appear in person. They’ll need you to provide them with information about your finances, as will be outlined in the county court claim form that you’ll be sent, advising you of the action being taken against you. This is where you’ll put your own side of the argument forward too.

Although at lot of what happens next will be down to the court, you still have options about how you would like to go forward with the repayment of the outstanding debt. It’s not too late to just pay it off. You can send payment directly to your creditor within 14 days of receiving the order. The court fees and extra interest will be added to the sum due for repayment but if you settle this, that’s the end of it.

In the majority of cases, this situation has arisen because of your inability to settle the outstanding debt. Should this be the case for you, you’ll need to fill in an admission form and make a proposal of how you actually intend to pay the debt off. So, if you get assistance from an impartial advisor in drawing up a repayment plan based on instalments, you’ll need to present this to your creditor for approval within the same 14 day period. Of course, if you dispute the amount that you owe, there are more forms to be filled in, where you can explain the situation, outline the amount that you feel you owe and how you intend to repay it.

If the need arises to defend yourself in court, you have 14 days to put together your case against the allegations. There is a form for extending this for another 14 days if you’re unable to construct a suitable case in this time. Should you be considering a counterclaim, that is, suggesting that it’s actually the creditor that owes you money, there’s a section to fill in for that too.

Upon review of your case, the court will come to a decision. They’ll issue a County Court Judgement (CCJ) if they find in favour of your creditors. This will clearly outline the repayment details. Should you have several judgements against you, the court might issue an administration order, compelling you to make a regular repayment to be distributed among your creditors.

Get in touch with the court at the first sign of difficulty in meeting the repayment criteria. It’s possible that you will be able to come to an alternative arrangement. All county court judgements that aren’t settled within one month are recorded on a public register for six years. This will have a negative effect on your credit score and make it difficult to obtain credit.

Get help with this process from a dedicated financial advisor. Drop by www.debtsolver.co.uk for a free financial health check, along with impartial advice and assistance in finding a solution to your debt problem.

Failure to address the problem of mounting debt can have serious ramifications. Quite simply, the earlier you attend to debt problems, either by making an approach to your creditors directly or seeking out help from a specialist debt advisor, the greater the likely hood of come to a mutually beneficial conclusion. If you choose to ignore your growing debt, you run a severe risk of bankruptcy and with it, the possibility that your assets will be seized to pay off your creditors. This will, of course, include your home. There is simply no escaping the threat of repossession once you allow your debt problem to reach the level where creditors will be pushing for bankruptcy. The only way to try and avoid this happening is to face up to the debt and get help, the sooner the better.

An Individual Voluntary Arrangement, or IVA, is a favourable alternative to bankruptcy proceedings as it will greatly reduce the threat to your assets. The IVA, although it might mean giving up some of the equity, will allow you to keep your house. It would seem that this is having a really positive impact on the number of UK repossessions. Originally, the Council of Mortgage Lenders projected the number of repossessions to reach 75,000 during 2009. It projection was then reduced to 65,000 by June. This wasn’t the end though. Now at 48,000 repossessions in 2009, the latest figure released by the Council of Mortgage Lenders is a massive 35% less than their original estimate.

This could potentially be put down to more restraint being shown by borrowers, more conscientious lending habits or even the government maintaining the low rate of interest. However, it has interestingly coincided with a definitive increase in the number of people in the UK that have applied for an IVA. The government’s Insolvency Service has released figures showing that the number of Individual Voluntary Arrangements has increased by over a fifth in the third quarter of 2009, compared with the same period last year. In that three month period alone, there were 12,390 IVA applications. The pattern emerging seems to point to a direct relationship between a drop in repossessions and an increase in the number of borrowers entering into an Individual Voluntary Arrangement.

If you make contact with your mortgage lender early, advising them of your circumstances, there’s a good chance they’ll make every effort to accommodate a revised repayment schedule. You should also get some specialist debt advice and strive to do so in enough time to avoid bankruptcy proceedings. If you can enter into an IVA, you’ll be able to safeguard your assets and reduce your total debt by up to 75%. There is the added benefit of avoiding the stigma of bankruptcy too, as insolvency proceedings are published in your local paper. If you’re facing the threat of bankruptcy, you’re facing the threat of repossession. Help safeguard your home with an IVA. Talk to a specialist debt advisor at DebtSolver.