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What is the small claims court process

If you can't repay your creditor and the debt is less than £3,000 your creditor may start legal action against you using the small claims process. . The small claims process is dealt with by the County Court but the costs payable by both sides are limited.

You’ll still be charged a court fee. However, you won’t be expected to pay solicitors fees or other charges your creditor may add to your debt. 

If the claim against you is successful, you’ll be given a County Court judgment (CCJ). There are several different ways to proceed once your creditor takes legal action against you, and if you act quickly, most of them won’t result in a CCJ.

Received a notice of action for a small claim?

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Received a notice of action?

When your creditor starts legal action using the small claims process, you’ll receive the following:

  • form 125, ‘notice of action for a small claim
  • form 126A, ‘notice of dispute
  • form 126B, ‘notice of acceptance of liability

Receiving a ‘notice of action’ doesn’t need to be a cause for alarm. We’re here to help by offering support and expert advice tailored to your situation.

To get help, use our online debt help tool.

You’ll have 21 days from the date the forms were sent to respond with either the ‘notice of dispute’ or the ‘notice of acceptance of liability’.

If you agree that you owe the creditor the amount stated and you’re able to pay the full amount before the deadline, you'll still receive a CCJ but it can't be passed to the EJO for enforcement. 

In this case, there aren’t any forms to return – just pay your creditor (not the court) the full amount, including the court fee, using the payment address given on the ‘notice of application’. Make sure you keep a copy for your records of how much you paid and when you paid it, in case the court asks for proof of payment.

What happens if I can't pay?

If you're not able to pay the full amount there are still several different ways to respond to the claim, as long as you act quickly.

If you don't respond at all, you risk further legal action being taken against you.

Asking for time to pay

If you agree that you owe the money and the amount being claimed is correct but you can’t pay in full immediately, you can ask your creditor for time to pay.

You’ll need to contact your creditor directly and arrange time to pay within 21 days of the ‘notice of application’ being issued.

If you don’t respond in time you risk getting a CCJ, and the court will decide the repayment amount. Fill in the form 126B ‘ notice of acceptance of liability’. Make sure you tick ‘Yes’ to question 'do you wish to apply for time to pay this amount?’ and state the payment amount you’re offering.

Send the form, along with a copy of your budget and a list of creditors, back to the court. You can use our budgeting form which is already set up to work everything out for you. All you need to do is fill in your details for each section.

If your creditor agrees to your offer, the decree will be granted and the court will order you to pay the money.

If your creditor doesn’t accept your offer, a judge will review the claim and decide how much you have to pay, before granting the decree.

Either way, the decree will be granted with a ‘stay of execution’ which stops your creditor from enforcing the judgment.

This means as long as you keep up to date with the agreed payments your CCJ won't be passed to the Enforcement of Judgments Office (EJO).

Entering into a Tomlin order

A Tomlin order is a legally binding agreement where you and your creditor agree to put the claim on hold, as long as you make set repayments.

If you fail to make the payments, your creditor can continue the court proceedings. While a Tomlin order does have benefits, it’s important to understand the disadvantages that also come with it.

For example, your creditor may set your monthly repayments at a rate which is difficult to afford or add extra costs to the amount you owe for drafting the order.

A Tomlin order is made up of two parts:

  • The consent order
  • The schedule

The court grants a consent order binding both parties to the terms outlined in the schedule. The schedule covers details such as the repayment amount and any additional costs, for example, interest and charges.

If your situation changes and you can no longer afford your repayments, you may find it difficult to change these terms.

How to defend the claim

You may disagree with the claim made against you, for example, if:

  • the claim amount is incorrect
  • you don’t owe the money
  • the debt is statute barred, or
  • you’ve already paid the debt in full

If you decide to defend the claim, you’ll need to complete form 126A, ‘notice of dispute’ and return your form to the court within 21 days.

The form gives you the chance to explain why you’re defending the claim, which you’ll need to be able to support with evidence.

We strongly recommend you seek expert legal advice before taking this course of action. Defending a claim can be a complex matter, so you need to make sure you’re making the right decision for your situation.

Once the court receives your completed forms a hearing will be scheduled for your case and a judge will make the final decision.

If your defence is unsuccessful, the decree will be granted and you’ll receive a CCJ which remains on your credit file for six years and makes it harder to take out further credit.

Help and advice

If you’ve received a notice of action for a small claim, contact us or use our online debt advice tool.

Our expert advisors will put together a personal budget and give you tailored advice on your rights and how to deal with your situation.