If I begin a debt-management plan, can creditors still take court action against me?

December 10, 2017

If you’re unable to meet repayments on a loan or credit agreement, you may be considering a debt management plan (DMP). This is an unofficial arrangement negotiated with your creditor on your behalf, by a money adviser or licensed insolvency practitioner (IP).

Because it’s not a formal debt solution you don’t need to go through the courts, and the conditions applied to the arrangement can be changed by either party. This flexibility can be beneficial in many respects – you can stop the arrangement if necessary, or request that repayment amounts are altered.

On the other hand, its unofficial nature also allows your creditors to pursue you for full payment of the debt if they choose, at any time during the plan. This could eventually lead to them taking court action against you regardless of the original DMP.

Pursuing you for debt included in a debt management plan

Even when creditors agree the new repayment schedule represented by your DMP, they’re still entitled to contact you about the debt at any time during its term. This can be in the form of phone calls, letters, emails and in-person visits.

Your money adviser, or the IP administering the plan, should help you by communicating with the creditor on your behalf. Creditors are also able to cancel the plan and take court action, however, even when you abide by the terms of the arrangement.

What could creditors do to enforce a debt?

Default notice

A default notice from your creditor is a formal notice detailing the extent of your arrears, the actions you can take to remedy the situation, and what the creditor will do if their debt isn’t repaid.

They may take you to court if their demands for repayment are not met in seven days. In this instance, you’ll receive a claim form that details the debt in question and your obligation to repay.

If you’re unable to reach agreement with the creditor and cannot afford to repay, it’s likely that a County Court Judgment (CCJ) will be made against you. The court will order you to either repay the amount owed in full, or in instalments.


A creditor can petition for your bankruptcy if the debt amounts to more than £5,000. It’s also possible for creditors to take action as a group – they can amalgamate the debts owed, so that they exceed the £5,000 threshold.

It’s extremely stressful to deal with circumstances such as these, and seeking professional assistance is crucial to ensure you’re aware of your rights. You’re entitled to free money advice and assistance in relation to debt in Northern Ireland, and this can be highly beneficial to prevent your situation worsening.

Northern Ireland Debt Solutions help residents of Northern Ireland who are struggling with debt. We can provide support and reliable advice if your creditors are threatening court action – call one of the team to arrange a free same-day meeting.


Lawrence O'Hara

Insolvency Adviser

Tel: 028 2132 6269

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