We use a minimal number of cookies to enhance your browsing experience - you can change your settings at any time.
checkmyfile
The UK's only Multi Agency Credit Report

Take a FREE 30-day no obligation trial. Call us free on 0800 612 0421 from 8am to 6pm today.




  
Forgotten Password? Not a Customer? Sign Up

Can you go to prison for debt?

Posted in 'Dealing with Debt' by Barry Stamp

09 November 2011

The answer is yes. It’s highly unlikely, but there is still a chance. Here’s how you (or someone you know) could get banged up

Firstly, don’t ignore a court summons. In particular, if a creditor has obtained judgment against you, and doesn’t know what to do next, or whether it’s worth taking further enforcement action, the creditor will ask to have you examined under oath at the Court, to declare your assets, income and liabilities. In the Courts of England and Wales, it’s called an ‘Order to Obtain Information’ and was previously called an ‘Oral Examination’. Over 30,000 such orders are made every year.

Some diehard debtors just ignore the summons to attend the court. They know that the creditor doesn’t always insist that the court officers issue a warrant for their arrest for non-appearance, as the person is in contempt of court. But just occasionally, it does happen, an arrest order is issued and the person is imprisoned.

Secondly, if you have a fine for a motoring offence, or for not having a TV licence, or similar fine levied by a Magistrates’ Court, it’s worth bearing in mind that there are circumstances when you can be committed to prison for non-payment.

There are safeguards to prevent this happening. For example, you cannot be committed to prison without having attended a hearing giving you the opportunity to explain your financial circumstances.

The Magistrates’ Court must have exhausted all other options and finally must then determine that you have gone out of your way deliberately to avoid paying the debt, called ‘willful refusal’, or alternatively must establish that you have been either careless or thoughtless in not paying, called ‘culpable neglect’.

You can be handed down a suspended sentence, or be committed to prison immediately. A suspended sentence is usually given subject to you making payments at a level ordered by the Court, and if you fail to make these payments, you will be ordered to attend another Court hearing. If you can’t prove that your financial position is so dire that you couldn’t afford to pay the fine, then you’re likely to be sent to jail.

It’s good to know that prison is the last resort for non-payment of debt, but it’s better to know that there are many ways of avoiding matters progressing to Court in the first place. Our Debt Advice Centre gives you a simple explanation of the many options available to all debt stressed people, and the general rule is that the earlier help is sought, the more options are available to you, and the easier things will be.

Even if you have had a County Court Judgment or High Court Judgment (or two or more) made against you, it’s important to know that if you clear this in full within 28 days, get a receipt, and make an application to the Court to have the judgment removed from the official register, it will never appear on your credit report.

If you could not afford to pay the sum in full, you should also know that the judgment is cleared automatically from your credit report after six years, and after around 3 or 4 years impacts your credit rating progressively less. You can check your Multi Agency Credit Report for free at checkmyfile to see the status of any previous judgments made against you. The service is free for 30 days, and then costs just £9.99 per month, cancel anytime.

Barry Stamp

Barry is a Chartered Banker and a Fellow of the Institute of Credit Management. He has a degree in Statistics and Business Economics from the Open University. Barry writes mostly on news from the worlds of banking and mortgages.

Barry is a co-founder of checkmyfile.

Related Articles

Ofgem criticises energy firms' treatment of debtors

Energy firms have been criticised by Ofgem for charging customers to install and remove pre-payment meters from homes. The meters cost up to £180 to be installed and £160 for removal, but can be demanded via a court action by the supplier if debts are run up.

Pre-payment meters are often installed if customers have previously run up debts with the energy supplier, allowing them to instead buy credit to ensure that their energy supply is kept on. This then prevents further debts being run up – if the customer cannot afford to put electricity or gas on their meter they simply won’t have any to use.

There have been complaints from both customers and debt charities over the years that these meters are the most expensive way for .....

30 Jun 2015 by

Kelly Luff

 in 

Dealing with Debt

Full Article

FCA finds debt management firms give poor advice

Debt management firms have long provided a service that some in the finance industry have questioned as a good quality option for those in financial difficulty. Now a review by the Financial Conduct Authority (FCA) has backed this belief up, finding that the quality of advice given by some companies is “unacceptably low”.

The review covered both fee-charging and free debt management firms, who advise consumers on ways of managing their debt problems without necessarily entering into insolvency. The firms tend to arrange informal agreements with lenders on the customer’s behalf, setting up repayment plans for credit accounts. Fee-paying firms will then take a payment for setting the agreements up – either a percentage of each monthl .....

26 Jun 2015 by

Kelly Luff

 in 

Dealing with Debt

Full Article

Fewer complaints about payday loans

Complaints about payday loans dropped by almost half in the first three months of 2015, compared to the same period last year.

12 Jun 2015 by

Richard Catlin

 in 

Dealing with Debt

Full Article

Accepted Payment Methods: VISA, MasterCard and Direct Debit

© Copyright Credit Reporting Agency Ltd 2000 to 2015. All Rights Reserved.

United KingdomAustraliaGive Me Credit United States

Customer Feedback