10. Time orders
A time order is a request to the court for more time to pay a credit agreement.1s129 CCA 1974 A court can decide if a time order will go ahead, based on the client’s and creditors’ interests. Clients can only apply for a time order if their credit agreement is regulated by the Consumer Credit Act 1974 (CCA 1974). A time order can change the amount to be paid each month, the length of the loan and, occasionally, the interest rate.
It is especially useful if the client has a secured loan and creditors are threatening to repossess their home or if the client has a hire purchase (HP), personal contract purchase (PCP) or conditional sale contract as a successful time order application can stop a home or car from being repossessed.
Note that if the client already has had a time to pay direction (TTPD) or time to pay order (TTPD) granted by the court and has defaulted on this agreement, they cannot then apply for a time order.
Information on time orders is in section 129 of the CCA 1974. If a client also wants to stop their car from being repossessed, they must also make an application using section 135 of the CCA 1974 at the same time, asking the court to keep the car while they continued to make repayments under the time order. Section 136 can also amend the interest being paid.
Time orders are applied for by a client under two different procedures.
•Stand-alone application. This is made before the creditor has raised court action and can be applied for when the client receives a notice of arrears from the creditor. Clients must submit Form 12 to the court and the creditor. The client incurs the cost of having it served on the other party.
If the client has received a default notice which has expired, they can also apply for a time order using the same form. They do not have to serve notice of doing so to the creditor at this point, they must still submit it to court and are responsible for any cost associated with applying for a time order. •Time order when action has been raised in court. When a creditor raises an action in court to recover money or take possession of goods, the client is sent a summons. This is a bundle of court papers, including a form which allows them to apply for a time order/TTPD. It is called ‘Application in writing for a time to pay direction or a time order’ (DSA2 - available from the sheriff court). It should be submitted before the expiry of the response date on the summons to the court. There is no cost for doing this.
Whichever procedure is used, the creditor informs the client and the court whether or not it is prepared to accept the time order application. If accepted, the court notifies the client and they must begin making payments.
If the creditor does not accept the time order application, the court sets a hearing date. The client and their representative must attend and make representations as to why the application should be accepted.
If it goes to court, the sheriff listens to both sides and decides if the application is ‘just’. Their decision is final. Clients should be made aware that if a time order application is not successful, the sheriff can grant a court order against them. Where this relates to an HP, conditional sale or PCP agreement, the sheriff usually also makes a possession order for the item to be returned to the creditor.