Clause 16 - Time Orders
Consumer Credit Bill
12:00 pm
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
It is usual to spend some time on time orders, which are dealt with in clause 16. This morning, I mentioned the situation in Scotland with regard to time order applications. A debtor or hirer can ask the court for a time order in any action brought by a creditor or loaner to enforce a regulated agreement, or when they receive a default or non-default notice. Time orders may enable the debtor or hirer to have more time to repay the sums owed under the agreement and to remedy any breach of the agreement other than non-payment.
The time-order provisions of the 1974 Act are seldom used. Few are applied for and fewer are granted. Lack of information is part of the problem. Debtors and hirers are not aware of the time order provisions. We are working on ways to inform them about time orders, which will involve the inclusion of information on arrears and on default information sheets that will be produced by the Office of Fair Trading. The fact that debtors or hirers cannot apply for time orders at the appropriate times is part of the problem.
The clause amends section 129(1) of the 1974 Act to allow debtors or hirers to apply for a time order after they have received an arrears notice. That ensures that the debtor or hirer has the opportunity to apply for a time order when the problem is still developing, not when it is too late.
There is concern that people may use the time order simply to delay the inevitable, or that they will apply because they can. We will require people who want to seek a time order to go through certain steps. Debtors or hirers can make an application in the following circumstances: when they have notified the creditor or owner of their intention to apply for a time order and, in so doing, give details of their proposals; and that at least 14 days have passed since the notification was given to the creditor or owner. In practice, requirements should not be onerous. It is important to have simple criteria that can be met by debtors and hirers; compliance should also be simple.
The clause encourages creditors and owners to seek and resolve payment problems early. That was the basis for some of this morning's discussion.