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Time orders

This content applies to England & Wales

What time orders are and when the court might grant such an order.

Borrowers in difficulties can apply to the court for a 'time order' to reschedule a loan over a longer period and obtain more time to repay a debt.

When will the court grant a time order?

A court will only grant a time order if it considers it just and reasonable to do so.[1] In determining if it is 'just and reasonable', the court must have regard not only to the borrower's situation, but also to the creditor's interest.[2] If the court considers it just to grant a time order, it will specify the new terms of repayment. A time order will not be granted if the borrower cannot show that s/he can meet the repayments required by the court.

When the court considers whether to grant a time order, the whole of the outstanding amount owed will be taken into account.[3] This could be an amount greatly in excess of the amount borrowed, particularly if the loan was originally to be repaid over a long period of time. The court also has the power to vary the agreement as a consequence of the time order.[4] It can order that no further interest or a reduced rate of interest be payable, so that the repayments stay within the borrower's means without increasing the term of the loan for an unacceptable length of time.

Reasons for requesting a time order

A time order may be an appropriate remedy where:

  • current circumstances make payment impossible but an improvement in circumstances is likely to occur because of, for example, working increased hours, benefits coming into payment
  • the original agreement was harsh on the borrower
  • unsecured non-priority debts could be rescheduled to live more available income to pay priority debts.

Conditions for making a time order

Time orders can be made on application where:

  • a default notice has been served, or
  • an arrears notice has been served and the borrower has made a repayment proposal and given the lender 14 days' notice of their intention to apply for a time order.

Applying for a time order

An application for a time order can be independent from other court applications. It should be made on Form N440. Alternatively, when faced with a possession claim, the borrower can complete the defence form and state that s/he wishes to apply for a time order, or s/he can apply subsequently by notice.[5] Even if no specific request for a time order is made, the court may still consider whether or not to grant one.[6] If the court decides to make a time order, it will need to suspend any possession order that it also makes, on condition that the terms of the time order are complied with.[7]

Where the borrower indicates on the defence form that s/he wishes to apply for a time order, there is no fee payable, otherwise the standard fee applies unless the applicant is entitled to full or part fee remission. Applying for a time order is complex and it may be necessary to have representation from an experienced lay advocate or a solicitor.

Where the borrower has indicated her/his intention to apply for a time order on the defence form, an adjournment should be requested at the hearing in order to file a full defence. As time orders are a specialist area of money advice, a borrower may benefit from the support of a money advice agency.

[1] s.129(2) Consumer Credit Act 1974.

[2] Southern and District Finance plc v Barnes (1995) 27 HLR 691, CA.

[3] Southern and District Finance plc v Barnes (1995) 27 HLR 691, CA.

[4] s.130(6) Consumer Credit Act 1974.

[5] Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.7.1.

[6] s129(1)(c) Consumer Credit Act 1974.

[7] See point six of the six point summary given in the case of Southern and District Finance plc v Barnes (1995) 27 HLR 691, CA

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