What are the UK laws associated with non-payment of unsecured debt?

The Consumer Credit Act of 1974 (CCA-1974) provides a basis for all laws associated with non-payment of unsecured debt by consumers. The Consumer Credit Act of 2006 (CCA-2006) modifies portions of the CCA-1974 by providing consumers with more protection from creditors.

In summary, if one does not pay their unsecured debt in the UK:

* Banks will make all attempts to collect the debt

* If unsuccessful, based on the amount, the bank may apply to the court for a County Court Judgement (CCJ)

* Upon receiving a CCJ, the debtor will have difficulties getting ANY credit for the next seven (7) years

* As a result of the CCJ, depending on the amount owed, the debtor may receive an attachment of earnings order where part of your earnings are diverted to the court (to be paid to the lender)

* As a result of the CCJ, depending on the amount owed and if the debtor owns their home, the debtor may receive a charging order which converts unsecured debt to secured debt which allows one's home to be sold for recovery purposes

* As a result of the CCJ, depending on the amount and unlikely, the debtor may receive a bailiff's order, allowing a bailiff to take possession of items in your home to be used (once liquidated to cash) to pay the lender