Debts From Fines
Court Orders and be used to enforce all types of fines – but some are includable in an IVA and bankruptcy, in which case they are not payable in full.
Magistrate Court Fines
If a court finds you against you and sets a fine as a penalty you’ll be asked to give particulars of your income as this is a factor in deciding the extent of the fine.
If you fail to make the payments as per the order, the court can take further steps to collect the fine. These can involve:
- Setting an attachment of earnings or deduction from benefits, if this wasn’t done initially
- Sending bailiffs or enforcement agents to visit your home and remove goods
- A charging order securing the debt against your home
The Court can take extra steps to collect the fine or impose a further penalty such as raising the fine, or a community service order or in extreme cases – prison.
Debts from magistrate court fines are not includable in an IVA or Bankruptcy as a debt. Such debts are still be paid in full. If instalments are paying the fine, then it can be included as an expenditure item in an IVA.
Fixed Penalty Notices
Fixed Penalty Notices were introduced for the Police to deal with a wide range of minor offences such as driving, anti-social behaviour offences, public disorder offences and environmental offences such as littering.
These are issued by the Police and are criminal offences.
There are no informal appeals, so you must attend court if you want to contest it. Refusal to pay can eventually lead to the instruction of bailiffs or other enforcement methods.
Any infringement that is enforced by the Police under the criminal law is termed a ‘fine’ in insolvency legislation and as such can not be included in an IVA or Bankruptcy.
Penalty Charge Notices (PCN)
These are issued by local councils, most commonly for parking or other driving issues, such as driving in a bus lane. These are civil, not criminal offences.
Typically you have 14 days to pay a reduced amount or the full amount after 28 days, during which time you can make an informal appeal.
If you don’t pay after 28 days nor make a formal appeal through the court; a court order enforces payment.
Debt arising from PCNs do not meet the definition of a fine given in insolvency legislation. Therefore PCN fines and any extra charges from non-payment can be included in an IVA or Bankruptcy as a debt. Meaning, they do not need to be paid in full and will be cleared upon discharge from bankruptcy or the successful completion of an IVA. The size of such fines is normally insignificant to the total size of debts needed for an IVA or bankruptcy to be a suitable debt solution.