Glossary · UK
What is Time Order?
A County Court order under the Consumer Credit Act 1974 that reduces a borrower's repayments on a regulated credit agreement to an affordable level and can reduce the interest rate, typically used as a defence against a creditor's repossession or enforcement claim.
Full Definition
A time order is an order the County Court can make under the Consumer Credit Act 1974 in relation to a regulated credit agreement, such as a personal loan, credit card, or hire purchase agreement, adjusting the terms of repayment to something the debtor can actually afford, and it can also reduce the interest rate charged on the debt going forward. Unlike some debt solutions that are applied for proactively, a time order is most commonly used defensively, raised by a debtor in response to a creditor's court action -- for example where a hire purchase company is seeking to repossess a car, or a creditor is pursuing a claim for the full outstanding balance -- as a way of asking the court to allow continued repayment on more manageable terms rather than facing immediate enforcement or repossession. In deciding whether to grant a time order and what terms to set, the court considers the debtor's income and reasonable expenditure, the amount outstanding, and what a realistic affordable repayment would be, and can spread the remaining balance over a longer period at a reduced or even nominal rate of interest if that reflects genuine ability to pay while still ensuring the creditor eventually recovers the debt. Because a time order varies the legal terms of the credit agreement itself with the force of a court order, both parties are bound by the new terms, and a creditor cannot simply ignore a time order and continue pursuing the original repayment schedule or enforcement action covered by the order. Worked example: a hire purchase company begins repossession proceedings against a borrower who has fallen behind on payments for a car after losing overtime hours at work; the borrower applies to the court for a time order as part of defending the repossession claim, and the court, satisfied that the borrower can afford £150 a month rather than the original £280 a month contractual payment, grants a time order extending the remaining term and reducing the interest rate, allowing the borrower to keep the car and repay the debt on the revised terms instead of it being repossessed and sold.