What happens if you cannot afford to pay a court settlement?

[NotAChancee]

Hi,

My friend is being sued for rent arrears (£30k plus). The thing is, she genuinely has no way to pay. She lives on her student loan and has no assets.

Assuming she loses, what exactly happens? There is no way she can pay back the money and the court/solicitor fees.

(I should just add, she denies she owes any money and the case is pending.)

If she doesn’t have the ability to pay she can apply to court for a instalment order allowing her to pay it back in weekly or monthly instalments. She would have to provide full details of her incomings and outgoings. If the latter exceeds the former so there is no “spare” income then her application won’t succeed. If the former exceeds the latter then a instalment order may be made at eg £20ps or whatever is available. However the judgment debtor can object snd it will be up to the judge to make a final decision.
If she simply doesn’t pay, the judgment debtor can seek to enforce the debt. They could apply without notice to her for an order getting eg her bank to pay them what money she holds in a bank account (third party debt order), they could attach her earnings if she is employed, so her employer pays them £x per month, they could get a charge over her property and then apply for an order for sale if she is a property owner, they could instruct bailiffs to seize her assets eg a car or computers or jewellery, they could petition to make her bankrupt.
she will also be entered on the register of debtors (CCJ) which will adversely affect her credit record.
if she really has no assets at all, and other debts, bankruptcy might be an overall positive thing, but she needs advice. Christians Against Povery is a good source (you don’t have to be Christian!).

Nb her bankruptcy will not wipe out her student debts which are statutorily excluded from the regime

Thank you for such a detailed reply @Delphigirl. The case is still ongoing but has been postponed until 2024 now. I will share your response and help get her in touch with Christian’s Against Poverty (she is a weekly church goer!).

Thanks again

No problem. Good luck to her.