Debtors should only be permitted to pay what they owe by instalments if that is fair to their creditors and achieves finality within a reasonable period. The Court of Appeal made that point in a guideline case concerning a mother who was burdened with debts of £8,000 after her husband refused to pay a parking fine.
The husband had persisted in refusing to pay the fine, despite having unsuccessfully challenged it before the Parking Adjudicator and the High Court, and bailiffs were ultimately instructed by the local authority to take possession of the family car. His wife returned from a shopping trip to find the car clamped and it was later towed away and held in a pound for four or five days.
She later launched proceedings against the bailiff who carried out the seizure and the debt recovery company for which he worked. She sought an injunction preventing the vehicle’s sale, and damages to reflect losses said to have arisen from her inability to use it whilst it was in the pound. Her claim, however, failed in its entirety and she was ordered to pay legal costs totalling £8,000.
Faced with bankruptcy proceedings, the woman argued that, as a student who held down a part-time retail job, her disposable income after essential bills were paid came to just £67 a month. However, a judge refused to grant her permission to pay off the debt by instalments of £50 a month.
In ruling on the woman’s challenge to that decision, the Court of Appeal expressed considerable sympathy for her. She had found herself on the verge of bankruptcy largely, if not entirely, because of her husband’s failed attempts to resist payment of the parking fine for which he was responsible.
In dismissing her appeal, however, the Court found that the right balance had been struck between her interests as a debtor and those of the company. The proposed £50 a month instalments would be insufficient to cover the interest on the judgment debt and her financial position meant that there was no realistic prospect of her paying off the capital within a reasonable time. The Court ordered her to pay a further £20,045 in legal costs.