Hi Richard,
"Passing your account over for legal action" in generally a stage of escalation used by a creditor to encourage you to pay.
You might find that the next stage is a letter/phone call from a debt collection company. If the matter remains unresolved for some time after that the solicitors of the debt collection company might contact you indicating that the matter will imminently be taken to court.
At all stages your creditor will want to make payment arrangements with you rather than take you to court. If you cannot reach agreement I'd suggest that as a minimum (if you can) you send a token payment to the creditor.
As Mike says you do not want these matters to reach court if you think an IVA will be the right solution (or in fact if a loan, remortgage, or debt management might be the right solution). I would seek some third party advice on your options and/or post your details on this site and other posters will provide you with their thoughts on your options.
Typically the longer a debt issue is left unchecked the worse it gets and the fewer options are left open for you.
You've done the right thing asking this question now rather than when it may have become too late.
Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk
