Missed a Payment: What Happens in the First 7 Days

Missing a payment — whether on council tax, a credit agreement, or an energy bill — triggers a set of formal processes governed by UK law and regulation. These processes are not immediate, and they are not all the same. Different types of debt follow different rules, enforced by different bodies, under different legislation.

This guide explains what typically happens during the first seven days after a missed payment across the most common categories of UK consumer debt. It covers the formal notices that may be issued, the legal frameworks that govern them, and the protections that exist. It does not cover what you should or should not do. It explains how the systems work.

Understanding these early-stage processes matters because they set the course for everything that follows. The first seven days are governed by specific rules, timelines, and safeguards — and knowing what those are can reduce confusion at a time when clarity is most needed.

In the first seven days after a missed payment, the most common outcome is that a reminder or initial contact is sent by the creditor. Across most debt types, no enforcement action can lawfully take place this early. The specific rules depend entirely on what type of payment has been missed.

For council tax, a formal reminder notice is issued requiring payment within seven days of the notice date. If payment is made within that window, the instalment arrangement continues as before. For consumer credit agreements such as loans and credit cards, a creditor cannot take enforcement action without first issuing a formal default notice under the Consumer Credit Act 1974 and allowing at least 14 days for the breach to be remedied. For energy bills, in most cases an initial reminder is sent within one to two weeks of a missed payment, with no penalty applied at that stage.

No single missed payment, on its own, results in court action, disconnection, or a bailiff visit within seven days. Each debt type has a defined sequence of steps that must be followed before escalation can occur.

The UK does not operate a single, unified system for handling missed payments. Instead, the rules depend on the type of debt, the creditor, and the legislation that applies. There are, however, common principles that run across most categories: creditors must notify before they escalate, specific timeframes must be observed, and certain protections exist for people in financial difficulty.

The three most relevant legal and regulatory frameworks for consumer debt in the first seven days are the Council Tax (Administration and Enforcement) Regulations 1992, the Consumer Credit Act 1974, and Ofgem's supply licence conditions for energy suppliers. Each of these sets out what a creditor must do before taking further action, and each imposes constraints on the speed and nature of escalation.

The Financial Conduct Authority's Consumer Credit Sourcebook (known as CONC) provides detailed rules for firms that provide consumer credit. CONC 7 specifically addresses arrears, default, and recovery, and requires that firms treat customers in default or arrears fairly. This obligation shapes how regulated lenders and credit providers are expected to behave from the very first missed payment onward.

It is worth noting that different types of debt carry different levels of legal protection. Domestic water supply, for example, cannot be disconnected for non-payment under the Water Industry Act 1999 in England and Wales, whereas energy supply can — although disconnection for debt remains extremely rare and is subject to strict conditions. Council tax follows an entirely separate enforcement route through the magistrates' court system. These distinctions are important, because they determine not just what happens next but what is lawfully permitted to happen.

The rules governing the first seven days vary by debt type. The following sections set out the key frameworks.

Council tax

When a council tax instalment is missed, the local authority sends a first reminder notice. The notice requires payment within seven days of its date. If payment is made within that seven-day window, the right to continue paying by instalments is preserved. A maximum of two reminder notices may be issued in any financial year (running April to March). If a third instalment is missed in the same financial year, no further reminder is sent — instead, a final notice is issued immediately, and the full annual balance becomes due within seven days. If a final notice goes unpaid within seven days, the council may apply to the magistrates' court for a summons. Court costs are added at this stage, typically ranging from £80 to £130 depending on the council. These figures vary by local authority; for example, one council may charge £80 for a summons and £10 for a liability order, while another may charge £100 and £43 respectively. It should be noted that council tax recovery procedures differ between England and Wales, Scotland, and Northern Ireland. Scotland uses a summary warrant procedure rather than the magistrates' court, and Northern Ireland operates through a different court system. The core principle of a seven-day reminder period is consistent, but enforcement mechanisms vary by jurisdiction.

Consumer credit agreements

Under the Consumer Credit Act 1974, a creditor must serve a formal default notice before taking any enforcement action for breach of a regulated consumer credit agreement. This requirement is set out in Sections 87 and 88 of the Act. The notice must specify a date — not less than 14 days from the date of service — by which the breach must be remedied. If the breach is remedied within that 14-day period, it is treated as if it had not occurred. Failure to serve a valid default notice renders any subsequent enforcement action unlawful. This means that within the first seven days of a missed payment, even if a default notice has been served on the same day the payment was missed, the creditor cannot yet take enforcement action — the 14-day notice period has not expired. Certain agreements are exempt from the Consumer Credit Act 1974, including agreements secured on land (which are regulated under the FCA's Mortgages and Home Finance: Conduct of Business rules, known as MCOB), certain high net worth exemptions, and business credit agreements exceeding £25,000.

Notice of Sums in Arrears (NOSIA)

For fixed-sum credit agreements regulated under FCA CONC rules, a separate obligation arises once a customer reaches two months of arrears — equivalent to two full missed payments. At that point, the firm must send a Notice of Sums in Arrears within 14 days. This notice must then be repeated every six months until arrears are cleared. Failure to send the NOSIA within the required 14-day timeframe can render the debt unenforceable. Within the first seven days of a single missed payment, this obligation has not yet been triggered.

Credit card late fees

In most cases, if a credit card payment is not received by the due date, a late payment fee may be applied. This fee is typically up to £12, though the specific terms vary by provider. The FCA has noted concerns about situations where multiple charges — such as a late fee, an over-limit fee, and a returned payment fee — are applied within a single billing cycle, potentially totalling up to £36. The FCA has warned against this practice of compounding fees.

Energy bills

In most cases, energy suppliers send an initial reminder within one to two weeks of a missed payment. No penalty is typically applied at this stage. Before any disconnection can occur, a supplier must provide at least seven days' advance notice. Disconnection for debt is rare and must be treated as a last resort. Under Ofgem's licence conditions, vulnerable customers — including pensioners, households with children under 18, and those with serious illness — are protected from disconnection during the winter months (1 October to 31 March). A supplier must have exhausted all other options, including repayment plans and prepayment meters, before disconnection can be considered.

Water bills

Domestic water supply in England and Wales cannot be disconnected due to non-payment. This prohibition is established by the Water Industry Act 1999 and applies to domestic premises only. Commercial premises are not covered by this protection. Water companies can, however, pursue other forms of enforcement, including obtaining County Court Judgments (CCJs), using bailiffs, applying for charging orders, or pursuing bankruptcy proceedings.

Commercial debts

The Late Payment of Commercial Debts (Interest) Act 1998 allows businesses to charge statutory interest on overdue business-to-business invoices at a rate of 8% above the Bank of England base rate, calculated daily from the date payment was due. Fixed compensation is also claimable per overdue invoice: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. This legislation applies to business-to-business transactions only and does not apply to consumer debts.

A missed payment does not immediately appear on a credit file

In most cases, missed payments are reported to credit reference agencies (Experian, Equifax, and TransUnion) when payments are 30 days or more overdue. Individual lender policies vary, and some may report earlier. However, a payment that is only a few days late is not, in the majority of cases, reported within the first week.

A missed payment and a default are not the same thing

A missed payment is a single event. A default, in the formal legal sense under the Consumer Credit Act 1974, involves a creditor serving a default notice and allowing 14 days for remedy. The word "default" is sometimes used casually to mean any missed payment, but in regulatory terms it refers to a specific legal process that cannot occur within seven days of a first missed payment.

Not all debts follow the same rules

Council tax follows a local authority enforcement route through the magistrates' court. Consumer credit follows the Consumer Credit Act and FCA CONC rules. Energy and water debts are governed by Ofgem and Ofwat respectively. Mixing up the rules for one debt type with another is a common source of confusion.

Utility companies do not all report to credit reference agencies in the same way

Not all utility companies report payment history directly to credit reference agencies. In most cases, reporting typically occurs only if an account passes to debt collection or a CCJ is obtained. Energy and water companies may not routinely report monthly payment history unless a negative event occurs. Mobile phone contracts, by contrast, are more likely to be reported on an ongoing basis.

Breathing Space is not available everywhere in the UK

The Debt Respite Scheme (Breathing Space) provides up to 60 days of protection from creditor enforcement, but it applies only in England and Wales. It must be accessed through an FCA-regulated debt adviser. A standard Breathing Space cannot be used more than once in any 12-month period. A Mental Health Crisis Breathing Space lasts for the duration of crisis treatment plus 30 days and has no frequency limit.

Council tax: third missed payment in a financial year

If two reminder notices have already been issued in the same financial year (April to March) and a third instalment is missed, no further reminder is given. A final notice is issued immediately, and the full annual balance for the year becomes payable within seven days. This is a significant escalation that bypasses the normal reminder process.

Consumer Credit Act exemptions

Not all credit agreements fall under the Consumer Credit Act 1974. Agreements secured on land, such as mortgages, are regulated separately under FCA MCOB rules. Certain high net worth exemptions and business credit agreements exceeding £25,000 also fall outside the Act's scope. Additionally, Buy Now Pay Later agreements are currently set to be brought into regulation from July 2026.

Joint debts and Breathing Space

For joint debts where one party enters Breathing Space, the other party also receives protection from enforcement action but is not added to the Breathing Space register. However, joint debt protection does not extend to credit file impact — the other party's credit file may still be affected by missed payments. For guarantor loans, the guarantor is not protected by the borrower's Breathing Space unless the guarantor separately applies.

Bailiff notice periods

In England and Wales, under the Taking Control of Goods Regulations 2013, an enforcement agent (bailiff) must provide seven days' notice before a first visit. The Notice of Enforcement must include the correct name and address, the amount of the debt, and the seven-day notice period. This means that even after a liability order has been obtained for council tax, a bailiff cannot arrive at a property without first providing this written notice.

Vulnerable customer protections for energy

Energy suppliers cannot disconnect vulnerable households during the winter period (1 October to 31 March). The definition of a vulnerable household for this purpose includes pensioners, households with children under 18, and individuals with serious medical needs. The supplier must have taken all other available steps before disconnection can be considered, and disconnection for debt remains extremely rare in practice.

Credit file duration

Once a missed payment is reported to a credit reference agency, the record remains on file for six years from the date of first reporting — not from the date the payment was missed. This distinction matters because there can be a gap between when a payment is missed and when it is formally reported. The record remains even if the debt is subsequently paid in full.

In practical terms, the first seven days after a missed payment sit at the very beginning of a structured process. For most types of debt, this period involves notification rather than enforcement. The creditor's obligation in nearly all cases is to inform and allow time for the situation to be addressed before any escalation occurs.

For council tax, the seven-day reminder window is the most time-sensitive process in this early period. Payment within seven days of the reminder date preserves the instalment arrangement, which means the financial year's remaining payments continue on their original schedule. If that window is missed, the consequences escalate relatively quickly — particularly if it is the third missed payment in the financial year, in which case the full annual balance becomes due.

For consumer credit, the 14-day default notice requirement under the Consumer Credit Act 1974 means that no enforcement action can lawfully begin within the first seven days. The legal process has a built-in delay that protects the borrower, and the creditor's failure to follow this process correctly can render subsequent enforcement unlawful.

For energy bills, the early-stage process is typically limited to a reminder with no financial penalty. The extensive protections around disconnection, particularly for vulnerable customers during winter months, mean that the risk of supply loss within the first seven days of a missed payment is, in practice, negligible.

For water bills in England and Wales, disconnection of domestic supply is not a lawful option at any stage, regardless of arrears. Other enforcement measures may eventually follow, but these require court processes that operate on much longer timescales.

Across all categories, the first seven days represent a notification phase rather than an enforcement phase. The specific rules, timelines, and protections vary by debt type, but the general principle holds: creditors have obligations to inform before they act, and the law provides minimum timeframes before escalation can occur.

• Notification Phase: The first seven days after a missed payment are governed by formal rules requiring notification, not enforcement. No bailiff or court action can lawfully occur this early for standard consumer debts.
• Council Tax: Requires payment within seven days of a reminder notice to preserve instalment rights. A third missed payment in a financial year escalates immediately to a final notice for the full balance.
• Consumer Credit: The Consumer Credit Act 1974 requires a 14-day default notice before enforcement can begin.
• Utilities: Energy suppliers typically send a reminder with no penalty in the first week. Domestic water supply in England and Wales cannot be disconnected for non-payment.
• Credit Reporting: In most cases, missed payments are not reported to credit agencies until they are 30 days overdue, though lender policies vary.