Falling into debt
QI have fallen behind on my livery fees and the yard owners say they are going to sell my second saddle to pay the debt. Can they legally do this? Samantha Smith, Wiltshire
Rebecca says... If you have a written contract or agreement with your livery yard, you should check it to see if there is anything that confirms what happens if you fall behind on your fees by a set amount, or for a set period of time — including whether they can keep your saddle as security for this debt, or even sell it. This is known as a ‘lien’, and the lien would need to be an express term of the contract.
No written contract?
If you don’t have a written contract, it’s possible for the terms of your contract to be created by what you say to the livery yard and what they say to you (an oral contact). This could also be evidenced by emails or messages between you. Alternatively, your contract could be made up by things you’ve done in the past — for example, if you’ve fallen into debt before and allowed the livery yard to sell other items to cover it (that is, a contract implied by custom and practice). If you don’t have any agreement that confirms what happens in the event of any debt, there is no automatic or implied legal right for the livery yard to be able to sell your saddle, or any other item.
What happens next?
The livery owners could write a formal letter, giving you a set period in which to pay your debt. Normally this is 14 days, after which they could issue court proceedings against you.
Alternatively, they could issue a statutory demand for the debt if it is £5,000 or more, and potentially start proceedings to make you bankrupt. To avoid the livery yard starting any form of legal proceedings, I would recommend trying to talk to them and coming up with a reasonable payment plan that you can afford.
You should also consider having a written document that sets out what has been agreed so as to avoid any future misunderstandings. This will save you both a lot of time and potential legal fees if the dispute continues. I always describe this as a worst case scenario document that, hopefully, can be signed and then forgotten about in a file.