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.

A reminder or initial contact is common after a first missed payment, but there is no universal seven-day immunity from legal action. The debt type and previous notices, judgments or payment arrangements determine what can happen next.

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 normally needs a formal default notice before the specified section 87 actions under the Consumer Credit Act 1974 allowing at least 14 days after service 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.

If this is genuinely the first arrears event, enforcement usually requires further procedural steps. Missing an instalment under an existing court order or enforcement arrangement can have more immediate consequences; check the paperwork rather than relying only on the date of the latest missed payment.

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

In England and Wales, a council-tax reminder normally gives seven days to catch up and preserve instalments. Normally no more than two reminders are issued in a financial year; a later missed instalment can lead to a demand for the year’s balance. Costs vary by council. Scotland uses a separate summary-warrant process. Northern Ireland has domestic rates, not council tax, so this reminder timetable should not be applied there.

Consumer credit agreements

Sections 87 and 88 of the Consumer Credit Act require a compliant default notice before specified steps following breach of a regulated agreement, including termination, accelerated repayment and enforcement of security. It must allow at least 14 days after service for remedy. The rule does not prohibit every collection contact or every claim for an instalment already due, and earlier valid notices may already have run. Regulated mortgages and exempt agreements have different requirements.

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

Energy debt and vulnerability require an individual assessment. Tell the supplier about children, age, illness, disability or medical equipment and ask for affordable support. Statutory winter disconnection protections and suppliers’ wider commitments have specific eligibility conditions; having any child under 18 is not by itself a universal legal ban on disconnection. Seek urgent energy advice if disconnection or an involuntary prepayment meter is proposed.

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, a statutory default notice and a credit-file default are different things. A creditor can issue a default notice after a breach without waiting for several missed payments, but must allow the statutory remedy period before taking the section 87 steps.

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. Qualifying third-party deferred-payment credit entered into from 15 July 2026 is now regulated; older agreements and certain merchant-provided credit remain outside the new regime.

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

Under the rules in force from 1 May 2026, the normal minimum is 14 clear days before taking control of goods. A qualifying debt-advice provider’s request made before the notice expires extends the minimum to 28 clear days. The court can permit a shorter period in specified circumstances; older notices can require transitional-rule checks. Sundays, bank holidays, Good Friday and Christmas Day are excluded, as are the service and enforcement days.

Vulnerable customer protections for energy

Energy debt and vulnerability require an individual assessment. Tell the supplier about children, age, illness, disability or medical equipment and ask for affordable support. Statutory winter disconnection protections and suppliers’ wider commitments have specific eligibility conditions; having any child under 18 is not by itself a universal legal ban on disconnection. Seek urgent energy advice if disconnection or an involuntary prepayment meter is proposed.

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 regulated consumer credit, a default notice normally gives at least 14 days after service before the specified section 87 actions. This is not a blanket seven-day ban on any legal step, especially where there are existing arrears or court orders.

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.

• First steps: A reminder is common, but there is no universal seven-day immunity where earlier notices, court orders or enforcement arrangements exist.
• 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: A section 87 default notice must allow at least 14 days after service before the specified actions; it does not bar every form of collection activity.
• 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.

• FCA — current BNPL rules

• Ofgem — help with energy bills

• Taking Control of Goods — current fee scales

• Taking Control of Goods — current notice periods

This guide is based on UK primary legislation, regulator handbooks, and official guidance. The following sources cover the rules described above:

• Council Tax (Administration and Enforcement) Regulations 1992
• Debt Respite Scheme (Breathing Space) Regulations 2020
• Information Commissioner's Office
• Consumer Credit Act 1974
• Ofgem

Free, impartial debt advice is available from MoneyHelper, StepChange, and Citizens Advice.

Related: How to Stabilise Arrears Fast | What Counts as a Missed Payment vs Arrears | Default Notices Explained | All debt guides.