How can I enforce a judgment order?
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How can I enforce a judgment order?
If you have obtained a Judgment Order (within the jurisdiction of England and Wales) in respect of a money claim you have issued and you want to recover money owed to you, you will need to take action to enforce the Judgment Order as the Court will not automatically do this for you.
As you have obtained the Judgment Order you are now referred to as the “Judgment Creditor”.
The individual/company who has the Judgment Order made against them is now referred to as the “Judgment Debtor”.
You will need to be mindful of how old the Judgment Order is, “limitation”. If the Order is more than 6 years old, there could be a delay in you being able to enforce, which could cause the Judgment Debtor to dispose of its assets.
Below are examples of enforcement action that could be available to you:
- Taking control of goods/obtain payment using High Court Enforcement Officers/County Court Bailiffs (Writ or a County Court Warrant of Control)
- Charging Orders against property, securities or assets
- Attachment of Earnings
- Insolvency proceedings – bankruptcy or company liquidation
- Third party debt order
For each method of enforcement, a court fee will have to be paid, which in certain circumstances can be recoverable.
Taking control of goods/obtain payment using High Court Enforcement Officers/County Court Bailiffs (High Court Writ or a County Court Warrant of Control)
This is a popular method, and it can be executed quite quickly.
It will require you to instruct a High Court Enforcement Officer (HCEO) who can obtain a High Court Writ (the Judgment Order must be over £600.00 to instruct the HCEO), who will give appropriate notice to the Judgment Debtor, attend upon them, take control of goods (provided they belong to the Judgment Debtor and not a third party) sell the same and raise funds to satisfy the Judgment Order. They can also secure payment by means of credit/debit card. Alternatively (with your agreement) the HCEO can also agree an instalment plan which they will monitor regularly and account to you periodically with funds received.
A Warrant of Control instructs the County Court Bailiff to undertake the same as above but can be a lengthier process than instructing the HCEO, with mixed results.
Charging Orders
This method secures the Judgment Order by attaching a charge over a Judgment Debtor’s beneficial interest in land, securities or other assets, and prevents the Judgment Debtor from disposing of the assets in certain circumstances.
The process through the Courts can be slow and does not realise any payment until the Judgment Creditor has applied for and obtained an Order for Sale or you wait for the sale/re-mortgage of the property by the Judgment Debtor in due course or following an Order obtained by other creditors, in terms of bricks and mortar properties. Alternatively, you can obtain a charge over the debtor’s shares which prevents dividends being paid to the Judgment Debtor until such time as the full debt has been settled.
However, if the Judgment Debtor is a sole owner and there is plenty of equity in the property, this can be an effective method of enforcement.
Attachment of Earnings
This order provides that an amount of a Judgment Debtor’s wages is deducted by their employer and paid direct to the Judgment Creditor. This enforcement action is only aimed towards individuals and through the County Court.
This can be inexpensive and easy to do, however this depends on the Judgment Debtor being in employment, and you are able to ascertain their employer details, but can take a long time to pay off the debt. Issues arise if the Judgment Debtor constantly changes employer as the process may need to be started again each time.
Insolvency proceedings – Bankruptcy or company liquidation
If the amount due to you is over £5,000.00 you can apply to make an individual Bankrupt.
If the amount due to you is from a company and above £750.00 you can apply to wind the company up.
These options can sometimes be expensive and lengthy if disputed, and it may not result in you effecting recovery. However, the threat of such enforcement action can procure an instant and/or a speedy recovery, which is why this option is very popular with our clients.
You also need to be careful because if the Court determines that you have used this course of action as a debt collection exercise when the debt is technically ‘in dispute’, the Court can dismiss Petitions, and sanction you in terms of costs. Careful advice is required when pursuing this route to ensure it is the appropriate route to take.
Third party debt order
These are not so popular and rely on funds being in the hands of a third party (Bank). Funds are frozen and seized for the benefit of the Judgment Creditor and are only useful if the Judgment Creditor is aware of the Judgment Debtor having a bank account into which a salary is paid.
The above is only a quick overview of the most popular methods of enforcing a County Court Judgment Order.
For further information on the above or any other debt related matter get in touch with a member of the Debt Recovery team for expert advice and assistance.
This blog is Part 3 in a series of blogs on debt collection.