Enforcing Money Judgments

Enforcing Money Judgments

You may have seen our recent publication, Debt Recovery – How to Get Paid, last week. In this article, we delve deeper into the different enforcement actions available to you if you’ve received a County Court Judgement (CCJ) but your debtor still will not pay.

The law provides a variety of avenues that you can pursue to enforce your judgment. We can help you to decide which enforcement method is best suited to your debt, based on your unique situation.

Charging Order

Once you have received a CCJ against your debtor, you may wish to apply for a charging order. A charging order will secure the debt against the debtor’s property. Once you have received the charging order, you will be able to register this charge at HM Land Registry. Your debtor will be unable to sell or transfer the property without your permission. When they do sell the property, you will seek to recover your debt from the sale proceeds.

In addition, you can potentially seek an Order for Sale This is an Order of the Court requiring the debtor to sell their property. You will recover your debt from the proceeds. It should be noted that if the debt is regulated by the Consumer Credit Act 1974, a claim for an Order for Sale can only be issued where the debt exceeds £1,000.

One of the benefits of a charging order include that interest continues to run on the sum secured from the date of the CCJ (assuming the judgment sum is £5,000 or more) through to the receipt of final monies.

Consideration should be given to whether your debtor owns a property and whether there is sufficient equity in the property to discharge their debt. If there is insufficient equity, it is unlikely that your charging order will have any effect.

Attachment of Earnings

If your debtor is employed and you know the name and address of their employer, you may wish to apply for an Attachment of Earnings Order. This will require your debtor’s employer to make deductions from the debtor’s salary or wages until the debt is recovered. The employer will pay this portion of their salary directly to you.

This option is useful as it removes any requirement for the debtor to take action. That said, it is inappropriate where the debtor is self-employed or is out of employment.

High Court Enforcement Officers (HCEO) / Writ of control

A High Court Enforcement Officer can be an effective tool in recovering your debt. A HCEO can attend your debtor’s address to collect payment. Your HCEO will obtain a writ of control. If your debtor will not pay, the HCEO may seize assets to secure the debt.

In order to instruct a HCEO, your debt / judgment must be for over £600.  If your CCJ is over this amount, you can have your judgment transferred up from the County Court, where you obtained your judgment, to the High Court for enforcement via a HCEO.

Bailiffs / Warrant of control

It can be confusing to distinguish between a HCEO and a County Court Bailiff. A County Court Bailiff is employed by the County Court rather than a HCEO who works for a private company.

A County Court Bailiff can be instructed by obtaining a warrant of control. Unlike a HCEO, they can enforce debts under £600 and up to £5,000.  CCJs for debts over £5,000 can only be enforced by a HCEO.

Third Party Debt Order

A third-party debt order allows you to recover your debt from a third party that owes money to your debtor. This includes money held by the debtor in a bank account. A third party debt order freezes the sums that are in the hands of a third party, such as a bank.  The Order would then be against the bank.

An application will need to be made to the Court and there will be a hearing with both parties giving representations as to whether an Order should be made.

Winding Up Proceedings

If your debtor is a UK registered company and your debt is for over £750, you could apply to the court for a winding-up petition. In order to be successful in a winding-up petition, you will need to prove that the debtor cannot pay its debts.

This can be an expensive process and there is no guarantee of payment. If the debtor company has no assets, you will be unable to recover your debt.

Insolvency Proceedings

If you are owed over £5,000 from an individual then you can apply to bankrupt your debtor.

This can be an expensive process with no guarantee of payment thereafter. If the debtor is bankrupt, they will likely have very little to no money or assets.

Following a successful bankruptcy order, the debtor’s assets will vest in the trustee in bankruptcy which means they will be restricted in how they deal with their property. They will face losing all property and assets whilst the trustee sells these off to clear the debtor’s debts.

Contact us

As well as being experts in debt recovery, Rix & Kay also has a specialist insolvency practice headed by Richard Ludlow.

For more information on our debt recovery or insolvency practice, don’t hesitate to get in touch with Jordan Ismail or Richard Ludlow.