You have been through the debt recovery process and obtained a county court judgment, but you still haven’t received the money – what’s your next step? How do you recover your money?
You have six years from the date of the judgment to enforce the order, but you should not delay. We have provided a brief overview of the options available in this respect. Before deciding how to proceed, you should consider if the debtor has any assets against which the judgment can be enforced or if they, in the case of an individual, are currently employed.
If they have no assets or are unemployed, then you may have to consider whether it is cost effective to proceed; you could simply be throwing good money after bad. But if you don’t know what assets the debtor has, we can help you by conducting a variety of searches to ascertain their position.
Sometimes the threat of enforcement alone can prompt payment from a debtor, but if enforcement is necessary, there are a number of options available to recover your money.
Writ of Control
If you are owed more than £600, we can instruct High Court Enforcement Officers(HCEO) to obtain a Writ of Control. This entitles them to take control of goods belonging to the debtor to raise funds to satisfy the judgment. For debts under £600, then the county court bailiff can be instructed to do this.
Attachment of Earnings
An Attachment of Earnings Order (AOE) can be used to ensure that a debtor’s current employer deducts a proportion of their earnings until the judgment debt is paid. An AOE is a popular enforcement method as it is inexpensive and is usually successful in obtaining some payment. Bear in mind that the court will never order a debtor to pay more than they can afford, and an AOE will include a protected earnings limit which the debtor must earn before deductions are made.
If the debtor owns a property, we can apply for a Charging Order to be registered against their interest in that property. The Charging Order itself does not raise funds to satisfy a judgment debt, but if the property is subsequently sold, the registered charge in your favour will be paid, provided there is sufficient equity.
If the debtor has no intention of selling the property, we may be able to obtain an Order for Sale, but this is subject to a number of factors including the value of the judgment, the value of the property and who lives there.
Third Party Debt Order
Third Party Debt Orders enable sums owed to a debtor by a third party (e.g. the debtor’s bank) to be frozen and paid to the creditor to satisfy the judgment. An Interim Order is granted without notice to freeze the debtor’s account, pending a hearing (on notice) to determine whether the third party should be ordered to pay the money owed to the debtor direct to the creditor.
This method would be particularly useful if you knew that money was due to be cleared into the debtor’s account and that the account was in credit.
Application for order that debtor attend court for questioning
This is not an enforcement procedure as such, but it is an application for the debtor to provide details of their assets to the court. They would be required to provide documents such as pay slips, bank statements, building society books, share certificates, mortgage statements, hire purchase and similar agreements, utility bills etc to prove their financial position. The court could then assess how the debtor would pay the debt owed. If they fail to attend, they could face imprisonment for contempt of court. If they comply with the order but then fail to pay, the creditor can use the information obtained to decide how to enforce the judgment.
If it is clear the debtor cannot pay, or will fail to comply with any of the above processes, you may then wish to consider insolvency proceedings against them.
Insolvency processes must not be used as a mere threat and must only be used when you are genuinely owed an undisputed debt (for example, by attaining a county court judgment). This process can be used against individuals and companies and involves serving a statutory demand before issuing a bankruptcy petition (for individuals and partnerships) or a winding up petition (for companies and limited liability partnerships).
This is an expensive process and does not always guarantee payment, as you will be placed in a pot with other unsecured creditors and payment will be made on a pro-rata basis, subject to the value of any assets realised in the debtor’s insolvent estate.