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Many people obtain County Court Judgments and think that, automatically, the Debtor will pay. Unfortunately, this is not always the case.

Ensure that you don’t throw god money or bad and get the best result by getting good legal advice.

Consider enforcement right from the beginning

Although a CCJ will blacklist that person with credit agencies, it will not ensure that the judgment debt will be paid. This is where enforcement comes in but it is also important to establish before issuing proceedings against a Debtor, whether he has any assets or capital to repay the debt plus costs and to check whether the defendant already has unsatisfied judgments against, him, her or it. If there are already judgments, you may find that the defendant takes the view that he, she or it has nothing to lose by having another one. Legal proceedings against a limited company perhaps add another layer of risk due to limited liability. Unfortunately, some people with limited companies don’t care if that business goes under and will just start up again with a new limited company. This is a warning factor that your debt may also remain unpaid.

What happens if the debtor doesn’t pay – can’t pay or won’t pay?

County Court Judgments are usually in force for 6 years and can be enforced in a number of ways It is important to understand and recognise that the civil court will not do anything against the debtor simply because there is a judgment. If the judgment debtor does not pay, it is up to you as judgment creditor to take further action and this will involve delay, additional cost and no certainty of outcome.

Time limits on enforcement of a Judgment

You have 6 years to enforce a judgment before it becomes time barred. Some creditors wait to enforce if they know the debtor is in financial difficulties in the hope that at some stage the debtor’s situation may improve. Others take the view that it is important to keep maximum pressure on a debtor and to try and recover monies before other creditors do.

 There is no right or wrong approach. What’s important is to find out as much as you can, assess all the factors and obtain good and experienced legal advice to maximise the chances of successfully enforcing a judgment. 

This is clearly a sensible option where you, as judgment creditor, know very little about the judgment debtors’ assets, so you don’t know which is the best next step.

The potential drawback with this method of enforcement is that the debtor will all too often seek to delay and frustrate the process. Many debtors claim ignorance or don’t even turn up for several court appointments and the process is far too often toothless in that the court does not do enough to ensure that debtors turn up and make appropriate disclosure both in terms of evidence and documents to enable the creditor to find out more about how best to enforce going forward.

Other Options

Bankruptcy or winding up (for company)

This is an expensive and potentially risky option. To start off with, the debtor must owe at least £750.00 and if he, she or it has many other creditors, especially secured creditors, you may end up getting little or nothing. As a prelude to bankruptcy or winding up, you may opt to serve a statutory demand, which at least does not involve expensive court fees and may flush out the debtor as to whether he, she or it has anything to lose. Generally, it is only worth considering this option if you have a significant amount owed, have checked that there aren’t other secured or unsecured creditors and understand that including expensive court issue fees and legal costs, it may cost you at least £2,000.00 plus vat just to secure an order.

Attachment of Earnings

If the Debtor is now employed, this type of order would ensure that a creditor would receive a monthly sum directly from the Debtors earnings. This would be sent to a collection office for the creditor to collect, but depending on the Debtor’s living expenses or circumstances, the Court may only order repayment in small instalments. However, this may be a realistic option for a creditor if they cannot obtain a charging order against any property that the Debtor may own or have an interest in.

To obtain an attachment of earnings order, you need to pay a Court fee but this can be added to the debt to be recovered. If the Debtor does not reply to the application, making an offer for payment and listing his creditors, there will be a Court hearing at which the Debtor would have to detail his financial circumstances. The Court would then decide as to whether an Order can be made. A rough estimate to apply for this Order is approximately £500.00 plus vat, plus the court fee and an addition fee of £100.00.

Third Party Debt Order

This Order effectively freezes any accounts of the Debtor and monies owed to the creditor would be paid from that account. The difficulty with this option is generally finding out about any accounts that the debtor has in the first place. A debtor will be highly unlikely to volunteer this information and it may need an application first for the defendant to attend court and be questioned about assets and liabilities. Many debtors only partially if at all comply with that process.

Bailiff to seize goods and then sell

Many creditors consider this as a first option but there are many potential drawbacks – firstly, there is often a delay in the bailiffs attending. the most fundamental problem generally is that bailiffs have no power to force entry into residential premises, only commercial premises and it can be difficult to find or obtain goods worth anything like the value of a debt, especially if items have been removed by a debtor who knows how the system works.

 If you are having issues with a debtor/defendant and wish to obtain a County Court Judgment or have a judgment and want to enforce it, please contact us for further advice. 

 If you have a CCJ against an individual and that individual owns a property, this can be a good enforcement option but will not necessarily mean you will get paid quickly. 

First, you will need to ascertain what property the Debtor owns or has an interest in which can be difficult especially for any properties owned which the debtor doesn’t appear to live in – there is no method of being able to search against a person by name to find out which properties he or she owns and ownership can also be beneficial rather than legal ownership) and then to make a decision if there is likely to be any equity in the property, which again may be extremely difficult.

If you have an address or addresses for the debtor you can obtain Office Copies from the Land Registry detailing the property and any charges or mortgages already held over the property (although not the amount secured), for a modest fee.

Applying for charging Order then Order for Sale

If a Charging Order is obtained, the Debtor would have to satisfy the debt when the asset is sold. You may apply for an order for sale but may not be successful bearing in mind the debtor may have family members living at the property and prior chargeholders such as mortgage lenders may oppose an Order. Consequently, whilst you will secure your right to payment when the property is sold, it may be many months or years before you actually get your money.

Process – Interim Order then final Charging Order

It is usual for an Interim Order to be made without a Court hearing and a date for a full hearing will be set at this time. The Court will decide whether to make the Charging Order final at the full hearing, which the Debtor may attend to defend the application. In the interim, a creditor should register a caution against the Debtor’s property in order to ensure that the Debtor cannot sell it before the hearing. There is a fee to register a notice on the property. There are a number of factors that the Court will take in to account when deciding whether to make a charging order final, as follows:

  • The personal circumstances of the Debtor;
  • Whether the Debtor would suffer undue hardship as a result of the charging order forcing the sale of the home.
  • Whether there are any other creditors and whether they would be disadvantaged if such an order were to be made. The applicant must list all known creditors on the application.
  • What the extent of the interest in any property is i.e. whether it is held in joint or sole names.
  • Whether the Debtor’s property is in negative equity.
  • Whether there are any other ways the Court could enforce repayment

 For help with applying for a Charging Order or advice on enforcement generally, get in touch with our solicitors.