If you find yourself in the unfortunate circumstance where you have obtained a money judgment and the judgment debtor has failed to pay the sum owed to you, fear not. There are various options available to you to help you get paid.
Whilst there are various methods of enforcement that may be deployed, some may be more effective depending on the debtor’s circumstances.
As a general point it is important to have one eye on the enforcement stage prior to issuing a claim so that you do not find yourself in a position post-judgment where you realise that the judgment debtor has no means to pay. This is something we always consider with our clients at the outset.
It is important that the judgment debtor has been given an opportunity to pay the judgment debt, usually that is 14 days but Courts sometimes order a little longer.
The most common methods of enforcement options are:
Order under CPR 71 requiring the Debtor to Attend Court
An Order for the debtor to attend Court is what it says on the tin, the judgment debtor (or if it is a company a director of the judgment debtor) is required to attend Court to disclose their financial position. This is beneficial if you are unsure of the debtor’s financial position. The debtor will be required to answer questions on oath and produce evidence. The process involves making an application without notice. This will allow you to determine the debtor’s means in a cost and time effective manner. You may then wish to pursue with a Charging Order or an Attachment of Earnings Order (discussed below). The threat of having to attend court and answer to a Judge is sometimes enough for the judgment debt to be paid!
High Court Enforcement Officer / Bailiff
If the debt is above £600 you can instruct a High Court Enforcement Officer to seize the debtor’s assets if they fail to pay. If the amount is less than £600.00, you can instruct the County Court Bailiff instead. A High Court Enforcement Officer will first obtain a Writ of Control (allowing them to remove goods to the value of the judgment and their fees). They will then send the debtor a letter (Notice of Enforcement) which allows them 7 days to clear the debt. Should the debtor fail to make payment or propose a payment plan, they will attend the debtor’s address to collect the judgment amount. The High Court Enforcement Officer usually reports back with the debtor’s assets and will seize and sell (usually via auctions) those of value. There is a cost to instruct a High Court Enforcement Officer, however, their fee is recoverable from the debtor (i.e. added on to the judgment debt).
A Charging Order is an option if the judgment debtor either owns or has an interest in a property. A Charging Order secures your judgment amount against the property for the sum owed. A Charging Order does not guarantee immediate payment. If the debtor fails to pay following a final Charging Order being granted, you can then either wait for the debtor to sell the house in their own time, or seek an Order for sale. An Order for sale must be considered carefully and is something which would vary from case to case (factors usually include; the size of judgment and whether there are other loans or mortgages on the property which are to be paid from the proceeds of the sale).
Third Party Debt Order
A Third Party Debt Order is not the most common method of enforcement as it relies on knowledge that a debt is owed by a third party to the debtor. Most commonly, this will be a bank or building society holding money for a debtor. In order to make an application, there must be some knowledge that the debtor has a banking relationship with a particular bank (for example you may have their bank details from them having paid you previously or you refunding monies to them). A Third Party Debt Order effectively freezes the debtor’s bank account and is seized for your benefit. An application can be made without notice to the debtor, which is beneficial as the debtor will be unaware and therefore cannot drain the funds prior to the interim Order being made.
Attachment of Earnings Order
An Attachment of Earnings Order is beneficial in the situation where you are aware that the debtor is employed. The Court will make an assessment based on what they deem to be a reasonable repayment in line with what the debtor will be left to live on. Should the Court grant this Order, a copy will be sent to the debtor’s employer, who will deduct the amount stated in the Order from the debtor’s wages at source (before the debtor receives the money).
The above is a general overview of some of the most commonly used mechanisms to enforce. Fundamentally, enforcement options are dependent on the debtor’s financial situation. If you would like to discuss the above with our litigation team, please do get in touch.