How Do I Enforce My Judgment?
Why Take Out A County Court Judgment?
Making a claim in a County Court and obtaining County Court Judgment (CCJ) against your debtor will not guarantee that you get the money that is owed to you. However if you don't obtain a CCJ, then your debt is at risk due to 'The Statute of Limitations' on commercial and consumer debt, which is 6 years.
If you have obtained a CCJ, then there is no 'Statute of Limitations' and you can enforce the judgment at any time in the future. It might be that the debtor's circumstances have improved and therefore it would become easier to collect.
I Have Obtained A Judgment and the Debtor Still Won't Pay
In this case you will have to consider enforcement proceedings. There are many ways in which this can be done and we have explained these below:
- County Court Bailiff - County Court Bailiffs are employees of Her Majesty's Courts & Tribunals Service and are responsible for enforcing orders of county courts by recovering money owed under CCJs. They can seize and sell goods to recover the amount of the debt. They can also serve court documents and effect and supervise the possession of property and the return of goods under hire purchase agreements.
A County Court Bailiff can enter a premises to seize goods and sell these at public auction, they can enter a property through an open door or window (front and back) and can climb over fences and gates, but cannot break them down. If the bailiff has entry previously (made a levy) or has been forcefully removed they can then use reasonable force to gain re-entry to inspect the goods or remove them.
- High Court Enforcement Officers (HCEO) - HCEO's are authorised by the Lord Chancellor to execute High Court writs. They can seize and sell goods to cover the amount of a debt owed. They can also enforce and supervise the possession of property and the return of goods. They replaced Sheriff's Officers in April 2004. Legislation relating the High Court Enforcement Officers includes the Sheriffs Act 1887 and the Courts Act 2003. The Sheriff's Office is still used as a trading name.
Unlike a County Court Bailiff, who is a civil servant, an HCEO is an Agent of the High Court appointed by the Lord Chancellor. In order to appoint an HCEO, the CCJ is transferred to the High Court and a writ of fieri facias is issued (this will be called a writ of control once the Tribunals, Courts and Enforcement Act 2007 Part 3 comes fully into force). The debt must be over £600 and it cannot be one where judgment has been obtained for a debt owed under the Consumer Credit Act 1974.
Once the writ is awarded, the HCEO will attend the debtor's premises to seize goods to sell at auction to recover the amount owed. The debtor can avoid the removal and sale of assets by either paying in full or agreeing a repayment plan. The assets will remain seized and the property of the court, normally left in situ under a Walking Possession Agreement, until the debt is fully cleared. Any proposed repayment schedule will have to be agreed by the claimant. Should the debtor subsequently default on a payment, the claimant can instruct the HCEO to attend to remove and sell the seized assets.
- Order to Obtain Information (Oral Examination) - This application requires the debtor (or an officer of the debtor if it is a limited company) to attend court to answer questions on oath about their current financial situation and to provide details of their assets, income and outgoings. It is not in itself an enforcement procedure but may be useful if you have suspicions that the debtor has transferred assets to avoid payment. If the debtor fails to attend the hearing, they commit a Contempt of Court for which they can be imprisoned and/or a fine imposed.
- Attachment of Earnings - If your debtor is employed, you can apply to the Court for an 'Attachment of Earnings' order. The Court will compel the debtor's employer to deduct a sum of money directly from the debtor's salary. The Court will administer these payments although they do make a charge on any monies recovered.
You can not apply to the court if your debtor is self-employed, unemployed, in the armed forces or in the merchant navy.
- Third Party Debt Order (Formerly known as a Garnishee Order) - Is a means by which money can be recovered from a third party who is either holding money for the judgment debtor (usually a bank or building society) or who owes the judgment debtor an amount of money for whatever reason. A Third Party Debt Order is made up of two things:
an interim order freezing a bank account, or if the third party is not a bank or building society but a debt owing from the third party to the judgment debtor then an order preventing the third party from paying out the debt; and a final order requiring the third party to pay the debt to the judgment creditor.
- Charging Order - A charging order is an order obtained from a court or judge by a creditor, by which the property of the debtor in any stocks or funds or land stands charged with the payment of the amount for which judgment shall have been recovered, with interest and costs.
Obtaining a Charging Order is complicated and costly, so it is only worth considering on larger debts. The creditor must first apply for an Interim Charge and then has to attend Court for a final hearing. In between times, there are documents that must be served on the debtor, any joint owner and anyone else who has an interest in the property, i.e. the mortgage company and any other charge holder. The Charge secures the debt on the property and will survive even if the debtor declares bankrupt.
- Statutory Demand - A Statutory Demand in England and Wales, can be used to ask for payment of a debt from an individual or company. When an individual or company gets a Statutory Demand, they have 21 days to either: settle the debt or reach an agreement to pay. If there's no agreement, whoever issues the Statutory Demand can start: bankruptcy proceedings, against individuals who owe £5000 or more, or a winding up petition against a limited company that owes more than £750.
The Statutory Demand is usually served in person by a process server who will then provide a Certificate of Service to confirm that the demand was served.
- A Bankruptcy Petition - Bankruptcy in England and Wales: The term bankruptcy applies only to individuals, not to companies or other legal entities. Declaring someone bankrupt is not cheap. Before a creditor presents a bankruptcy petition he must usually first serve on the debtor a statutory demand (see above) in the prescribed form requiring the debtor to pay the sum claimed within 21 days of service of the demand. The debtor may apply to the court to set aside the demand on the basis that the debt is disputed on bona fide grounds or that he has a counterclaim, set off or cross-demand which equals or exceeds the amount of the debt claimed by the creditor. If the debtor fails to pay the sum claimed in the demand or to apply to set aside the demand or if his application to set aside the demand is dismissed by the court, the creditor may present a bankruptcy petition. Alternatively, a creditor may petition without first serving a demand if execution on a judgment has failed. In either case the debtor must owe the creditor at least £750 and the claim must be for a liquidated sum, i.e. a fixed sum of money (not, for example, damages).
When an individual is made Bankrupt they will initially be interviewed by an officer of the Court, known as the Official Receiver. They will be examined as to what assets they own and what their income and expenditure is. If they have any equity in these assets, such as their home, car, caravan, stocks & shares, savings, Jewellery etc., then the value of these assets will automatically transfer to their Trustee in Bankruptcy, who will then sell the assets and distribute a dividend to creditors. In addition, the Bankrupt's income and expenditure will be examined and after calculating what they need to live on, if there is any surplus, this will be taken from them, save for £20 per month. This is known as an Income Payments Agreement (IPA) and will continue for 36 months, although the individual will be discharged from Bankruptcy automatically after a period of 12 months. Whilst the individual is undischarged, they have to comply with certain restrictions and must report any change in their circumstances, to their Trustee in Bankruptcy. Bankruptcy seriously affects an individual's ability to obtain credit or a mortgage at any time in the future.
- A Winding-Up Petition - Very similar to a Bankruptcy Petition but it is for limited companies. You can apply to the court to 'wind up' a company if it can't pay its debts of more than £750. Your application to the court is known as a 'winding up petition'. If successful, the company will be put into liquidation. Before you petition the court you must be able to prove the company owes more than £750 and prove that the company can't repay what they owe. As with bankruptcy, applying to 'wind up' a company is not cheap.