Enforcement Options After Judgment

After successfully obtaining a judgment against your debtor, as a creditor, you must now consider the possible enforcement options available to you. It is up to you as a creditor to pursue enforcement. You have six years to enforce your judgment and following this point you must have permission from the court therefore it is important you do not delay.

Statistically, enforcement is the most difficult part of the litigation process as a debtor may not have any assets or he may turn out to be very good at hiding from creditors. You must therefore consider all the options available to you, and the circumstances of your particular debtor, to determine how best to proceed. Sometimes the threat alone of enforcement may prompt payment but if enforcement is required there are a number of methods available.

An Order to Obtain Information

If you do not know much about your debtor’s financial position then it may be in your interest to pursue an Order to Obtain Information. Orders to Obtain Information are governed by Part 71 of the Civil Procedure Rules.

Firstly, you must apply for an order for the debtor to attend court for questioning (under oath) about his finances. Questioning is normally is carried out by a court offer but a creditor can request that instead a hearing takes place before a judge if there are reasons to do so.

In the event a debtor fails to attend, they refuse to take the oath at the hearing or if they refuse to answer any question then a judge may make a committal order against them (for the debtor’s committal to prison) which is suspended provided the debtor complies with the order and attends a rescheduled appointment to attend court at a later date.

Orders to obtain information are useful to a creditor to obtain important information about a debtor. As an example, from the questioning it may be discovered:

• A debtor has a very good job so an Attachment of Earnings Order can be pursued; or
• A debtor owns a property or some land so a Charging Order may be sought.

Taking Control of Goods

The personal possessions of a judgment debtor can be seized. Any goods seized can be sold, at auction, to recover an amount of equivalent value to the debt you are owed. Examples of goods can be their car or household items. Taking control of goods is governed by CPR Part 83.

The amount of the judgment dictates in which court it can be enforced:

• Judgments of £5,000 or above must be enforced in the High Court (except for consumer credit proceedings) by obtaining a writ of control. This is then enforced by High Court Enforcement Officers.
• Judgments under £600 must be enforced in the County Court by obtaining a warrant of control. This can then be enforced by a County Court Enforcement Agent (also known as bailiffs).
• For judgments between £600 – £5,000 either court can be used however Fosters would recommend High Court Enforcement Officers as they are generally more successful in recovering goods / monies from the debtor.

High Court Enforcement Officers or County Court Bailiffs are officers of the court who are empowered to carry out certain functions including serving documents and seizing goods to satisfy judgments. They can attend the premises of a debtor and:

• seize goods if possible;
• take control of goods (this means to leave them on premises to allow time for the debtor to pay); and
• take payments towards the judgments or set up payment plans.

Certain goods cannot be seized such as household equipment required for the debtor’s basic domestic needs or tools, vehicles and equipment necessary for the debtor, for his personal use, in his employment or business.

Goods that seized are sold at a public auction if the debtor fails to satisfy the judgment debt. The amount of the judgment and the associated costs will be deducted from any money raised. Any surplus is then sent back to the debtor and your judgment debt is satisfied.

Attachment of Earnings Orders

CPR Part 89 governs Attachment of Earnings orders; if an order is granted then the debtor’s employer is required to pay the court weekly or monthly instalments out of the earnings of the debtor. The court then sends the funds collected on to you as the creditor.

Two assessments are made when determining if debtor should pay. Firstly the normal deduction rate (the instalment payments that the court thinks reasonable for the debtor to pay towards the judgment debt) and the protected earnings rate (the amount the court thinks reasonable for the debtor to live on). If the debtor’s income falls below the protected earnings rate then unfortunately an order will not be made but if you are aware your debtor is in a good job then this is worth pursuing.

Third Party Debt Orders

A debtor may be owed money from a third party; a judgment creditor can therefore compel the payment of the debt direct to him rather than to the debtor. CPR Part 72 governs third party debt orders.

To obtain a third party debt order a creditor applies to court, without notice to debtor, with written evidence describing debt owed by the third party to the debtor. The court then issue an interim order directing the third party not to pay the money owed to the debtor but to instead attend court. At the hearing, the court make a final order (unless there is a good reason not to) requiring the third party to pay the sum owed to the debtor directly to you as the creditor. If you are aware the debtor is due payment from a third party then this may be the best option to pursue in your particular legal matter.

Charging Orders

Governed by CPR Part 73, charging orders are very useful if you know a debtor owns property or land.

If a charging order is obtained, you as the creditor effectively become a mortgagee and have security for your judgment against the debtor’s property. This option may not be useful if you are aware there is no equity in the land or property and it is also important to understand no immediate payment comes from obtaining a charging order. You can however apply for an order for sale of the land or property to recover the funds due to you under the judgment.

If you are successful in recovering the judgment debt from the debtor after you have secured a charging order you must then apply to remove the charging order.

Bankruptcy / Insolvency

If your debtor is an individual then bankruptcy proceedings can be considered. Alternatively if your debtor is a company then winding-up proceedings can be considered. If you require any advice in this respect please contact our Litigation Department who would be delighted to assist you.

Stay of Execution

If a debtor wishes to stop enforcement of the judgment then he may apply for a stay of execution. He would need to give evidence of his means and show (via a witness statement) that he is unable to pay or it is not practical to enforce the order. If successful, a stay of execution is granted by the court provided the debtor pays off the debt in instalments.

Fosters can provide our advice and assistance throughout the whole debt recovery process including from the initial letter of claim right through to enforcement. If you require any debt recovery assistance from Fosters feel free to call us to discuss your legal matter and we would be delighted to assist.