Overview of the Enforcement Process
Before commencing enforcement action you will need to consider whether the debtor can afford to pay the judgment debt. You have spent money obtaining a judgment and you want to be sure that the debtor has sufficient means to pay before spending more money on enforcement action. If you know the debtor well, you might already know about their assets, income and property. If you don’t know if the debtor has means to pay, you might want to consider asking the court for an order that the debtor attends court for questioning. The court will then obtain this information from the debtor.
County Court Bailiff – Warrant of Execution
If the debt is below £5,000 (except Consumer Credit Act agreements), the County Court can send Bailiffs to attend the debtor’s address to attempt to collect payment and/or remove assets of value that can sold at auction. The funds from the sale of assets are then used to pay the debt.
A court fee of £110 is payable to the County Court who passed judgment.
High Court Enforcement Officers – Writ of Control
High Court Enforcement Officers (HCEO) were formally know as High Court Sheriffs. The County Court Judgment will be transferred to the High Court for a Writ of Control or a Writ of Possession (depending on the debt). This method of enforcement can only be used for debt over £600.
A court fee of £66 is payable to transfer of the County Court Judgment to the High Court. The transfer usually takes between 5 and 21 days.
The HCEO will recover their fees from the Debtor but if they are unsuccessful in collecting the debt there is a return fee of £75 plus VAT which is payable by you, the Creditor.
Should I choose High Court Enforcement Officers or County Court Bailiffs?
- If a County Court Bailiff is unsuccessful in recovering the debt, the case is returned and no return fee is payable by the Creditor.
- HCEO’s charge an abortive fee of £75 plus VAT if they are unsuccessful in recovery.
- HCEO’s recover their fees from the Debtor, giving them more incentive to succeed in recovering the debt so they get paid. Whereas County Court Bailiffs are employed and salaried by the Court.
- HCEO’s have more power to gain entry to premises than County Court Bailiffs.
- A Warrant of Execution (County Court Bailiff) can be quicker to obtain from the court than a High Court Writ (HCEO).
- County Court Bailiffs cannot enforce judgments over £5,000. HCEO’s cannot enforce judgments under £600.
- Through either route the judgment debt (plus interest if applicable), court fees and enforcement costs will be collected from the debtor, if successful.
A Charging Order will secure the debt owed to the Creditor against the Debtor’s property. When the property is sold or remortgaged the debt will be paid if there is sufficient equity following payment of prior charge holders.
The Judgment debt needs to be over £1,000 to apply for a Charging Order and the charge will not accrue interest if it is below £5,000.
The first stage towards securing a charge is to apply to the court for an Interim Charing Order. This can be registered against the debtor’s property to prevent sale or another charge taking priority whilst the Final Charging Order is considered by the court. If the Charging Order is not disputed, or even agreed by the debtor, then the court will generally consider the order without parties having to attend court. If the Charge is disputed the case may be listed for a hearing.
A court fee of £110 is payable to the court with the application. A fee of between £25 and £40 is payable to Her Majesty’s Land Registry to register the Interim Charging Order.
Attachments of Earnings Order
An Attachment of Earnings Order (AEO) is an order from the court served on the debtor’s employer. The amount ordered by the court is then deducted from the debtor’s wages and paid direct to the debtor.
The judgment debt must be more than £50 and the debtor must have been given opportunity to pay the debt by instalments before applying to the court for an AEO.
An AEO will only apply to someone who is employed and is not applicable to self employment or a person on benefits.
A court fee of £110 is payable with the application.
Third Party Debt Order
If you, the Creditor, are aware of money being held on behalf of the Debtor i.e. in a bank account, you can make an application to the court for a TPDO. These applications are treated as urgent by the court and will often go before a Judge within a couple of days of the court receiving it. A Judge will generally issue the TPDO on an interim basis and list a hearing to consider the final order within 28 days of the Order being served on the debtor.
If the court awards the final order, the costs of the application are likely to be recovered from the Debtor. However, it is worth noting that if the application is not successful, the Creditor will bear the costs.
A court fee of £110 is payable with the application.
Apply for a Bankruptcy Order
If the judgment debt is £5,000 or more you may be able to present a Bankruptcy Petition to the court seeking a Bankruptcy Order against the Debtor. If the Debtor is made bankrupt their assets can be realised by a Trustee in Bankruptcy for the benefit of all creditors.
A Statutory Demand should first be served on the Debtor giving them 18 days to make an application opposing the Demand, or 21 days to make payment. If the debt cannot be paid; there are no reasonable prospects of the debt being paid; and the debt is not disputed (which is unlikely if you have a judgment) you may continue with presentation of a Bankruptcy Petition.
Presenting a Bankruptcy Petition is one of the more expensive means of enforcement but also one of the fastest. A court fee of £280 plus an Official Receiver’s Deposit of £990 are payable when sending the Petition to the court.
If successful, the court will likely add the costs of the Petition to the amount owed by the Debtor.
Any assets recovered by the Trustee in Bankruptcy through the bankruptcy process are paid to in accordance with rules set out in the Insolvency Act 1986. As a creditor with a judgment against the Debtor, you will rank equally with all other secured creditors. This may mean that the pot of money available to creditors, if there is any, could be reduced by having to pay the petition costs, secured creditors and the expenses of the bankruptcy before unsecured creditors.
The risk with the bankruptcy process is that you may receive a lot less than you are owed. However, for some Debtors, the threat of bankruptcy is sufficient for them to pay the judgment debt or come to some arrangement to do so. With the right knowledge, and against the right Debtor, one with sufficient assets, this can be an effective method to enforce a judgment.
Take no Further Action
Yes, that’s right – you can sit on the judgment and do absolutely nothing with it. The judgment is registered in the public register which most credit agencies will search prior to giving credit. Therefore, when the debtor needs a new mobile phone contract or a credit card, they will find it difficult to obtain credit. The creditor may then decide they are better off paying the debt after all.
Please note, if you are going to sit on the judgment, the judgment is only enforceable for six years from the date of judgment. There are exceptions such as bankruptcy so if you have a judgment coming up to its 6th anniversary, speak to us now about how best to enforce it.
Trace a debtor
If you are not sure where the Debtor is, or where he works, or what assets he may have, speak to us. We work closely with tracing agents who provide a ‘no return no fee’ service to trace debtor’s and provide details of their assets if required.