Debt recovery enforcement options
Obtaining a County Court Judgment (CCJ) is only the first step to recovering the sums that are due to you. A CCJ does not give you the automatic right of recovery.
The most effective method of enforcement will depend largely on the debtor’s circumstances. However, you are not restricted and may pursue as many methods of enforcement as appropriate, in an attempt to make a successful recovery.
We consider the appropriate method of enforcement, based on whether:
You are likely to get your money and the Court fee from the Defendant;
The Defendant owes other people money or has other Court Judgments;
The Defendant owns any goods or assets which can be taken and sold at auction (cars being the best example);
The Defendant is working;
The Defendant has other earnings, such as income from investments;
The Defendant has a bank account;
The Defendant owns property;
Anyone else owes the Defendant money.
Your debt recovery options are therefore as follows:
(i) Order to obtain information
An order to obtain information is not a method of enforcing your judgment. It is a way of finding out about the Defendant’s income and assets.
The debtor is required to attend court under oath, to answer pre-arranged questions by the court officer. This can be a useful tool to encourage an offer of repayment.
The Order must then be personally served on the debtor.
If the debtor does not attend the hearing a further date will be listed by way of a Suspended Committal Order. This means that unless the debtor attends the second date, there will be a warrant issued for his arrest.
(ii) Trace and status
We can instruct a Tracing Agent to investigate the debtor’s whereabouts and assets. The information reported by the agent may include employment status, accommodation status and current address.
(iii) Charging order
If we are satisfied that the debtor owns a property, we can apply for a Charging Order to be registered against the title of the property. If the property is subsequently sold by the debtor or we obtain an Order for sale, the registered charge in your favour will be paid before the property can be sold provided there is sufficient equity.
Dependent on the value of the Judgment and additional factors, you may be able to enforce the Charging Order by way of an Order for Sale. Alternatively, you will have to wait until the debtor sells the property.
In the event the property is repossessed and sold, the mortgagee in possession will pay the Charges out of the proceeds of the sale. If the proceeds are not enough to cover all the Charges then you will need to chase the debtor again.
(iv) Third party debt order
A third party debt order is usually made to stop the defendant taking money out of his or her bank or building society account. The money you are owed is paid to you directly from the account. A third party debt order can also be sent to anyone who owes the defendant money.
You should consider carefully when to make your application as the court order which is initially sent to the third party will only ‘freeze’ money held in an account on the day it is received by (served on) the third party.
(v) Attachment of earnings
An attachment of earnings order is a method by which money will be stopped from a defendant’s wages to pay a debt and as such will only help if the defendant is in paid employment. The order will be sent directly to the debtor employer.
You can ask for an attachment of earnings order unless the defendant is:
(vi) Warrant of execution
For debts between £50 and £600, it is possible to instruct a County Court bailiff to attend the debtor’s property and seize goods up to the value of the debt. The court bailiff fee in respect of the warrant is £100 and our costs are £40 plus VAT.
Alternatively, if the debt is above £650, a High Court Sheriff can be instructed.
An alternative form of enforcement is to commence an insolvency process, usually by service of a Statutory Demand. This is more costly, and is a step on behalf of all creditors, rather than you as an individual creditor. However in some cases, it is the most appropriate option and we can discuss this with you i.e. successful forms of debt recovery or where Judgment is already obtained.
It must be noted that a bankruptcy or winding up petitions can only be presented for debts exceeding £750.00 which are not disputed.
If you need expert advice on recovering debt and would like to find the right debt recovery enforcement options, please contact Peter Worrall.