When a
judgment is obtained it becomes a matter
of public record as a "County Court Judgment" or CCJ. The
Defendant is formally notified by the
Court as to how much they should pay and when it should be paid. In theory the
Defendant should should discharge the judgment within 7 days and if they do so
the record of the judgment is removed and there is no penalty on the credit
record of the Defendant. As far as the credit agencies are concerned the CCJ
should be discharged within 30 days for a clean record to be achieved.
Unfortunately, many Defendants simply ignore the CCJ and do not bother to
pay up. In this case the Claimant must
look at Enforcement options. The options available are:
- To instruct the Court
Bailiff to collect the outstanding money - a Warrant of Execution.
- Apply for an Order to Obtain
Information.
- Apply for an Attachment
of Earnings Order.
- Take out a Charging Order
on the Defendant's property.
- Apply to the Court for a
Third party Debt Order.
- To make the Defendant
bankrupt or if a company to wind it up.
This is an instruction from the
Court for the Court Bailiffs to
collect the outstanding funds from the judgment. The bailiffs can visit the
Defendant and collect the outstanding funds or seize goods to the value of the
funds if required.
There are a number of rules which the Court Bailiffs
are constrained by:
- They can be refused
entry to the Defendant's premises.
- Essential items for
sustaining life cannot be removed (bed, cooking utensils etc).
- Essential tradesman's
tools cannot be removed.
- They cannot break in to
the Defendant's premises (unless the Claimant is the property
landlord).
Use of the Warrant of Execution is the most
used enforcement option and many Defendants will pay up immediately rather than
have persistent visits from the bailiff.
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| Order to Obtain Information |
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If the Claimant has reason to
believe that a Defendant who has failed to discharge a Court Order has adequate
assets to discharge same they can apply to the court for an order compelling
the Defendant to attend and provide information about their financial assets.
This option is not strictly an Enforcement option but does provided the
Claimant with adequate information for the selection of the most appropriate
option.
The process provides a number of controls in order that the
Court may properly ensure that both the Claimant and Defendant are treated in a
fair manner. The Defendant (called Judgment Debtor for this procedure) is
served with a notice requiring their attendance at court with all or part of
the following information:
- Details of income
including pay slips, pension income, investment income etc.
- Full details of all
bank accounts with original statements and pass books.
- A statement of
income/expenditure showing all income and outgoings.
- An asset statement
showing investments (stocks, shares, bank deposits, property etc).
- Proof of Income Support
payments if applicable.
- Proof of rent payments,
Council Tax, utility payments and all other outgoings.
If the Judgment Debtor is a company management
accounts supported by audited accounts for two years must be
produced.
During the hearing information is provided by the Judgment
Debtor on oath to an officer of the court and the Claimant has the option to
submit relevant questions to the court officer in advance.
The
requirement for the Judgment Debtor to attend at the hearing is not negotiable
and the court can impose strict penalties including imprisonment for failure by
the Judgment Debtor to attend. It must be noted that the Judgment Debtor has
two opportunities to attend and the court may require the Claimant to provide
travel expenses to the Judgment Debtor if they claim to be
impecunious.
If the Judgment Debtor is a company, a named officer of
that company will be required to attend on behalf of the company.
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| Attachment of Earnings Order |
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This is an order which is
forwarded to the Defendant's employer. It is a strict order which instructs the
employer to deduct an amount set by the court from the defendant's earnings.
This is carried out each pay day be it weekly or monthly. The deduction is
forwarded by the employer to the Central Attachment of Earnings Payment System
who are responsible for collecting such payments.
The court will take
into account the Defendant's financial status prior to granting such an order
and if the Defendant has very low earnings or is supporting a large family may
decline such an order.
This is a "Charge" over the
Defendant's property. It is registered with the Land Registry and the property
cannot be sold without the Charging Order being paid off ( much as with a
building society. Charging Orders can be complicated and it is best to use a
solicitor when placing one.
Two things should be remembered
- You can only place a
Charging Order on a property which is owned by the Defendant only - if the
property is jointly owned it cannot be done without the consent of the joint
owner.
- You may need to wait
for several years until the property is sold before you can collect your
money.
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| Third Party Debt Order (TPDO) |
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This was previously called a
Garnishee Order. Provided that the Claimant knows the banking details for the
Defendant they can apply for a TPDO to be placed over funds held by the
Defendant in their bank account. This effectively "freezes" the account until
the Claimant is paid. It is necessary to be aware of a number of important
things:
- There must be adequate funds in the bank
account otherwise the application will fail.
- The Claimant must attend court for the TPDO
hearing.
- The Order will only apply to the account
cited in the application - if the Defendant has other accounts these will not
be included.
The banks now have a standard format when they
respond to the court following an application for a TPDO and cannot by law fail
to respond.
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| Bankruptcy or Company Winding Up |
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This can be very effective if the
Defendant has cash -but is stubbornly refusing to pay. The problem is that if
the Defendant has no money the cost of this action will never be recovered -
along the the amount of the Judgment. However, if the Defendant has money this
can be a very good way of bringing them "to the table" and providing a very
serious ultimatum.
Prior to such an action it is best to obtain as much
information as possible about the Defendant such as the property owned, if a
company obtain the most recent accounts and an analysis of the Claimant's own
experience and dealings with the Defendant.
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