You have been to court, and have been awarded a County Court Judgment (CCJ) in your favour against a Defendant. But how does this piece of paper lead to recovering the money that you are owed? This briefing note will set out the options available to you.
There are many different options a Judgment Creditor can take in order to enforce a Judgment. Each has its own merits, and the best course of action will depend on the specifics of the situation.
- Warrant of Control
- Writ of Control
- Charging Order
- Attachment of Earnings
- Third Party Debt Order
- Statutory Demand
- Bankruptcy Petition
- Winding Up Petition
Warrant of Control
If your Judgment is under £600 you have the option to acquire a Warrant of Control from the Court. This is an order that allows a County Court Bailiff, a bailiff employed by the Court, to attend the debtor’s premises, seize goods and sell them to pay your Judgment debt.
In reality, this option is best used against businesses who will own tools, vehicles and equipment that can be seized. Most individuals tend not to have assets of sufficient value, with cars being the obvious exception (although cars under finance cannot be seized!).
Writ of Control
If your debt is above £600, you can acquire a Writ of Control from the High Court. This is similar to a Warrant of Control; it gives a High Court Enforcement Officer, a bailiff not employed by the Court, the authority to attend the debtor’s premises, take control of goods and sell them to pay your Judgment debt.
High Court Enforcement Officers recover the majority of their costs from the Judgment debtor. This gives them a clear incentive to make a recovery as they only get paid when you do!
Again, this method is best used against businesses, as the majority of household goods are unable to be seized by High Court Enforcement Officers.
Instructing an enforcement officer to attend a debtor’s premises is relatively inexpensive. It also has the benefit of getting “boots on the ground”, which can give you an indication whether enforcement is likely to be successful, if the debtor will acknowledge the debt or whether they are simply burying their head in the sand. Having someone show up at a debtor’s home or business demanding payment of a Judgment can often prompt an otherwise silent debtor into action.
A Charging Order is a method to secure your Judgment as a charge over an asset of a debtor, usually a house or property. This can be useful if there is sufficient equity in a property – less so if there is little equity.
Once a charging order is registered, you have the option to apply for an Order for Sale to force the Judgment debtor to sell their property. The success of this, however, will depend on, among other things, the value of the debt, the equity in the property and the circumstances of the debtor.
Attachment of Earnings
You can apply to the Court to grant an Attachment of Earnings Order. This is an order that forces the debtor’s employer to deduct payments from the debtor’s wages to pay your Judgment. If the Employer does not make the necessary deductions they can be fined by the Court.
This method only applies to individuals and is dependent on them being employed and the Court deciding that they earn enough to support themselves and their dependants. This is known as the Protected Earnings Rate and will be determined by taking into the account the debtor’s wages, dependants and expenditure.
Third Party Debt Order
If you know a third party holds money on behalf of the debtor (e.g. they have a bank account that you know of) you can apply to the Court to have the assets frozen and released to you in payment of the Judgment debt.
This method of enforcement is effective if you know the debtor’s bank account and there are sufficient funds in the account at the time of the application, or if you know that the debtor’s wages will be paid into a bank account on a certain day.
If an individual owes you more than £5,000 you can serve a statutory demand against them. This is a formal demand for payment within 21 days. If the debtor fails to make payment (or fails to apply to set the statutory demand aside) then you are entitled to issue a petition for the debtor’s bankruptcy.
If a company owes you more than £750, you can also serve a statutory demand, giving them 21 days to make payment. If payment is not made, you are entitled to petition to wind up the company. Note:- You are not required to serve a statutory demand against a company before you petition for their winding up.
If an individual fails to respond to a statutory demand, you can issue a bankruptcy petition against them.
If a bankruptcy order is made, a trustee in bankruptcy will be appointed to collect in the debtor’s assets and make a payment to their creditors. Your costs and any debt you are owed are included in this procees but you (and other creditors) may only receive a share of your debt. However, given the consequnces of being made bankrupt, petitions can be a useful tool in encouraging a debtor to raise funds to pay your debt.
Winding Up Petition
If a company owes you more than £750, you can issue a winding up petition, regardless of whether a statutory demand has been served or not.
Once an order is made, a liquidator is appointed to gather in the company’s assets and attempt to satisfy the debtor’s liabilities, including your debt and costs. However, the assets are used for the benefit of all creditors therefore you (and other creditors) may only receive a share of your debt.
Please feel free to contact Nick Dent on 01642 610350 or firstname.lastname@example.org should you require any assistance in enforcing a County Court Judgment.