Enforcing Court Judgments

Orders to obtain information, oral examination, warrants of control, attachment of earnings, charging orders,

Once judgement is entered for a monetary amount, it must be paid in full, unless the court agrees payment by installments, within 14 days of judgment. If payment is not made enforcement action has to be taken by the party entitled to payment,to enforce the judgment as the court will not take any action to enforce a judgement unless requested to do so. Interest is usually payable on a judgement debt until payment is made, and the cost of applying to enforce judgment will automatically be added to the judgement.

There are various options and enforcement methods open to you. Sometimes, the best option will be obvious. For example, if your judgment debtor owns a house and property you may go for a Charging Order or a Warrant of Execution to send in the bailiffs. If he is in regular employment, you may go for a deduction of Earnings Order. Sometimes however, the best way to enforce your judgment is not clear and you need further information concerning the debtor’s means. This can be obtained by applying for an Order to obtain information.

Orders to obtain information (oral examination)

An oral examination order which requires that the defendant to attend court and provide under oath details of his income, capital, savings, and detail of his outgoings can be applied for. You can then use this information to decide what further enforcement action should be taken.

Oral examination is not in itself a method of enforcement. It does not get any money in but rather than have to give details on oath of his financial circumstances your debtor may decide to just pay up. If not, it will provide you with the information necessary to decide which method of enforcement is most likely to succeed.

Application for an order to obtain information is made on Form N316, which is filed at court with the appropriate fee. The court will them send an affidavit or questionnaire to the defendant, together with an order to attend court. When the defendant attends court, he will be questioned by a district judge or authorized officer of the court. You have the right to attend if you wish, or may write into court with any information you have, or questions you wish to put.Should the defendant not cooperate, either by refusing to attend the oral examination or not answering questions, a penal notice can be applied to the order. Continuing refusal would the be a contempt of court, leading to imprisonment.If you decide not to attend court, you will be informed by the court of the information provided.

The debtor is entitled to ask for conduct money to meet the costs of travel to Court. Pay this money promptly directly to the debtor. If you do not do so and the debtor does not turn up for the hearing you may have provided him with the excuse he needs to excuse his absence and persuade the Judge not to issue a warrant for his arrest.

Warrants of control

A warrant of control is an order that the court bailiffs collect the judgement debt under the special powers they are awarded. It is usually the method of enforcement considered first,and is the method most commonly used. Unfortunately, statistics show that it is not particularly effective. The procedure for issue of a Warrant of Execution is straightforward and simply requires completion of Form N323 and payment of the fee. No Court attendance is necessary.

Following the issue of a Warrant of Execution, the Court will first send a letter to the debtor advising that if the debt is not paid at once, bailiffs will call to collect the money or seize goods for sale at auction. The Court should keep you informed of the success or otherwise of the bailiffs.

Court bailiffs may enter a debtor’s home or business premises and seize items they find for sale by public auction to pay the debt. Often, they will agree a scheme of payment by installments, secured by an agreement that the bailiff will not remove the ‘seized’ items so long as payments are made, and that the debtor agrees likewise not to dispose of them until the debt is satisfied.There are certain items which the Bailiff cannot seize, such as tools of the trade and essential personal items such as clothing bedding, and some furniture. The Bailiff can not enter a residential property by force.

It may well be that the debtor has no goods of sufficient value to justify the cost of removal and sale. Equally usual is for the bailiff to enter into an arrangement of ‘walking possession’, whereby payment by instalments will be agreed on condition that the bailiff will not then remove goods. This causes delay as it is only if the instalments agreed by the bailiff are not kept up that further action will be taken.

Bailiffs are not allowed to break into the debtor’s home, but they can force entry into business premises as long as these do not include residential accommodation.

It is open to the debtor to apply to the Court to suspend the Warrant of Execution, on condition that payment by instalments is made. The Court will advise you if this happens. If you refuse to agree the suspension, a hearing will be fixed before a district Judge who will decide whether to suspend the warrant, any conditions that will apply to a suspension, and how much the debtor can afford to pay.

Attachment of earnings orders

This is a very effective method of enforcement but can only be used where a judgement debtor is in regular employment. It is an Order of the Court that a judgement debt be paid by installments out of the debtor’s earnings from employment. The debtor’s employer is ordered to deduct money from the debtor’s wages and send the money to the Court.

Application is on Form N337, together with the court fee and a statement confirming the amount unpaid.A hearing date will be fixed, and notice sent to the defendant. So long as the judge is satisfied that the debt remains outstanding and that the defendant is in employment, an order will be made. However, part of the earnings will be ‘protected’ for essential living expenses, and the court will decide how much can be deducted under the order.

The Court will not make an attachment of Earnings Order against a person who cannot afford to pay, and it will not make an order that removes the incentive for a debtor to remain in employment. A protected earnings rate will be fixed and the Court will make an Order that results in the debtor being allowed to keep an amount which is deemed necessary for the living expenses of the debtor and his family.

Third Party Charging Orders (Garnishee Orders)

This is an Order requiring a third-party to pay a debt to the judgement creditor from money otherwise owed to the judgement debtor. It is made without notice to the debtor, as clearly otherwise he would move his money on.

The Court can order that a debtor’s money held in a bank or building society account be paid directly to you in payment of your judgement debt. Clearly the Order will be ineffective unless there is actually money in the debtor’s bank at the time the bank receives the order and it is necessary to have the judgement debtor’s bank details to apply for the Order.

The application is made on Form N349 to the Court which made the judgement Order.

The District Judge will make an Interim Third-party Debt Order and fix a date to consider whether it should be made final. The Interim Order will direct that until this hearing the third-party must not make any payment which reduces the amount he or she owes the judgement debtor to less than the amount specified in the order. Thus, you will not get any money until the hearing, but the money will be frozen in the debtors account. Copies of the Interim Third-party Debt Order, together with the application notice and any documents filed in support must be served on the third-party not less than 21 days before the hearing.

If either the judgement debtor or the third-party objects to the making of a final Order, he or she must file and serve written evidence, stating the grounds of his or her objection not less than three days before the hearing.

The Order will not apply to money which comes into the account after the Order is made. Also, a Third-party Debt Order cannot be made over a joint bank account.

The difficulty can be finding out in sufficient detail where the debtor keeps his money. Another problem is getting the Third-party Debt Order issued before the debtor hears of your plans and moves the money away. For a Third-party Debt Order therefore you need good information, perfect timing and to be able to take the debtor by surprise.

 

Charging orders

This process allows a person who is owed money under a judgement to secure his debt by registering the amount as a charge against property owned by the debtor. It is a sort of mortgage with you in the role of lender. Charging Orders can also be obtained over investment assets such as shares. Its advantage over a Third-party Debt Order is that bricks and mortar are more difficult to conceal. However, its disadvantage is that it does not realise money straight away, and you will have to wait or apply for the property to be sold.

The difficulties can also be that the property may have little equity and already be subject to a heavy mortgage. Any existing mortgage will take priority over the charge now granted. If there is little or no equity, the Court may be reluctant to make a Charging Order. They will also be unlikely to do so if the judgement debt is for a small amount.

 

Application is on Form N349, which is filed together with the court fee and a sworn affidavit setting out the amount owed, the property owned by the debtor,with other charges and interests which affect the property, and often a copy of a land registry search against the property.On receiving the application, the court will make a temporary interim charging order, and fix a hearing date. At the hearing, the debtor and any other persons with an interest in the property may make representations. Providing any other legitimate interest are not prejudiced, the court could be expected to make the charging order absolute.
Once the order is absolute, you may then apply for the property to be sold. Application is on Form with the fee. It is also necessary to file a supporting affidavit, confirming that the debt is still outstanding, and the probable value of the property.

A further hearing date will be fixed. The court will consider the amount that would be realized by a sale, and the effect upon other persons, especially children, living in the property. Where there are young children who would be adversely affected by a sale, or there is a realistic prospect of the debtor making payment, a sale is likely to be delayed for a set period.

Statutory Demands

Service of a Statutory Demand is the method by which a creditor (whether or not a judgement creditor) threatens a debtor with bankruptcy or winding up. The prescribed form is not a Court document and the Court is not involved in any way at this stage.

The Statutory Demand gives details of the debt and demands that the debtor should pay the debt, or secure or compound it to the creditor’s satisfaction. The debt must be for at least £750. The demand contains a warning that if payment is not made within 21 days of service, bankruptcy or winding up proceedings can follow.

If the debtor is an individual, he or she may apply to the Court for the Statutory Demand to be set aside. There is no such procedure in the case of companies, but a similar result can be obtained by applying to the Court for an injunction to restrain advertisement of a winding up petition. If the creditor knows that the debt is disputed on substantial grounds, then it is likely to be preferable to sue on the debt rather than serve a Statutory Demand, which the Court is likely to set aside.

Related Blog Posts

Bailiff powers – what are bailiffs allowed to do

The powers of bailiffs and what they are allowed to do by law depends upon the type of bailiff. There are however some general rules which apply to all bailiffs. You must receive notice of their intention to call at least 7 days beforehand. So do not leave doors and...

read more

The different types of bailiffs

Bailiffs can either be appointed by the court or be civilians employed by debt collection firms. These different types of bailiffs collect different types of debts and have different powers according to the type of debt being collected. County Court bailiffs are...

read more

Statutory Demands

Statutory demands can be very effective. Serving a statutory demand upon someone who owes you money together with the threat of bankruptcy will concentrate a debtors mind on resolving matters. Court proceedings are one only way of enforcing payment of money owed to...

read more

Related Books

[product_category per_page="6" orderby="popularity" columns="6" order="ASC"]