If you have obtained your court judgment and it has not been paid as ordered by the court it will be down to you to enforce payment. There are a number of ways in which the Court can enforce judgment, but you have to take the initiative. Enforcement of judgment does not happen automatically, and the court will do nothing unless asked.
Unfortunately enforcing your judgment will mean payment of a further Court fee although if successful you will get back as it will be added to the judgment debt. Just as unfortunately you will have the further trouble and hassle of anther Court action.
The choices available
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 control to send in the bailiffs. If the judgment debtor 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 that the debtor attends court for questioning by a judge or court official.
Order that debtor attend court for questioning. (Oral examination)
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.
An oral examination will establish whether the debtor is employed and what their earnings are in order to consider an attachment of earnings order. It will show whether the debtor has any valuable assets which could be seized under a warrant of execution, whether the debtor owns any property under which a charging order could be obtained and whether the debtor has savings which could be claimed under a third-party charging order.
The information which the debtor gives to the court must be verified on oath and is your best chance of getting reliable information from the debtor. Providing untrue or incomplete information to the Court is perjury and can result in a prison sentence. Indeed, some debtor’s will prefer to pay up rather than have to attend court and reveal their financial situation
The oral examination is conducted in private and usually by an officer of the court. The debtor must answer the questions put to him. It is open to you as the creditor to attend Court and put questions either directly yourself or through the court officer. If you choose not to attend, the court will usually limit their questioning to those on the standard form EX140.
If, as often is the case you want to know more than is on the form, it is best for you to attend to have your individual questions put and to generally give the debtor a hard time. It is also useful to be able to see the debtor’s body language and how he reacts to the questioning. If you cannot attend, write to the court with any supplemental questions you want put or list these with the application.
Often the debtor will not show up for the hearing. The debtor is given the benefit of any doubt the first time round and the court will set another time and date. If the debtor again fails to attend without giving good reason he is likely to be held in contempt of court for which he could be sent to prison. This time the court bailiff will serve a notice of the oral examination in order that service can be proved. If after this there is still no attendance by the debtor, the judge may well issue a warrant for the debtor’s arrest.
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.
Oral examinations can be conducted against the directors of a limited company. The director’s names and addresses can be obtained from Company’s House in Cardiff. There is a small fee to pay. The procedure is the same as for an individual but must be transferred and heard at the director’s local court.
Application for an order for oral examination is made on form N316 without notice and issued in the court making the judgement. N316A is used when the examination is for the director of a company.
Warrants of control
A warrant of control (execution) is an order from the court that the court bailiffs should enter the debtor’s home or business premises in order to either collect the money owed under the judgement, or take away the debtor’s belongings for sale at auction to satisfy the debt.
It is usually the method of enforcement considered first, and is the method most commonly used. Unfortunately however, statistics show that it is not particularly effective. The procedure for issue of a warrant of control is straightforward and simply requires completion of Form N323 and payment of the fee. No court attendance is necessary.
The form is straightforward and should be issued under the claim number and in the action in which judgment was obtained. The Court fee payable is £110 or slightly less if issued online through the MCOL portal.
A warrant will be issued and passed to the County Court bailiff who will attempt to collect the debt. Delay is usual.
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.
There are certain items which bailiffs cannot take away. These include basic household and personal belongings, items which the debtor needs in order to work, items which do not belong to the debtor and items which are not worth the cost of removing and selling.
Clearly if the debtor has no money and no valuable belongings, a warrant of execution is a total waste of time.
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.
Often you will simply receive a letter saying that the bailiffs cannot find the debtor, or that the debtor has no belongings worth seizing. If this happens you should keep the pressure up. Ask the bailiffs to try again by completing form N445. You can also use this form to give further information to the bailiffs which might assist. A photograph of the debtor is particularly useful. There will however be a further fee to pay.
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.
More effective than county court bailiffs is for enforcement to be transferred to the High Court. A writ of ‘fee fa’ will then be issued out of the High Court and the debt will be collected by the Undersheriff of the relevant county. They are generally accepted as more forceful in collecting debts than county court bailiffs.
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 addressed to the debtor’s employer that the judgement debt be paid by instalments out of the judgement debtors earnings from employment. The debtor’s employer is ordered to deduct money from the debtor’s wages and send the money to the court.
Attachments of Earnings orders are available for judgement debts of more than £50. The amount is payable immediately once the debtor has failed to pay and can also be used if payment by instalments has been ordered.
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.
A court fee of £110 is payable unless there is an existing attachment of earnings order against this debtor. If so, you can ask for your debt to be consolidated with the existing order. A fee of 10p for every £1, or
Part £1, of money paid into court, is deducted by the court for their expenses from the money before it is paid out under the order.
The application for an attachment of earnings order must be made to the debtor’s home court to which the case may have to be transferred.
The court will write to the debtor telling him to either pay the amount due, or if he cannot, complete Form N56. If the debtor does not reply, this could ultimately lead to his arrest, being brought before the court, and being required to fill in the form at court.
From the information given on the form N56 above, the court will calculate the protected earnings rate. A prescribed formula is used to decide the amount that can be deducted from the judgement debtor’s earnings. In some cases the debtor’s income will be insufficient to enable an order to be made as allowances always given for necessary expenditure. The debtor must be allowed enough to live on, and so the court will fix a protected earnings rate. Take-home pay will not be reduced below the protected rate. The court will then fix a normal contribution rate based on the surplus income.
The court fixes a protected earnings rate of £200 a week and a normal deduction rate of £25 a week. If the debtor earns £250 in one week, then the full deduction of £25 must be paid and the debtor will take home £225. However if in this week he only earns £210, the amount to be paid to the court will be £10 and the amount of £200 is safeguarded.
Where the judgement debtor cooperates by giving the court all requested information promptly, a suspended order will be made. This means that so long as the judgement debtor pays the appropriate sum voluntarily each week as required the order will not be forwarded to the employer. This will save the judgement debtor not only the employer’s administration fee, but also likely embarrassment with his employer. However if the debtor defaults, then the suspension is lifted and the order is sent to the employer.
If you think that the protected earnings rate fixed by the court is wrong you can ask them to reconsider. Application is by way of form N 244 (the ordinary notice of application) and payment of a further fee. The court will then fix a hearing before a district judge who will make the appropriate decision.
If the debtor becomes unemployed, the attachment of earnings orders lapses but can be reinstated if the debtor gets another job. Application for this is again on form N56.
If the debtor changes jobs it is for you to find out the name and address of the new employer and then by way of Form N446 ask the court to advise the new employer.
To apply for an Attachment of Earnings Order, you simply need to complete form N337 and pay the prescribed fee.
The court will then do everything else. They will obtain details of the judgement debtor’s earnings from the judgement debtor, and if necessary, from the employer.
Third party Charging or 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 debtor’s 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.
It 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.
This is a court order by which a judgement debt is secured 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.
If the property is jointly owned, a charging order can still be obtained but it will only apply to the debtor’s share of the property. When there is a joint owner it can be more difficult to obtain an order for sale.
It is however possible, having obtained a charging order, to obtain an order for sale and the knowledge that he could lose his home can be sufficient encouragement for the debtor to miraculously find the money to pay the judgement.
The first thing to do is to apply to the Land Registry for the title number of the debtor’s property. This can be done online.
Once you have the title number you can apply for a copy of the register for the property. This will confirm who the registered owner(s) are and give details of mortgages and other charges over the property.
The charging order procedure is in two stages. On filing the application, the court will issue a temporary charge known as a charging order nisi or interim charging order over the property and fix a hearing date. The interim charging order will remain in effect until the hearing and prevent the debtor from selling or otherwise disposing of the property.
A charging order cannot be made where a County Court has made an order for payment of the judgement debt by instalments and there is no default in these payments.
Once you have the interim charge it should be registered by you with the Land Registry.
Copies of the interim charging order, together with the application notice and any documents filed in support must be served not less than 21 days before the hearing on the judgement debtor. You must also serve a copy of the interim charging order and your supporting affidavit on any other person with a mortgage or charge over the property and any co-owner of the property. Service by first-class post is sufficient.
The court may direct that other creditors which have been disclosed in the application notice also be served. If the judgement debtor objects to the making of a final charging order, he must file written evidence stating the ground of objection not less than seven days before the hearing. If the interim charging order is confirmed, fixed costs will be awarded plus disbursements.
When a final charging order absolute is made you must then arrange for the charge to be registered by way of notice or caution with the Land Registry.
It is then for you to apply for sale the property. This will be done with a part 8 claim form (N208) enclosing a copy of the charging order and written evidence. Where property is owned by more than one person, a sale may not be ordered. Usually 6 months must elapse before an order for sale will be made.
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.
High Court Enforcement.
A County Court Judgment can be transferred to the High Court for enforcement. It can then be enforced by a High Court Enforcement Officer (or Sherriff) who have greater powers of enforcement than County Court bailiffs.
N316 Application for order that debtor attend court for questioning
EX140 Record of evidence (Individual debtor)
Warrant of Execution
N 323 Request for warrant of execution
N445 Request for re-issue of warrant
Attachment of Earnings
N337 Request for an attachment of earnings order
N56 Form for replying to an attachment of earnings application (statement of means)
Third party Charging Order
N349 Application for third party debt order
N379 Application for a charging order on land or property.
N208 Claim Form Part 8 (Order of Sale)