What happens if you go to Court and obtain Judgment but your opponent refuses to pay? What options are open to you for enforcing the Judgment you have obtained and getting your money back?
First, a warning. If the other party is unemployed or bankrupt - unfortunately increasingly common in the current economic climate - you are less likely to get your money back. It is therefore essential to carefully consider whether to proceed with enforcement action, as ploughing on regardless could be throwing good money after bad. Enforcing a Judgment can be difficult, time-consuming and costly. All too easily you may find yourself drawn into a game of ‘hunt the debtor’. The Litigation team at Hughes Paddison is experienced in the methods of enforcement and can advise you on your best chances of getting your money back, based on what is known about the debtor’s individual circumstances:
Here are some examples of enforcement options:
Warrant or Writ of Execution
This gives Court bailiffs the power to seize goods from the Judgment debtor’s home or business to sell at auction. There is a fee to pay, which is added to the Judgment debt.
The bailiff usually sends the Judgment debtor a letter saying that the debt must be paid within seven days. If it is not paid, the bailiff will make a personal call at the address provided. Caution is required if the address is a company's registered office, since it may be nothing more than a postbox with no discernible assets for the bailiff to seize.
Bailiffs can only seize goods belonging to or jointly owned by the Judgment debtor. They cannot take items which are necessary for the debtor’s job or business.
The Judgment debtor can ask for the warrant to be suspended if, for example, they make an offer of payment. If you do not agree to the request, a hearing date will be set by the Court.
Attachment of Earnings Order
Once obtained, the Attachment of Earnings Order is sent to the Judgment debtor’s employer. It orders the employer to deduct a specific amount from the debtor's earnings at source, and to send it to a central collection office. The money is then forwarded to you. Again there is a fee to pay, which will be added to the amount owed by the Judgment debtor.
An Order must be against an individual rather than a firm or limited company, and cannot be made if the Judgment debtor is unemployed or self-employed.
Third Party Debt Order
This type of order is most commonly (but not always) used to freeze money held in the Judgment debtor's bank or building society account. To prevent the Judgment Debtor from withdrawing their money from the account, he will not receive a copy of the Order until the account has been frozen.
It is at least a 2 stage process. If the Court is satisfied with the paperwork submitted it will make an interim order. It will then give the Judgment debtor and the bank/building society a chance to make representations. The Judgment debtor may want to apply for a ‘hardship payment’ out of the account, if as a result of an interim order he or his family is suffering hardship in meeting ordinary living expenses.
Once the issues have been heard by the Court, if your application is successful, the interim order is made final and the money owed is paid to you from the account.
A charging order puts a charge on an asset owned by the Judgment debtor’s asset (most commonly, but not necessarily, their house.) This prevents the asset being sold without your knowledge, and ensures that on sale you are paid from the proceeds of sale. However, you will not get your money unless and until the asset is sold. In some cases you are able to make an application to the Court for an order for sale.
If you are owed more than £750.00, you may petition to make the Judgment debtor bankrupt. This can be expensive and time consuming and will not give you priority over preferred creditors, so it needs to be considered carefully. It can be a risky option if there are many creditors and insufficient money to satisfy all debts.
Should you wish to obtain practical legal advice on obtaining or enforcing Judgment, and the typical costs of the various methods of enforcement, please contact Rachel Stewart or Alison Hume in our Litigation Department, for a no obligation discussion.
We can be contacted by telephone on 01242 574244, and by email at firstname.lastname@example.org or email@example.com.