12. Enforcement of Money Judgements

Question 1

Who is the judgement creditor?

Answer 1

The successful party

Question 2

Judgement Debtor

Answer 2

The unsuccessful party

Question 3

Ways to investigate a judgement debtor’s means

Answer 3

1. Instruct an enquiry agent and
2. apply to court for order to obtain information from the debtor

Question 4

Order to obtain information from the Debtor: what is this?

Answer 4

A court order requiring the debtor to attend before an officer of the court to be questioned on oath about their finances or those of a company of which they are an officer

Question 5

Order to obtain information from the Debtor: How is this initiated?

Answer 5

The judgment creditor files a notice of application at court setting out details of the name and address of the debtor, the judgment the creditor is seeking to enforce and the amount owed. Any specific documents that the creditor wants produced at the hearing should be listed

Question 6

How must an order to obtain information from a judgement debtor be served? Where will the hearing take place? Reimbursement for judgement debtor?

Answer 6

1. Personally
2. County Court hearing centre where debtor resides / is in business
3. Can request payment of reasonable travel expenses to and from court within 7 days

Question 7

Order to obtain information from a judgement debtor: who conducts the examination?

Answer 7

The examination is conducted by an officer of the court, or a judge if requested by the creditor.

Question 8

Order to obtain information on a judgement debtor: consequences if the debtor does not attend court?

Answer 8

If the debtor fails to attend court, the judge may make a committal order against them, which is usually suspended provided the debtor complies with the order.

Question 9

Methods of Enforcing Judgements for the creditor

Answer 9

1. Taking control of goods
2. Charging order
3. third party debt order
4. attachment of earnings order

Question 10

Enforcement Methods: Taking control of goods

1. Who does this
2. Limits on Powers
3. What may be taken
4. who is exempt

Answer 10

1. In the High Court, the task is carried out by a High Court Enforcement Officer (HCEO) and in the County Court, by enforcement officers (often referred to as bailiffs).
2. Enforcement officers cannot force entry into a debtor’s home, but they can use reasonable force to enter business premises if they believe the debtor’s goods are inside.
3. The usual contents of a home or business premises including motor cars, computers and banknotes, but also less common ones for instance boats and securities such as share certificates.
4. The so- called ‘necessary items exemption’ only applies to individuals and not to a judgment debtor that is a partnership, limited company and so on. If applicable, items such as clothes, bedding, furniture and household equipment, which are reasonably required for the basic needs of the debtor and their family, cannot be taken.

• Neither can work tools, computers, vehicles and other equipment necessary to debtor personally for work or study subject to max. aggregate value of 1350

Question 11

Enforcing a judgement: Which court will be used

Answer 11

1. Less than 600 in CountyCourt
2. 600 or more but less than 5 000either one (but starts in CC and is transferred to HC)
3. 5 000 or more is HC (exception: proceedings under Consumer Credit Act 1974)

Question 12

Document Required to seize goods to enforce a judgement (based on court)

Answer 12

1. County Court: warrant of Control
2. HC: Writ of Control

Question 13

Procedure for taking goods to enforce a judgement: High Court

Answer 13

1. The judgment creditor delivers a praecipe (request) and two copies of a writ of control to the court office, together with the judgment.
2. The court seals the writ and returns one copy to the creditor.
3. The creditor then forwards this to the HCEO for the county where the debtor resides or carries on business, for the writ to be executed.

Question 14

Procedure for taking goods to enforce a judgement: County Court

Answer 14

1. The creditor files the form of request for a warrant of control at the County Court hearing centre that serves the address where the goods are to be seized.
2. The warrant is executed by the enforcement officer for the district where the debtor resides or carries on business.

Question 15

Enforcing judgement by seizing goods: what if the debtor just needs more time to pay - can any agreement be reached

Answer 15

Yes, can enter into a controlled goods agreement that enforcer has taken control of the goods but will not dispose / remove them before the debt is paid
- if payment not received within deadline, goods seized will be sold at public auction (any surplus going to debtor)

Question 16

Charging Orders

Answer 16

A charging order can be made either on land or on securities such as stocks and shares (for the amount equivalent to the judgement). The charging order remains on the asset until the creditor wants to pursue the matter further / apply for an order for sale (may wait until land increased in value etc.)

Question 17

Charging orders on Land: can these be made on jointly owned land

Answer 17

a charging order CAN be made on debtor’s land or land the debtor owns jointly with someone else. If the land is co-owned, the order is a charge upon the debtor’s beneficial interest rather than the land itself

Question 18

Charging orders on land: registration requirements

Answer 18

Charging order should be registered at Land Registry or (for unregistered land) At LC department

Question 19

If a creditor has a charging order over the debtor’s land can they sell it?

Answer 19

They must apply to the court for an order of sale

Question 20

Charging Orders: Which Court

Answer 20

If the debt is more than 5 000 the creditor has a choice to apply for the charging order in County Court (must be submitted at CC money claims centre) or High Court

Question 21

Stages of obtaining a charging order

Answer 21

1. Creditor obtains interim charging order, by filing an application and draft interim charging order
2. Court officer makes ICO or refers matter to judge
3. Serves the ICO, application notice etc. on the debtor
4. Debtor can request that the decision of the ICO granting is referred to a judge
5. If debtor objects final charging order they must make application with grounds of objection
6. Court in hearing can make FCO, discharge ICO or direct a trial
7. If FCO is made, creditor now has a charge (and can commence proceedings for an order of sale)

Question 22

Charging Order: Once granted with an ICO, how long does the creditor have to serve the ICO, application notice and supporting documents on the debtor

Answer 22

21 Days

Question 23

Charging Order: Once the debtor receives the ICO and other documents, how long do they have to request that the court officer’s decision to grant an ICO should be reviewed by a judge

Answer 23

14 days

Question 24

Timeline for filing objection to the granting of an FCO / form?

Answer 24

1. If any person objects to the making of a final charging order (FCO), they must file and serve WRITTEN evidence stating the grounds of objection within 28 days of service of the ICO.

Question 25

Advantages of a charging order as a means to enforce judgement

Answer 25

• Good ways of securing payment against debtors who are not liquid and whether other forms of enforcement would not work
• Does secure the judgement in debt
• encourages debtor to make efforts towards settling as interest will continue to accrue (unless debt falls under Consumer Credit Act 1974)

Question 26

Disadvantages of a charging order as a means to enforce judgement

Answer 26

• Not always effective and not appropriate where there are significant / other charges over property (may not be enough equity to enforce against) or where debtor has no beneficial interest over it
• If granted, payment may not be received for many years if an application for order of sale is unsuccessful (ie. less likely to be successful if there are children etc)

Question 27

Charging order on securities

Answer 27

A creditor may also obtain a charging order on a debtor’s beneficial interest in certain specified securities including UK government stock, shares and unit trusts. The order will
normally provide for the charge to extend to any interest or dividend payable. The procedure is similar to that for obtaining a charging order on land.

Question 28

Enforcement Methods: Third Party Debt Orders

Answer 28

If the debtor is owed money by a third party (eg. bank or building accounts in credit and trade debts due to a business) the court could make an order under Part 72 requiring the third party to pay the creditor sufficient monies to satisfy the judgement debt and costs (third party debt order)

Question 29

Can third party debt orders be made over debt belonging to debt jointly owned by the debtor and someone else?

Answer 29

No

Question 30

Procedure for getting a third party debt order

Answer 30

1. Application issued in the court that made order being enforced
2. creditor applies without notice to debtor (providing financial details)
3. Judge makes interim order to freeze bank account - and lists a hearing
4. Order will be made final at the hearing unless there is a good reason not to (and third party must pay money to the creditor)

Question 31

Enforcement Methods: Third Party Debts: If a judge makes an interim order to freeze bank accounts / funds held by a 3rd party -how soon must a hearing be listed and what is the purpose of the hearing

Answer 31

1. Within 28 days
2. to hear objections and make the order final

Question 32

Advantages of a Third Party Debt Order

Answer 32

Element of surprise: debtor not aware of application until after the order has been made (and when they do, their bank account will already be frozen)

Question 33

Disadvantages of a Third Party Debt Order

Answer 33

• Informed debtor may move funds as soon as a judgement is made and so the order will not be effective if the account is not in credit on the day the order is served
• bank account cannot be held in joint names (must only be sole name of debtor)
• bank account MUST be in credit

Question 34

Enforcement Methods: attachment of earnings

Answer 34

an order that compels the debtor’s employer to make regular deductions from the debtor’s earnings and pay them into court. For this method of enforcement, the debtor must be employed.

Question 35

Attachment of earnings: which courts have the power to make these orders?

Answer 35

The high court has no power to make these orders, so applications must be made to the county court. If judgement is obtained in the HC the proceedings must be transferred to the CC before this method can be used

Question 36

Process of enforcing a judgement via an attachment of earnings

Answer 36

1. creditor applies to the civil national business centre
2. the court informs the debtor of the application and requires them either to pay the sum due or to file a statement of means giving details of income / outgoings
3. On receipt of the form, court officer makes an attachment of earnings order (and fixes repayment date by applying certain guidelines)
   i. If there is insufficient information to do this the matter will be referred to a judge
   ii. Order specifies normal deduction rate and protected earnings rate (latter is amount court considers reasonable for debtor to live on) so if earnings for particular week fall below this, creditor gets nothing
4. order is sent to the parties and the debtor’s employer with instructions to deduct amount ordered from debtor’s pay and forward it to the court (employer is entitled to deduct a small additional sum in respect of admin costs)
5. if either party objects to an order, they can apply for the matter to be reconsidered by the district judge at a hearing

Question 37

Advantages of an attachment of earnings order

Answer 37

Attachment of earnings orders are an effective means of obtaining payment of a judgment debt provided the debtor remains in work and is not self- employed.

Question 38

Disadvantages of an attachment of earnings order

Answer 38

However, if the debtor loses their job, the payments will cease and if they move employment, the creditor will have to repeat the process. In addition, the court may order a very low value instalment so the judgment will take a considerable time to satisfy.