Enforcement Flashcards
Describe the ultimate objective of litigation.
The ultimate objective throughout litigation is to succeed and obtain a judgment against the other party.
How should a judgment creditor proceed if the debtor’s assets are difficult to enforce against?
The judgment creditor can apply to the court for an order to obtain information from the judgment debtor, requiring them to attend court and disclose details about their assets.
What must be verified about the assets intended for enforcement against a debtor?
It is essential to ensure that the assets belong to the debtor and are not leased or jointly held with another person who may have an overriding interest.
Define ‘oral examination of a debtor’.
The ‘oral examination of a debtor’ is a legal procedure where a judgment creditor can require a judgment debtor to attend court to provide information regarding their financial situation and assets to facilitate the enforcement of a judgment.
Define the contents of the order related to questioning a judgment debtor.
The order must contain a ‘penal notice’ stating that if the named individual does not comply with the order, they may be held in contempt of court, imprisoned, fined, or have their assets seized (CPR 71.2(7)).
Describe the requirement for serving an order to attend court.
The order to attend court must be served personally on the person ordered to attend not less than 14 days before the hearing, unless the court orders otherwise (CPR 71.3(1)).
Explain the consequences of refusing to answer questions in court.
Refusing to answer questions during the court hearing may lead to the matter being referred to a judge, who can order the judgment debtor’s committal.
Describe the main methods of enforcement of money judgments.
The main methods include writs/warrants of control, third party debt orders, charging orders, and attachment of earnings orders.
How can a judgment creditor enforce a money judgment?
A judgment creditor can use any available method of enforcement, including multiple methods simultaneously or sequentially, until the judgment debt is fully paid.
What are third party debt orders used for?
Third party debt orders are used to freeze and seize money owed to the debtor by a third party, such as a bank or employer, to satisfy a money judgment.
What is an attachment of earnings order?
An attachment of earnings order is a court order that directs an employer to deduct money directly from a debtor’s wages to pay off a judgment debt.
Describe the process required to enforce a High Court judgment using an Attachment of Earnings Order.
A claimant must apply to transfer the proceedings to the County Court, as Attachment of Earnings Orders are only available in the County Court.
How does the enforcement of judgments differ based on the amount involved?
Sums of £5,000 or more must be enforced in the High Court, while sums less than £600 or arising from agreements regulated by the Consumer Credit Act 1974 must be enforced in the County Court.
Describe the initial source of information about the opponent in a debtor investigation.
The initial source of information is often the client, who may have detailed knowledge of their counterparty due to prior business interactions and shared industry experience.
How can a lawyer gather information about a debtor’s means?
A lawyer can gather information by conducting a company search, applying for official copies from the Land Registry, searching relevant registers, and instructing an enquiry agent to report.
What is the purpose of updating investigations at the end of a legal action?
The purpose is to determine the most effective method of enforcement after obtaining a judgment.
Define the role of an enquiry agent in debtor investigations.
An enquiry agent is instructed to report on the debtor’s means and circumstances, providing additional insights that may not be readily available through other sources.
What additional investigations might be conducted post-judgment?
Additional investigations may include assessing the debtor’s assets and financial situation to decide on the best enforcement methods.
List some methods a lawyer might use to investigate a debtor’s financial situation.
Methods include conducting company searches, checking land ownership through the Land Registry, searching relevant registers, and hiring enquiry agents.
Describe the role of enquiry agents.
Enquiry agents are private investigators who procure extensive information on individuals or companies upon request, often through various means.
List the types of information accessible through company searches.
Company searches provide access to annual accounts, general solvency, assets, and information on whether assets are charged.
Describe the purpose of the Land Charges Registry.
The Land Charges Registry records restrictions or prohibitions on the use of a property and any charges against it, helping to determine if there is equity in a debtor’s property and the feasibility of an order for sale.
How does the Individual Insolvency Register impact enforcement proceedings?
The Individual Insolvency Register lists individuals who have been made bankrupt or have Debt Relief Orders or Individual Voluntary Arrangements (IVAs), which restrict how the debtor’s assets can be distributed, affecting the effectiveness of enforcement methods.
Define the Attachment of Earnings Order Index.
The Attachment of Earnings Order Index shows the debtors against whom there are attachment of earnings orders in force, indicating potential methods for debt recovery.
What information can be derived from the Land Charges Registry regarding a debtor’s property?
Information from the Land Charges Registry can help determine if there is any equity in a debtor’s property and whether an order for sale is possible.
Discuss the role of the Attachment of Earnings Order Index in debt recovery.
The Attachment of Earnings Order Index plays a role in debt recovery by identifying debtors who have attachment of earnings orders, which can facilitate the collection of debts directly from their earnings.
How can a judgment debtor cancel an entry if the judgment is satisfied within one month?
The judgment debtor may request the cancellation of the entry if the judgment is satisfied within one month.
What is the next step after the court issues an order in the attachment of earnings procedure?
The order is served on both the debtor and the judgment debtor’s employer.
What must a third party or judgment debtor do if they object to the order?
They must file and serve written evidence stating the grounds for their objection.
How does a charging order affect the sale of property?
Once a charging order is made final, it remains in place until the property is sold, at which point the debt is paid from the sale proceeds.
What is the relationship between a charging order and prior mortgages?
A charging order is subject to any prior mortgages and charges, meaning it does not take precedence over them.
Explain the two-stage procedure for obtaining a charging order.
The two-stage procedure involves first obtaining an interim charging order, followed by a final charging order.
What must a judgment creditor do after obtaining a final charging order?
After obtaining a final charging order, the judgment creditor may apply for an order for sale to force the sale process and realize funds.
How long can the process of obtaining a charging order take?
The process of obtaining a charging order can be somewhat lengthy.
What happens to a charging order when the property is sold?
When the property is sold, the debt secured by the charging order is paid from the sale proceeds, and the charge is removed.
Define the minimum judgment debt amount for enforcement in the County Court.
The minimum judgment debt or amount outstanding must be not less than £50.
Describe the initial step a judgment creditor must take in the attachment of earnings procedure.
The judgment creditor must file an application in a standard form, certifying the amount of the outstanding judgment and paying a fee.
Explain the outcome of a successful third party debt order application.
The outcome is that the third party must pay the judgment creditor the money owed to the judgment debtor, satisfying the judgment debt.
Describe the implications of a debtor changing jobs after a court order is obtained.
If a debtor changes jobs after a court order is obtained, the County Court may find that the employer no longer has the debtor in their employment. This can lead to the discharge of the order, requiring the judgment creditor to start the enforcement process again.
How can debts owed by others be enforced?
Use a third party debt order.
What should be done if the nature of the debtor’s assets is unclear?
Use an order to obtain information from the judgment debtor about its assets, consider using a reputable enquiry agent, and do some research yourself or ask the client to assist.
Describe the conditions under which a petition for bankruptcy can be issued against an individual.
A petition for bankruptcy against an individual can be issued when the judgment debt against them is more than £5,000.
What is a useful method of enforcement in insolvency proceedings?
A very useful method of enforcement in insolvency proceedings is the proceedings for insolvency, which includes bankruptcy and winding up.
Describe the purpose of a statutory demand in insolvency proceedings.
A statutory demand serves as a precursor to insolvency proceedings, indicating to the debtor that they must pay their debt within 21 days or risk being presumed unable to pay their debts, which can lead to bankruptcy or winding-up petitions.
How does a statutory demand affect a debtor’s financial situation?
If a debtor does not pay the debt within 21 days of receiving a statutory demand, the court may presume the debtor is insolvent, making it more difficult for them to resist bankruptcy or winding-up petitions.
Define the consequences of being made bankrupt or wound up.
The consequences include losing control of assets, potential restrictions on holding certain roles (like being a company director), and a company being unable to continue trading.
Explain the importance of the fixed amount for costs in the writ or warrant of control.
The fixed amount for costs is important as it ensures that the judgment creditor can recover not only the outstanding debt but also the costs associated with the TCG process, including court fees.
How do third party debt orders assist in the enforcement of money judgments?
Third party debt orders allow creditors to claim money directly from a debtor’s bank account or other third-party sources to satisfy a debt.
Describe the role of an enforcement officer (EO) in the Taking Control of Goods (TCG) procedure.
An enforcement officer (EO) is responsible for seizing a judgment debtor’s goods and selling them to satisfy the judgment debt and associated expenses.
What are the essential conditions for goods to be seized under TCG?
The goods must be owned by the judgment debtor and free from third-party claims, such as those from co-owners or higher-ranking creditors.
Identify the most important exemptions from TCG.
The most important exemptions from TCG include tools of the judgment debtor’s trade, exempt up to an aggregate value of £1,350, and basic domestic items such as clothing, bedding, furniture, and essential household items.
What is the financial limit for using the County Court for TCG applications?
The financial limit for using the County Court for TCG applications is up to £600.
Identify the range of debt amounts for which either the High Court or County Court can be used for TCG.
For debts between £600 and £5000, either the High Court or County Court can be used for TCG.
Describe the role of the writ or warrant of control in the TCG process.
The writ or warrant of control is a court document that entitles the Enforcement Officer (EO) to seize and sell the judgment debtor’s goods to raise funds to satisfy the judgment debt.
What details are included in the writ or warrant of control?
The writ or warrant will contain the necessary details and amount of the outstanding debt to be recovered, as well as a fixed amount for the costs of TCG, which includes the court fee.
How can the Enforcement Officer (EO) benefit from the sale of seized goods?
The EO is able to take their own charges out of the proceeds of the goods sold and seized.
Explain the purpose of charging orders in the enforcement of money judgments.
Charging orders secure a debt against a debtor’s property, allowing the creditor to claim the amount owed when the property is sold.
How much advance notice must the EO give to the judgment debtor before taking control of goods?
The EO must give at least 7 clear days of advance notice to the judgment debtor.
What is the time frame in which the EO can take control of the judgment debtor’s goods after giving notice?
The EO has 12 months from the date of giving notice to take control of the judgment debtor’s goods.
Describe the conditions under which an Enforcement Officer (EO) may use reasonable force to enter premises.
The EO may use reasonable force to enter premises if necessary, but this does not include using force against persons. There are restrictions on the process, such as not taking control of goods before 6am or after 9pm, and not entering premises where a child or vulnerable person is the only one present.
How does a controlled goods agreement benefit the judgment debtor?
A controlled goods agreement benefits the judgment debtor by allowing them to retain custody and use of their goods while they arrange for payment of the debt.
What are the key components of a controlled goods agreement?
The key components of a controlled goods agreement include the terms for payment of the debt, which are agreed upon by the enforcement officer and the judgment debtor.
Explain the outcome if the judgment debtor pays the debt before the sale.
If the judgment debtor makes payment of the debt, the sale of goods by the Enforcement Officer does not take place.
Describe the procedure for obtaining a third party debt order.
The procedure is appropriate when there is a debt due or accruing due to a judgment debtor by a third party within the jurisdiction, such as money in a bank account or trade debts.
How does a third party debt order affect joint bank accounts?
A third party debt order cannot be obtained against a bank account in the joint names of the debtor and spouse.
