Enforcement of Money Judgments Flashcards
chapter 12
What is the first step a judgment creditor should take when considering enforcement of a money judgment?
The judgment creditor should investigate the judgment debtor’s means before commencing proceedings, to avoid wasting time and money. This may include instructing an enquiry agent or applying to the court for an order to obtain information.
What is an “order to obtain information” and how is it used?
An order to obtain information is a court order requiring a judgment debtor to attend court to be questioned about their finances. The judgment creditor files a notice of application with the court. The debtor is examined under oath by a court officer. If the debtor fails to attend court, they may face a committal order.
What are the four most common methods of enforcing a money judgment?
○Taking control of goods (seizure and sale of debtor’s goods)
○Charging order (a charge on the debtor’s land or securities)
○Third party debt order (an order requiring a third party who owes money to the debtor to pay it directly to the creditor)
○Attachment of earnings order (an order requiring the debtor’s employer to make deductions from their earnings and pay them to the creditor)
What is “taking control of goods” and what are some limitations of this method?
Taking control of goods involves seizing and selling a debtor’s possessions to recover the amount owed. Enforcement officers cannot force entry into a debtor’s home, but they can use reasonable force to enter business premises. Certain items are exempt from seizure including basic household goods and tools of the trade up to a value of £1,350
What is a “charging order” and what are the two types of assets it can be applied to?
A charging order is a way of securing a debt against a debtor’s assets, either on land or securities. It places the creditor in a similar position to a mortgagee. The creditor may have to wait until there is sufficient equity in the asset before receiving payment. To obtain the money, a further order for sale must be obtained.
What is a “third party debt order” and what is its main benefit?
A third party debt order requires a third party who owes money to the debtor to pay it directly to the creditor. The main benefit is the element of surprise, as the debtor may not be aware of the application until after the order has been made and the funds are frozen. However, the debt must be owed solely to the debtor, if it is held in joint names the application will fail.
What is an “attachment of earnings order” and who does it apply to?
An attachment of earnings order compels a debtor’s employer to make regular deductions from their earnings to pay the debt. This method is only applicable when the debtor is employed and not self-employed. If the debtor changes jobs, the creditor will have to repeat the process.
When enforcing a judgment in the County Court, what is the monetary threshold for taking control of goods using a warrant of control?
If the judgment is less than £600, a warrant of control can be issued in the County Court and enforced by an enforcement officer (bailiff). For a judgment of £600 or more, enforcement can take place in either the County or High Court.
What are some advantages of enforcing in the High Court when taking control of goods?
High Court Enforcement Officers (HCEOs) are often paid on their results. Interest continues to accrue on the debt in the High Court.
What is the procedure for obtaining a charging order on land?
There are three stages to the process: an interim charging order, a final charging order and an order for sale. The creditor must serve the debtor with the interim order. The debtor can object to the final charging order, which may result in a hearing. A separate process must be commenced to obtain an order for sale.
