“I WON A CCJ BUT STILL HAVEN’T GOT MY MONEY”

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How do you call in debts after a court finds in your favour? 

An ETN reader writes: “I am a micro business and have been trying to recover a debt of £4,000 from [a company which has twice appeared in ETN’s CCJ listing] since April.  

“I have had a CCJ awarded and now have issued the warrant but am still struggling to get the payment. I’m sure in these hard times I won’t be the only one.”

What options are available to obtain payment?

Unfortunately, once a money judgment [the most common type of CCJ] has been obtained, this does not automatically mean that a Creditor will receive payment from the Debtor, says James Martin of Black Solicitors.

To obtain payment, the Creditor must enforce the judgment using an approved method. Such methods are set out within the Civil Procedure Rules 1998 (CPR), which are the rules governing civil litigation within England and Wales.

A Creditor can use any method of enforcement available, and in certain circumstances different methods can be used simultaneously or one after the other. 

These are the most useful methods of enforcement:

Taking Control of Goods using Writs or Warrants of Control

A popular method of enforcement, this involves instructing an Enforcement Officer to seize goods from the Debtor. 

There are two kinds of Enforcement Officer, a High Court Enforcement Officer (HCEO) and a County Court Bailiff (Bailiff). Most people prefer to instruct a HCEO, however, this option is only available if the judgment is over £600.

To instruct an Enforcement Officer, a Creditor needs to make an application to the Court to obtain a Writ of Control (High Court) or Warrant of Control (County Court). 

Some HCEO businesses will make the application for the Writ of Control on a Creditor’s behalf once they have been provided with a copy of the judgment.

Once approved, this document enables an Enforcement Officer to take control of and sell the Debtor’s goods (provided they are not exempted goods) to discharge the judgment debt. Successful recovery will depend on whether the Debtor has goods of sufficient value to discharge the debt.

If the HCEO recovers any monies, then their fees will be paid for by the Debtor. If they are unable to recover funds, then an abortive fee will be payable. 

Third Party Debtor Orders

This method of enforcement allows a Creditor to recover sums which are owed to the Debtor by a third party, most commonly a bank. The Order essentially freezes and seizes assets on the Creditor’s behalf.

As a third-party debt is required, this method is not always relevant. It can, however, be useful in circumstances where a Creditor has knowledge of an account where the Debtor holds funds.

Charging Orders

This allows a Creditor to secure a debt by obtaining a charge over the Debtor’s interest in property. 

Essentially, this may prevent the Debtor from disposing of Property unless the debt is repaid, provided there is sufficient equity in the property after other secured creditors have been repaid.

The award of a Charging Order is discretionary, meaning that a Judge must decide if granting the order is proportionate, although in practice it is unusual for an Order to be declined.

Charging Orders are popular when Debtors own property. However, it may take a significant time before any funds are realised, as recovery will depend on when the property is sold.

Once a Charging Order has been obtained, a Creditor may apply for an Order for Sale which would force the Debtor to sell the property. Such applications can, however, be expensive and the outcome is far from certain.

Attachment of Earnings 

This provides for a proportion of the Debtor’s wages to be deducted by their employer and paid to the Creditor.

The use of this method is obviously dependent upon the Debtor being in employment and is also only available where the Debtor is an individual. 

As monies are automatically deducted from the Debtor’s wages, this means that that the Creditor will not have to rely on the Debtor making payments. 

There are, however, potential drawbacks as if your judgment debt is large, it can take a significant amount of time to be paid the full amount. The viability of this option will depend on the Debtor’s salary and the amount owed.

Conclusion

Regrettably, not all methods can guarantee success as each method will depend on the Debtor having sufficient assets available to discharge the debt. 

Accordingly, Creditors should carefully consider what methods of enforcement are best for them, as they will be unable to recover the enforcement fees if they are unsuccessful.

  • If you would like to speak to a member of Blacks Solicitors’ Dispute Resolution team about which methods of enforcement may be suitable for you, please email or call 0113 207 0000.

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