Many believe that once they have obtained Judgment, that is an end to the matter. However, this is not always the case. The losing party may refuse to settle the Judgment or, may not be in a position to. This then leads to Enforcement proceedings.
This article sets out the most common types of Enforcement process.
Warrant of Control
This is where the Court bailiffs are sent in to see if they can recover goods or chattels to the value of the debt. This usually begins with a visit by the bailiff to see if there is a repayment process to be agreed. If installments or similar are not on the table, then the bailiff will seize goods with a view to selling them and realising their value. The bailiffs take a percentage of the sale for their fees. Currently, the Court fees for this are £77 or £110 and the likely solicitors costs are £250 plus VAT. They may be more or less depending on how complex the matter becomes. Success will really depend on what the Judgment Debtor has to be seized.
Warrant of Possession
This operates in relation to squatter’s proceedings or tenant evictions but can apply to other property. It involves the bailiff making an appointment to attend the property which is the subject of the possession order and evicting the tenant and changing the locks. The Court fee is £121 and the likely solicitor’s fees will be £250 plus VAT, subject to how much work is involved.
This is where the Debtor is called in to appear before an officer of the Court and answer questions. The questions are financial in nature and ask for details of property owned by the Debtor, any bank accounts held, any debts due to them etc. It is a good way of finding out more about the Debtor and the idea is that it steers you in the direction of what assets you can seek to enforce over. The problems are that sometimes, the Debtor does not tell the truth or fill the form in properly. Sometimes, they do not give sufficient detail to assist either e.g. a customer owes me some money. You can put questions of your own to the Debtor as part of this process. It is a good starting point in some cases. The cost of an Oral examination is £55 Court fee and an estimated £250 plus VAT in solicitor’s costs.
Third Party Debt Order
If a Debtor is owed money by a third party or has a bank account (technically as the bank owes this money to the Debtor, it is considered a form of debt), the Court can make an order that the Debtor pay the money to the Judgment Creditor, rather than the Judgment Debtor. Evidence of the debt and bank numbers are preferable to succeed. The Court Fee is £110 and the likely solicitor’s costs are likely to be £500 plus VAT.
If the Judgment Debtor owns property and there is sufficient equity left after any borrowing to pay all or part of the Judgment debt, then the Judgment Creditor can apply to have a charge over the property for the Judgment debt. Later, after the Charging Order has been made, if the debt is large enough, then the Judgment Creditor can apply for an Order for sale. This is where the Court Orders the property to be marketed and sold. The smallest figure that we have ever succeeded on obtaining an Order for sale for is approximately £3,700. Usually, such debts must be much larger. The Court fee is £110 and the likely solicitor’s costs and disbursements in the region of £750 plus VAT.
Attachment of Earnings Order
Where the Judgment Debtor has a job and their employer’s details are known, it is possible to apply to Court, for the Court to assess that a percentage of salary is paid directly to the Judgment Creditor at the same time as the Judgment Debtor is paid. The Court fee for this is £110 and the likely solicitor’s costs are £500 plus VAT.
Provided the debt is £5000 or over against an individual or £750 or over against a company then bankruptcy (Individual) or wind-up (Company) can be undertaken. These types of proceeding are more expensive and even if you are successful you rank equally with other creditors and do not take priority. This can therefore mean that you incur the cost but other share the benefits with you. It can also be costs prohibitive.
In many case, the costs incurred can be added to the sum to be recovered under the enforcement proceedings.
The starting point for any litigation is whether the Debtor is likely to have the funds to meet any Judgment debt and court costs. If they do not, unless there is a non-monetary reason for proceeding, the party must ask themselves whether it is worth proceeding. The above procedures give some assistance, but they are often far from perfect.
If you have any questions about pursuing a debt or enforcing a Judgment, please do not hesitate to contact Graham Mead.
*All costs and Court fees are accurate at the time of publishing but are subject to change and should only be used as an estimate/guide.