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Obtaining a County Court Judgment (CCJ) can seem like the end of the matter, but it is only half the journey. If a Debtor does not comply with the payment terms of the Judgment it is down to you to apply to the Court to enforce them.
CCJ's can be enforced for up to six years from the date of issue and accrue interest if the Judgment sum is over £5,000. Below we look at the five main methods of enforcement; each of these can be used simultaneously or sequentially:
Bailiffs act by taking control of goods and selling them in order to raise money to pay off the Judgment.Any Judgment up to £5,000 can be enforced by County Court Bailiffs. It only costs a one off Court Fee to instruct them, however due to their limited resources they are often a slow and inefficient method of enforcement.
If the debtor owns land in England & Wales you can apply to register a charge over it. This means that the debtor cannot dispose of the land without first paying off the Judgment. In addition after obtaining a Final Charging Order you have the option of applying for an Order for Sale in respect of the land.
Success depends upon the debtor being the sole owner and there being significant equity in the land. Where the land is jointly owned or a family home this approach is less effective.
Enforcement can be a slow process. It is only upon completing the sale of the land via an Order for Sale or the debtor voluntarily making payment that you will receive recompense.
Third Party Debt Order
If a Third Party such as a bank or building society holds money for the debtor you can apply to freeze that money and have it paid over to you. This is the least used method of enforcement and the least successful.
Success depends upon having evidence to support an application and significant money being held by the Third Party. Speculative applications are not permitted.
Attachment of Earnings Order
If the debtor is an individual who is employed you can apply to have their employer garnishee their wages and have them paid directly to you. This method is not applicable where the debtor is self-employed or in the armed forces.
Success depends upon the debtor being paid enough to enable to the Court to deduct money from their wages and be satisfied that they have enough money to live on.
This method of enforcement is cost effective, but can be slow depending upon the size of the Judgment and the wages of the debtor.
For Judgments over £5,000 owed by individuals you can apply to make them bankrupt. For Judgments over £750 owed by companies you can apply to wind them up.
In both cases a prior step is usually the service of a statutory demand giving them 21 days to pay the debt or apply to Court to challenge the statutory demand. If no application is made and the debt remains unpaid you are then eligible to apply to Court for a bankruptcy or winding-up order.
After an order is made, the judgment debtor's assets will be collected in by a trustee in bankruptcy or liquidator and distributed among all the creditors in accordance with insolvency law.
This process can be very expensive and time consuming, however the threat of insolvency can sometime lead to debtors making payments (though the use of insolvency as a debt collection exercise is not allowed).
Success depends upon the debtor having enough assets to cover the cost of the application and payment of all creditors.
How Pinney Talfourd can help
Pinney Talfourd has experienced solicitors who regularly deal with debt recovery matters and are recommended in the Legal 500 UK. The Dispute Resolution Department is headed by Stephen Eccles and the commercial litigation department by Nick Hatchett.
Contact either team here.
The above is meant to be only advice and is correct as of the time of posting. This article was written by Oliver-James Topping, Solicitor in the Commercial Litigation Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of June 2020.