Obtaining judgment is just the first step towards recovering the amount owed. It is up to the creditor to collect the amount ordered by the court to be paid. Most judgments made without a hearing (default/summary judgments) are forthwith, this means the full amount is payable immediately. However, in the majority of cases, the judgment debtor wouldn’t be able to pay the debt in full and will have to apply for a redetermination or a variation of the court order.
If the debtor doesn’t pay the amount ordered by the court or apply to the court for an installment order, the creditor can take further action to enforce the judgment and attempt to recover the money owed. A judgment in itself does not allow for enforcement action to be taken without a further application to the court to enforce it.
It is up to you, as a debtor, to ensure that you keep to the terms of the court order, as long as you do, the creditor cannot apply to enforce the judgment (with the exception of securing the debt with a charging order, provided the judgment was made after October 1st 2012 and the amount is at least £1,000).
Creditors can use Form N316 to require you to attend court for an oral examination by a court official or, in some cases, a district judge. An information order is an order to attend court to be questioned about your financial situation and anything else that may be relevant to the judgment.
The creditor must serve the form at least 14 days before the hearing and you have 7 days to ask the creditor to pay your travel expenses to the hearing. The form will contain a list of documents you will be required to take with you to the hearing such as payslips, bills, statements, etc.
At the hearing, you will be required to answer a number of standard questions included on Form EX140 as well as any additional questions the creditor may deem relevant. You will be on oath.
Practice Direction 70 sets out the various methods of enforcement:
The enforcement method depends on your circumstances, for example, an attachment of earnings can only be made if you are employed, a charging order only applies if you are a homeowner or own other property. A creditor can use more than one method of enforcement at the same time.
Enforcement action can be instructed for up to 6 years from the date a judgment became enforceable. A creditor can continue trying to enforce for longer than 6 years from date of judgment but they cannot start the first enforcement action past this date.
Court permission is required to enforce a judgment over 6 years old. Warrants of Control must be renewed after 12 months if they have not been enforced.
Once they have obtained a county court judgment against you (a CCJ), the creditor can apply to the court for a warrant of control, authorising them to send bailiffs to your home to seize goods to be sold to repay the debt. However, they can only do this if you have not applied for and agreed a variation on a forthwith judgment or you have missed a payment, as long as the outstanding amount remains unpaid at the time the warrant is issued.
A warrant can be for the whole amount of the judgment (if no installment order is in place) or for the arrears which should be at least £50. See bailiffs for more information.
If you have let the bailiffs into your home, there are certain goods that are protected, meaning they cannot be taken:
You can apply to the court to have the warrant suspended, using form N245. You will need to list your income and outgoings on the form, including details of all your debt repayments. Couples should list their total household income and expenditure. See statement of means for more information.
Send or take the form to the court that issued the warrant of control. The court will send a copy of the form to the creditor. The outcome will be one of the following:ReferenceSee bailiffs for more information.
If a creditor has obtained a county court judgment against you (a CCJ) and they think you have the money to repay them and are holding it back, they can apply to the court for a third party debt order, allowing them to take the money you owe them from your bank account.
The court can ask about things like:
- your income and outgoings
- your job
- your home
- any other property you own.
Your creditor will start by applying for an interim third party debt order, which tells your bank to freeze your account. At this point, your account will be frozen but no money will be paid to your creditor until the judge has decided what to do at the final hearing.ReferenceSee third party debt orders for more information.
- Once they have obtained judgment, a creditor can apply for a charging order, provided the debt is at least £1,000. A charging order secures the debt against your property.
- If your creditor applied for a CCJ on or after 1 October 2012, they can apply for a charging order even if you stick to the terms of the judgment.
- If your creditor applied for a CCJ before 1 October 2012, they can only apply for a charging order if you have missed one or more payments.
- The creditor can apply for an interim charging order to stop you from selling the property before the final order is made. An interim charging order is usually made automatically and does not mean that a charging order has been made against you.
- A hearing will be required for a final charging order. At the hearing the court will decide whether or not to make the interim charging order final. You must attend this hearing.
- A charging order, means that when you sell your property, you have to repay your debt from the proceeds of the sale. It does not mean you have to sell it.
- If a creditor wants to force you to sell your property, they will have to apply to the court for an order for sale. In practice, orders for sale are hardly ever granted for consumer debts under £25,000.
- You can put forward arguments against a final charging order and you can also ask for conditions to be attached to a final charging order which make it harder for the creditor to force a sale. In reality, it can be very hard to stop a charging order being granted.
Creditors can obtain a court order to get money deducted from your wages and paid directly to them as long as you are working for an employer. Your employer will send the payments to the court and the court will send the money to your creditor.
To work out the deductions, the court works out the minimum amount of money you need to live on. This is called the protected earnings rate. Deductions can only be taken out earnings above this amount.
Your creditor won’t be able to get an attachment of earnings order if:
Your creditor can’t apply for an attachment order if you’re:
If a creditor applies for an attachment of earnings, the court will send you form N56 . You must give details of your circumstances: your partner’s financial details, other creditors you have and your employer’s details. The form has to be returned to the court within eight days.ReferenceSee attachment of earnings for more information.
A creditor can serve you with a statutory demand, which is a final demand for payment in full. You have 18 days to apply to the court to have the demand set aside, otherwise the creditor can present a bankruptcy petition. At the time of writing, a bankruptcy petition can be presented for debts over £5,000.ReferenceSee statutory demands for more information.