Enforcement of Money Judgments in The County Court
Once the Court grants Judgment in the Claimant's favour the Defendant has 14 days in which to settle the Judgment. If the Judgment is not satisfied within this time it will be entered into the register of County Court Judgments and may adversely affect the Defendants credit rating.
The Court will not automatically take steps to enforce the Judgment debt and it is for the creditor to take steps to initiate enforcement. Options include:
INFORMATION HEARING. The creditor may apply to the Court for an Order that the Defendant attend Court to be questioned as to his circumstances. This is really an information gathering process to try and elicit more information about the best means of enforcement. Application to the Court is on form N316. A Court fee is payable and the Application must be served personally on the Defendant who is entitled to insist upon payment of their travel costs to Court.
WARRANT OF EXECUTION. This is an application for the Court bailiff to seize and sell the Defendants' personal belongings to satisfy the Judgment. It is applied for on form N42 and a Court fee is payable. Certain goods are exempt from seizure such as tools of the Defendant's trade, bedding etc. Unfortunately this method of enforcement is often unsuccessful.
ATTACHMENT OF EARNINGS. This application seeks an Order that the Court should direct that a proportion of the Defendants earnings should be deducted at source and paid via the Court to the creditor. The application is made on form N55. The Defendant must complete a statement setting out his financial circumstances and there will be a Court hearing to determine what sum the Defendant can afford to pay and what level of his earnings should be 'protected'. The final Order is served upon the Defendant's employer who must comply with it. Once granted a creditor may not then use an alternative method of enforcement whilst the Order is in force.
CHARGING ORDER. A Charging Order secures the Judgment debt against land owned by the debtor and identified within the Charging Order. Application is made to the Court on form N379 and usually the Court will make an interim Charging Order (which must be registered at HM Land Registry) and set the matter down for a final hearing. The Court has a discretion as to whether or not to grant a final Order - and will take into account the interests of other known creditors. Once a final Charging Order is made the creditors can either simply 'sit on' their security or apply to the Court for an Order for Sale - the Court will only order the sale of a debtors physical home in exceptional cases. Once a creditor has the protection of a Charging Order he may not utilise other means of enforcement.
BANKRUPTCY. In cases where a debt exceeds £5,000 and the debtor has failed to respond to a statutory demand or settle a Judgment a creditor is entitled to issue a bankruptcy petition. The remedy is draconian [and expensive] though effective against carefully chosen debtors. It is sensible before issuing bankruptcy proceedings to serve a statutory demand. This must be personally served and gives the debtor 21 days to pay. The service of this notice can sometimes elicit payment. The debtor is entitled to apply to the Court to set the statutory demand aside - on the ground that the debt is disputed and where this happens the Court will adjudicate this point. In addition to the Court the creditor must also pay at the outset a deposit for the Official Receiver's fee of £700. The petition is served personally on the debtor. In the case of a winding up petition against a company this must also be advertised. At the hearing of the petition the debtor may seek an adjournment perhaps seeking more time to pay. If the debtor pays the creditor then withdraws his petition he is entitled to recover the legal costs of issuing the petition from the debtor. If the debtor does not pay he will in likelihood be adjudicated bankrupt and required to attend before the Official Receiver who will take control of his assets realising these for the benefit of all creditors - the petitioning creditor does not gain priority over other creditors.
THIRD PARTY DEBT ORDER. This is an application for an Order [made on Form N349] that money owed by a third party to the debtor should be paid direct to the judgment creditor. It is quite rare to know enough about the debtor's circumstances for this to be effective - but occasionally it can be very useful if for example you know that the judgment debtor has a significant credit balance in a bank account. Once an application is made to the Court the judge will usually make an Interim Order - once served upon the third party [the bank is one example] it will effectively freeze the money until a final hearing. It is within the discretion of the judge at final hearing whether or not to make the order final.