Enforcement of a Money Judgement
Introduction
Pursuing and enforcing a money judgment when you are owed a debt can be a time-consuming process, but it is vital if your debtor is not sticking to the agreed payment terms. Money judgments can give you more power to collect your money and will help you ensure satisfactory repayment in ways that other methods can't.
We took a detailed look at money judgments so that you can get to grips with the best way to enforce it. Read on to find out more.
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What is a Money Judgement
A money judgment is a legal judgment issued by a court when a debtor has failed to make agreed repayments and refuses to arrange to pay. The money judgment is issued when the court has decided that the creditor is owed the money and the debtor is unlikely to pay without one.
The final judgment will display the amount that is owed, the payment methods that can be used, when payment is expected and how a debtor can make the payment. Records of money judgments are held for six years, but if the debtor pays the balance within one month of the judgment being made, then it can be removed from their file.
Many debtors are unable to pay the money judgment in full, and so repayment plans can be set up if the debtor is forthcoming. However, a creditor has the legal right to enforce a judgment that is not paid. There are a range of enforcement options open to creditors, but choosing which one to pursues can be a lengthy process. However, there is little point in going through the stresses of achieving a money order unless you are willing to enforce it if it remains unpaid.
Why You Need to Enforce an Awarded Money Judgement
Once you have been awarded a money judgment, it is important that you move to enforce it as quickly as possible for two key reasons:
· To avoid the debtor dissolving their assets – if you are worried or have evidence that your debtor is going to try and dissolve their assets to satisfy the judgment, then you will need to move quickly to avoid this. The good news is that you can apply for a freezing injunction that will stop them from doing this so that you can proceed with the enforcement as expected.
· So the judgment does not expire – in the UK, you have six years from the date of judgment to enforce your judgment. Failing to do it in this time period will mean that the debt is no longer recoverable, and you will have lost the right to enforce it. Rather than waiting for years to pass, it is advisable that you move to enforce the judgment as quickly as possible to get the best outcome.
How Enforcing a Money Judgement Works
When you have successfully obtained a money judgment, you will need to enforce it in order to get the outcome desired. However, there are a number of different ways to enforce a judgment, and many of them can be used at the same time to get the best results. Take a look at the main types of enforcement below so that you can choose the path that best suits your needs:
Charging Order
A charging order is a method in which you can secure the debt by putting a charge on the debtor's interest in security assets, land assets and other assets available. This basically means that your debtor will be unable to sell off any of their assets without settling the debt they owe you. The only condition for this is that there enough equity left over for the asset creditor first.
Getting a charging order from a court requires you to prove whether it is a proportionate method, meaning that if you have a small judgment, then the court will consider whether enforcement by an alternative method is more appropriate.
If you do decide to request a charging order, then it is worth considering if the debtor has enough equity in the property to clear their debt to you and whether the property is owned solely by the debtor. If it is co-owned, then the court will be more reluctant to agree on a charging order, especially if the judgment debt is nothing to do with the other owner or owners.
Be prepared to wait for the charging order to be completed, as getting the funds owed requires you to apply for an order of sale to get the property on the market and then the time it takes to agree to a sale and complete it.
Third-Party Debt Order
A less popular option of debt collecting is via a third party debt order. This order is enforced when the sums owed to a debtor that are in the hands of a third party are frozen, seized and given to the creditor. Typical third party’s include banks and other financial institutions.
The reason third party debt orders are rarely used is because it requires the creditor to have knowledge of the debtor having the funds in a bank account that can be frozen. It is impossible to freeze assets that a third party does not have possession of, meaning that it can be a hard process to follow and achieve.
Bailiffs
If you have your money order and want to hire a private bailiff to attempt to recover the debt, then you will need to request a Writ of Control and Possession. These are issued when a debt is more than £600 and has been progressed through the Country Court to judgment.
Most bailiffs are privately employed, but local authorities and High Court Enforcement Officers (HCEO) also appoint them to execute judgments. Bailiffs are unable to act without the permission of an HCEO, and so private bailiff firms need to have authorised officers on the HCEO lists to be able to work.
The fees to appoint a bailiff vary depending on the work they will need to carry out, and it is important to note that even if a bailiff does attend the debtor's address, they may not be able to seize anything if it is held in someone else's name. Choosing to use a bailiff service will give you and the debtor a middleman to work with to ensure the best outcome for all parties.
High Court Enforcement Officers (HCEO)
When a debtor has goods to the value of the debt they owe you, then you can request a Writ or Warrant of Control from the court that gives a High Court Enforcement Officer the legal right to take control of the debtor's assets and remove them ready for sale in order to cover the sums owed to you.
This process is one of the most popular ways of getting debts paid and is easy to apply for and quick to have enacted, allowing the creditor to clear their debt and you to get the sums owed.
However, to be able to successfully use a Writ or Warrant of Control, the debtor must-have items that are sufficient in value to cover the debt and the fees incurred. Plus, if the debtor jointly owns items or does not own items, then a Writ or Warrant of Control will be fruitless.
Attachment of Earnings
Another popular and effective enforcement method is an Attachment of Earnings. This process involves applying to the court to request the attachment, which is then issued to the debtor's employer or benefits service and is fulfilled by taking partial payment directly from their earnings until the debt is fully satisfied.
Getting an Attachment of Earnings is pretty straightforward and won't cost you as much as other enforcement options, making it a popular choice among creditors. The great thing about this enforcement process is that the payments are automatically taken and paid to you, so you can be certain of payment for as long as the debtor is in employment.
It is important to note that if your debtor has more than one creditor and does not owe more than £5000, then the court has to consider issuing a County Court administration order. This type of order requires the debtor to make one payment per week or month that is then dispersed to all the located creditors. If the court does choose to make a County Court administration order, then it is likely that they will refuse an individual Attachment of Earnings request.
Insolvency Proceedings
If your debtor owes you more than £5000, you can make an application to make them bankrupt. If your debtor owns their own company, then you can also apply for this to be closed down as part of the insolvency process.
If the court agrees to your insolvency application, then the assets owned by the debtor will be put into the hands of a trustee in bankruptcy or an official liquidator who will assess the assets and consider how to dispose of them in order to clear the debtor's accounts.
This process is lengthy and will incur a significant expense as the creditor is liable for the insolvency application fees, making it essential that you consider all your options before proceeding. It is worth considering whether this action will lead to any financial benefit if the debtor has many creditors to pay as you may not be a priority for payment and could receive a significantly reduced sum after everything has been assessed.
It is common for debtors to start making payments when they receive notification that you may be starting insolvency proceedings but doing this as a debt collection process is frowned upon by the courts and actively discouraged.
Order for Questioning
If you are not sure how to proceed or you don't know whether the debtor has assets that can be used to pay back their debt, then you may want to consider applying for an Order for Questioning. This process is intended to help creditors to get a clear idea of what means the debtor has available and is undertaken in the presence of a Court Officer.
During the Order for Questioning, the debtor has to provide full and accurate information about any assets they own, whether they own any interest in a property, what their employment status and salary amount are, whether they hold any bank accounts and the balance of all accounts held and what other debts they have, including how they are working to pay them off.
The information is collected on an EX140 form and then shared with the creditor once it has been completed, allowing you to decide on the best course of action. To request this course of action, you will need to complete an N316 form. You will be given the opportunity to add any questions that you would like asked onto the application form for the court to consider. If your questions are agreed, then the debtor will be compelled to answer them as well as the standard form questions.
Many creditors do not request an Order for Questioning because they are unconvinced that the debtor will tell the truth and share honest information. However, there can be serious consequences for any debtor that fails to comply and share accurate and honest information. If the creditor fails to attend their appointment or refuses to answer all the questions, then they can be held in contempt, resulting in them being committed to prison. In reality, this course of action is very rare without additional attempts being made to engage with the debtor, but it is a real possibility if all the efforts put in continue to be ignored.
The Costs Associated with Enforcement
When you decide to enforce a debt, you must be prepared to pay the costs associated with using the court system as well as paying the fees for bailiffs and HCEOs to enforce any actions. However, you may be able to recover part of these fees from the debtor, making it more cost-effective than you may have first considered.
If, as a creditor, you are successful in agreeing on enforcement proceedings, then you can have the fees paid to enforce added to the debt as well as an amount agreed by the court to cover your legal fees.
Despite being able to add these fees to the debt, it is important to remember that they will only be paid to you if you are successful at enforcing your debt – a process that can take a considerable amount of time to achieve.
DebtTrace Can Help with Enforcement
Choosing which enforcement route to take can be confusing depending on what you consider to be important and the goals you have in relation to the debt. For example, if you want to get the money paid quickly but at a reduced total compared with taking longer to receive the funds but getting a larger proportion paid.
Whatever course of action you choose to take, you are likely to need professional support that provides results, and that is where DebtTrace is an obvious solution. We are a specialist debtor tracing service, providing accurate results with a rapid turnaround time and a 98% success rate.
We have been in the debtor tracing market since 2001 and use automated tools to get accurate results fast. We know that being a creditor is a stressful role, especially when your debtor is not paying as they should. We also understand that pursuing a debtor can be an expensive and drawn-out process that results in frustration.
Our service is here to help creditors locate debtors so that further action can be taken successfully. We offer a range of packages to choose from and are always on hand and ready to support when you need us. Take a look at some of the key services that may be of benefit to you:
Debtor Address Tracing
If you have been unable to reach your debtor and are worried that they may have moved without informing you, then our debtor tracing service is the ideal solution. In just two working days, we can provide you with the address of your debtor as supplied on the credit reference agency data sets. We then cross-check this data with other debtor tracing software so that you can be certain that the address we provide is the most accurate and up to date.
Many courts will ask for evidence of your correspondence before being willing to issue a money order, and if the debtor has moved, then they will likely be given time to resolve the matter with you before an order is agreed. Rather than being made to wait longer than you already have, using our debtor tracing service will provide you with the evidence you need that you have been communicating at the right address so that the court can proceed with issuing a money order.
This tracing agents service can be used by anyone that needs to find a debtor based in the UK for debt recovery purposes or litigation purposes. Plus, if we are unable to find your debtor, then we will refund the fee within seven days so that you are not left out of pocket.
Potential Asset Identification
If you are unsure of how to proceed with enforcement, then the DebtTrace Asset Identification service may help you decide. This service works by providing you with an up to date address and full contact details, including email, landline phone number and mobile phone number, allowing you to make meaningful contact with the debtor in order to progress your claim,
In addition to the contact details provided, we will also share information on their homeowner status, County Court Judgment history within the last six years and insolvency information within the last six years. This financial information will give you a clear idea of what financial position they are in so that you can choose the best enforcement method to achieve success.
This service is ideal for any creditor that needs to prove they have tried to communicate with a debtor and who needs to gain a better overview of the debtor's current situation.
Important Information to Note
When you decide to use the DebtTrace service, you are sure to be impressed with the provision we offer, but there are a few pointers that will help you to get the best results each time, including:
· Waiting for four weeks from the date your debtor has moved to get an accurate overview of their new address and to ensure that no out of date information is supplied.
· Requesting the information once as we do not offer a rechecking service for supplied cases, meaning that you should consider when it is best to proceed with tracing.
· Providing us with as much information as possible will enable us to return a more thorough result.
· We recommend upgrading your search from the most basic package if you want to access more detailed information.
A Team That is Committed to Results
When you engage DebtTrace to help with your debtor search, you are getting access to a people tracing team that is determined to provide you with accurate results in a short time frame. We understand the frustrations that creditors face when debtors stop paying and have designed our services to ensure you can access as much information as you need.
Take a moment to check out our website to find out more.
When you trust DebtTrace with your search, then you can look forward to great results every time – try us today!
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