Enforcing a County Court Judgment – is not as simple as it may seem!

Pursuing a debt recovery claim may seem straight forward and in fact we find there are some elements of the Court system which encourages litigants in person.  For example, in using the Money Claims Online system (‘MCOL’).  However, obtaining and enforcing a County Court Judgment (otherwise known as a ‘CCJ’) is not always as simple as it may seem.

CCJ enforcement has been on the rise for several years and certainly post covid we have seen a marked increase but simply choosing the best enforcement option for you,  can be the difference between getting paid, or not getting paid.

A CCJ endorses a debt.  It is a document produced by the Court stating that the money is owed, and that it must be repaid. We must stress however that having a CCJ does not guarantee that the debt will be repaid.

Despite the request from the Court, when a CCJ is not repaid then a creditor must consider enforcement action and there are various options available to a creditor to enforce their CCJ.

Once a CCJ has been issued by the Court, the debtor needs to pay the CCJ within 30 days or it will be automatically entered on their credit file – irrespective of whether the debtor is an individual or a business.

If the debtor fails to repay the CCJ then enforcement action can begin.

Before choosing a CCJ enforcement option, there are several things that the creditor needs to consider. As we have already touched on earlier, obtaining a CCJ can be a straightforward process but enforcing it is rarely so simple.

A creditor needs to understand if the debtor has the financial means to pay the debt. This can mean by way of funds held in a bank account or goods and assets to cover what is owed or maybe, the debtor owns a property upon which the debt can be secured on.

If the debtor has no assets, no income and no property ownership, CCJ enforcement action may be fruitless. It is always important to remember that CCJ enforcement does not come with any guarantees.

If you believe that the debtor is heavily in debt then it may also be worth checking the insolvency register.  A quick search will tell you if a person has gone bankruptcy or signed an agreement to deal with their debts. The Government website is free to search – click here.

The main options available to a creditor for enforcing a CCJ are:

  • Bailiff or High Court Enforcement;
  • Charging Order;
  • Third Party Debt Order;  or
  • Attachment of earnings.

Bailiff or High Court Enforcement

Enforcement by way of a Bailiff or High Court Enforcement is by far the most popular and commonly heard used forms of enforcement.

This is where the debtors address is visited in order to obtain payment or seize goods to cover the value of the CCJ.

Presently debts under £600 can only be collected by County Court Bailiffs. A warrant of control can be applied for at the County Court which will then be passed to the Bailiff to execute.

If the debt is over £600 then the CCJ can be transferred up the High Court and a ‘Writ of control’ obtained. This allows a High Court Enforcement Officer to act on the creditor’s behalf.

The use of High Court Enforcement Officers is considered a more robust and quicker method when compared with County Court Bailiffs.

Charging Order

Payment of a CCJ can also be secured by applying to the Court for a charge order on the debtor’s property. This is not the quickest way for enforcing a CCJ but does at least secure the debt. It effectively transfers your debt from an unsecured,  to a secured debt but your debt will not be repaid until the property is sold.

In some circumstances a creditor may apply for an Order of Sale to force the debtor to sell the property. This is not always a straightforward exercise, and the court will consider various aspects and take into account the debtor’s circumstances before allowing such an Order.

Third Party Debt Orders

A very efficient way to enforce payment of a CCJ is to freeze a debtor’s bank account. This can be used for both unpaid Business CCJ’s and CCJs against individuals. This can allow for funds to be extracted from their bank account to pay the CCJ in full. This is a worthwhile method of CCJ Enforcement where the creditor has knowledge of the debtor’s bank account details and that there are adequate funds in the account.

Attachment of earnings (deduction from wages)

Attachment of earnings applications are only suitable for enforcing a CCJ against an individual. It allows for deductions to be made from a debtor’s wages in order to pay off the CCJ in instalments.

It is worth noting that debtors have a ‘protected earnings rate’ applied by the Court and are allowed to take home a minimum amount of their wages.  In addition, the creditor is responsible for informing the Court of the debtor’s employment details therefore if your debtor is known to jump from job to job then it can be quite time consuming and sometimes difficult to obtain their employment details.

As the debt is paid by instalments and sometimes the monthly payments are low, it is not the fastest method of enforcing a CCJ but, it is still effective.

Insolvency Proceedings for a CCJ

If it is clear that the either the business or an individual debtor does not have sufficient means to pay the CCJ then a last resort can be insolvency proceedings.

This is where an individual can be made bankrupt or a company forced into liquidation. The aim of insolvency proceedings is to liquidate all assets and pay off creditors debts. It can be a complex and timely exercise. Again, this comes with no guarantees and is reliant on the insolvency practitioner liquidating assets to be able to pay dividends to creditors.

It can be expensive and should only be used as a very last resort. Insolvency should not be used as a general method of enforcement and only when the creditor is absolutely sure that the debtor cannot pay their debts as they fall due.

And finally … always proceed with caution…..

Before any creditor sets out to enforce their CCJ, it is essential to do your homework before hand. If the debtor has absolutely no means of paying the debt then CCJ enforcement is not a viable option.

A CCJ will stay on a Debtors credit file for six years. You may at any time during that six year limitation period commence enforcement.  It could be that whilst at the present moment CCJ enforcement is not feasible, the debtors’ circumstances may change so it’s worth reviewing on a regular basis to check the debtor’s position.

If you have any queries about this article, please contact Allison Thompson on 0191 2267878.

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