Enforcing a Debt

Conversely, defendants may attempt to stave off litigation by actually suggesting that they would not be able to satisfy a successful claim brought against them. This is perhaps not surprising, but in any event their ability to pay needs to be rigorously investigated very early on to ascertain whether the defendant can pay. We can arrange for the defendant’s financial background to be investigated and for a report to be produced so that an informed decision can be made as to whether to pursue the claim. There is rarely merit in pursuing a defendant who can’t pay.

 

If a claimant successfully pursues a claim, the defendant typically has 14 to 28 days to discharge the judgment debt (i.e. the amount of money which the Court has ordered the party to pay). If the defendant fails to do so then it is open to the claimant to take steps to secure the recovery of the sum due. In most cases the following options are available:

 

 

Nationally this is the most well-known and widely-used enforcement action. A bailiff or, where the sum owed is greater, a High Court Enforcement Officer can be appointed to attend the debtor’s premises to seize and sell goods to the value of the debt. The procedure is quick and straightforward but will only be of assistance if the debtor has sufficient goods which can be sold at auction to discharge all of most or the judgment debt and the officer’s fees.

 

A Third Party Debt Order (“TPDO”) is a means of securing monies which, although not in the debtor’s possession, are owed to the debtor by a third party (such as the debtor’s bank account balance or a sum owned by a trade creditor of the debtor). The third party presented with the TPDO is required (by order of the Court) to preserve the monies and thereafter to pay them direct to the party in question.

 

 

A Charging Order can be ‘attached’ to a house or building to ensure that it cannot be sold unless the debt is discharged in advance – thereby preventing the debtor from disposing of the sale proceeds. The Charging Order can remain on the property indefinitely or until such time that it is sold (gathering interest in the meantime). If the debt is of sufficient value then the claimant can apply to the Court for an Order forcing the sale of the property so as to bring about payment sooner.

 

 

In the case of a debtor who is an individual in employment, the employer can be compelled by an Order of Court to ensure that monies are deducted at source (in the same manner as income tax and National Insurance are) and paid directly to the judgment creditor in weekly/monthly instalments until such time that the judgment debt is discharged in full.

 

 

It is possible to petition for the bankruptcy of a judgment debtor for debts exceeding £750. The threat of bankruptcy can be extremely persuasive for those who would rather avoid bankruptcy (professionals, company directors etcetera). In bankruptcy the bankrupt’s assets are divided amongst the various creditors.

 

 

The threat or commencement of winding up proceedings against a company can result in the debt being recovered quickly – especially where the company is solvent and has a lot to lose from even the threat of insolvency proceedings. If the Court grants a winding-up Order, the liquidator will take control of all the company’s assets, which will then be distributed to the creditors.

 

With such a wide range of enforcement options available to a judgment creditor, it is important to ensure that the most effective course of action is taken and that the question of a defendant’s ability to pay has been at the forefront of the claimant’s mind from the outset. Langleys’ tactical and commercial approach to debt collection and Judgment enforcement ensures that that those who can pay will pay.

To speak with James call 01904 683095 or send him an email.