Obtaining a judgment or order in your favour is only the first step in obtaining financial redress, especially given that a Court will not automatically enforce any order. The onus is placed upon the judgment creditor to take enforcement action. You should not simply embark on issuing a winding up or bankruptcy petition or statutory demand without considering the matter carefully and taking advice as there are multiple methods to ensure a judgment debt is paid.
How do I enforce a judgment debt?
Before a judgment creditor can enforce a money judgment and seek financial restitution, it is good practice to check certain preliminaries before an enforcement strategy is chosen, namely:
Is the judgment debt enforceable?
The judgment debtor must have been provided the opportunity to pay the sum ordered by the Court and payment should be overdue before enforcement proceedings are commenced.
Therefore, it is important to calculate when the debt has become overdue. Guidance is found in CPR 40.11 which states that if the order does not specify a time to pay then the debtor has 14 days from the date of the judgment.
It is essential (pursuant to CPR 40.4) that a judgment creditor serves the debtor with the judgment (either themselves or via the Court).
How old is the judgment debt?
Unlike with other court claims (see our article on limitation here), judgment debts are not subject to limitation issues. Although section 24(1) of the Limitation Act 1980 states that an action cannot be brought 6 years after a judgment has been handed down, the House of Lords in Lowsley v Forbes  3 WLR 501 held that an action is defined as a fresh action therefore enforcement proceedings are not time limited.
However, any delay is not advisable and provides the debtor with the opportunity to liquidate their assets without paying the debt that is due. If you are owed sums by a judgment debtor, you should seek advice from specialist debt recovery lawyers as soon as possible to maximise the chances of recovery.
Ascertain the judgment debtor’s assets
It is important to make enquiries as to the assets held by the debtor and in what form as this will be important when deciding which enforcement method to pursue.
Enquiries can be pursued in a number of ways including:
- requesting the debtor to voluntarily provide a list of their assets;
- consulting the Insolvency Register to check whether the debtor has been declared bankrupt;
- do a land registry search to ascertain whether the debtor owns the address that you have on record for them;
- search of Companies House to see whether the debtor’s company has any assets or has been wound up;
- instruct an enquiry agent; or
- an internet search to see whether any other information is available on the debtor.
What are the different ways of enforcing a judgment debt?
Take control of the debtor’s goods
If the judgment debtor has goods of value to satisfy the debt, then one method of enforcing judgment is for the creditor to take control of the goods. This can be achieved by requesting either a writ of control from the High Court or a warrant of control from the County Court. This court order authorises an enforcement officer to seize the debtor’s goods and sell them to raise funds to satisfy the judgment debt.
Third party debt order
This allows a creditor to recover the debt owed from a third party who holds funds for the debtor, for example a bank account.
Obtaining a charging order allows a creditor to obtain a charge over a debtor’s beneficial interest in land. The debt would then be paid following the sale of the property that has the charging order over it.
Attachment of earnings
An attachment of earnings order ensures that a proportion of the debtor’s salary is deducted by their employer and paid to the creditor until the whole of the debt is paid.
Application for an order that debtor attends Court for questioning
In some circumstances, it can be difficult to ascertain whether the debtor has any assets or not in the jurisdiction to enforce the judgment debt. In that case, an application can be made to the Court to compel the debtor to attend Court for questioning and provide evidence of any assets and income. Following this, a creditor will be on stronger footing and know which property and/or assets can be targeted in order to ensure the payment of the debt.
Commence insolvency proceedings
Our specialist insolvency team will advise you on the optimal way to seek redress from a judgment debtor. For example, if you are owed more than £5,000 from an individual then a bankruptcy petition can be presented. If you are owed more than £750 then a winding up petition can be presented. Before doing so, it may be necessary to first serve a statutory demand.
The threat or commencement of winding-up proceedings can put considerable pressure on a company to pay an outstanding debt promptly and the basic procedure is relatively inexpensive. Therefore, winding-up proceedings can be regarded as a method of debt enforcement. However, these proceedings should generally be regarded as a last resort. The court requires a creditor to behave reasonably before commencing winding-up proceedings and, in particular, to write to the company with details of the debt and demanding payment. Further, it is an abuse of process for a creditor to commence winding up proceedings on the basis of a debt which is genuinely disputed and there may be adverse costs consequences.
Instruct expert insolvency solicitors to pursue your judgment debt
We are lawyers that specialise in recovering unpaid debts from individuals or companies so we know the best way to get your unpaid debts paid up quickly. This may involve Insolvency or Litigation proceedings.
To date, we have a 100% success rate and all of the petitions we have issued have been resolved in our client’s favour. This has also meant that the petitioned company or individual has paid our fees. Luckily for our clients this means instructing us to pursue their bad debts has ultimately recovered the sums owed plus interest with a refund of their legal costs.
As a result of our success we are now able to offer clients a proactive debt recovery package for a small fixed fee (which is likely to be refunded!).
Specialist Debt Recovery Lawyers
We provide a no cost initial case review to establish whether or not we can help you. We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inns of Court adjacent to the Royal Courts of Justice. We are experts in dealing with matters surrounding insolvency in particular issues. Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules.