Despite there being a County Court Judgment (CCJ) awarded against them, all too often a debtor fails to make payment and enforcement action becomes necessary. In this article we look at the different types of enforcement and consider the circumstances that would make a certain approach most appropriate. We also discuss the process and cost implications of each method.
With Debt-Claims, you will be pleased to know that you do not need to do anything more than simply tell us which enforcement method you want to proceed with and make payment of the appropriate fee – we will then do all the work and keep you updated via our portal.
Generally, if the CCJ allows for monthly payments by the debtor, you cannot enforce the CCJ unless the debtor has breached the payment terms set out. Similarly, you cannot execute more than one enforcement method at a time. There are limited exceptions to this rule with certain enforcement types, which will be discussed below.
County Court Bailiff
A County Court Bailiff, along with High Court Enforcement Officers (HCEO) are often collectively referred to as enforcement agents. This term can be unhelpful as although similar, bailiffs and HCEOs do have some marked differences.
Before a bailiff can enforce a CCJ, you need to apply for a Warrant of Control, a warrant authorises a bailiff to take control of possessions owned by the debtor, this includes possessions both inside and outside the property – such as vehicles. Once the warrant is issued, notice must be provided to the debtor before a bailiff can attend the debtor’s property. In some situations, the bailiff’s notice is enough for debtors to arrange payment. A bailiff can enforce judgments up to the value of £5,000. If your CCJ is over this amount, an alternate method of enforcement will be required. Bailiffs are employed by the court and their pay is set upon their employment and not on recovery of debts.
Ultimately, a bailiff’s aim is to get a CCJ paid in full. If they cannot get paid in full, they will look to remove goods to sell at an auction to extinguish the debt owed under a CCJ. A bailiff can also ‘take control’ of goods but leave them on the debtor’s property. On occasion, a bailiff may enter into a payment arrangement or a Controlled Goods Agreement (CGA). A CGA means that goods will not be removed immediately provided that a debtor sticks to the payment arrangement.
When a bailiff attends the debtor’s property, what they can and can’t do depends on the type of property. For example, a bailiff attending a residential property cannot force their way inside (there is a small exception to this rule, discussed in a moment). With business premises, a bailiff can force their way inside. If the bailiff is attending a residential address and they have previously taken control of goods and there is a CGA in place which the debtor has breached, then providing that notice has been given by the bailiff, they can force entry into a debtor’s home.
Once a warrant is issued, a bailiff can enforce the same for up to 12 months from issue. The costs of applying for a warrant include a court fee and a nominal cost for the solicitors who make the application. Currently (28/04/2022) the costs consist of an £83 court fee and £2.25 solicitors’ costs. Both costs are added to the balance payable under the warrant and are recoverable from the debtor.
Debt-Claims only charge you the same fixed costs that are recoverable, meaning once the debtor has paid you will have recovered all your costs too.
Enforcement by the bailiff would be an appropriate method of enforcement where the debt is less than £600 (this is because debts £600 or greater can be enforced via the HCEO) and you are aware that the debtor has assets that could be seized. The court bailiff can be used to enforce CCJs that relate to an agreement which is regulated by the Consumer Credit Act 1974, whereas a HCEO cannot.
High Court Enforcement Officer (HCEO)
In a similar manner to the bailiff, before a HCEO can enforce a CCJ, you need to make an application. In this case, the application is made to the High Court for a Writ of Control; a writ authorises a HCEO to take control of possessions owned by the debtor, this includes possessions both inside and outside the property – such as vehicles. As with the warrant, once the writ is issued, notice must be provided to the debtor before an attendance can be made.
A HCEO is not employed by the court, rather, they are privately employed agents who work for an authorised business. As they are not servants of the court, their pay structure differs in that they are often incentivised by positive collections, whereas bailiffs are not. This itself can often mean a HCEO is more likely to recover your debt as their pay can relate to how much they collect. Another factor that leads to creditors choosing a HCEO over a bailiff is that interest is charged on the CCJ at 8% per annum, meaning that a creditor can recover a greater sum. Despite the positives, there are a few limits on HCEOs, such as they cannot enforce a CCJ that relates to an agreement which is regulated by the Consumer Credit Act 1974 and they can only enforce a debt which has a minimum value of £600, however there is no upper limit.
Much like a bailiff, a HCEO will look to remove goods to sell at an auction to extinguish the debt owed under a CCJ if they are not paid in full. Similarly, a HCEO can also ‘take control’ of goods but leave them on the debtor’s property and a HCEO may enter a payment arrangement or a CGA.
A HCEO can also force entry into business properties. Their access to residential properties is also the same as the bailiff, unless the criterion for forcing entry is met (controlled goods, breached CGA, and notice of intention to force entry).
Once a writ is issued, it can be enforced for up to 12 months from issue. The costs of applying for a writ include a court fee and solicitor’s costs, who make the application. Currently (28/04/2022) the costs are a £71 court fee and £51.75 solicitor’s costs. If the enforcement is unsuccessful, an abortive fee of £75 will also be payable. All of these costs are recoverable from the debtor and Debt-Claims only charge you the same fixed costs that are recoverable, meaning once the debtor has paid you will have recovered all your costs too.
Enforcement by the HCEO would be an appropriate method of enforcement where the debt is £600 or over and you are aware that the debtor has assets that could be seized.
Attachment of Earnings (AOE)
In short, an attachment of earnings order directs a debtor’s employer to make regular payments to a creditor until the judgment debt is discharged.
An AOE is limited in that it will only be viable where the debtor is an individual and they are employed. You cannot apply for an AOE against a company or an individual who is only self-employed. Before you begin an AOE application, there must be at least £50 owing on the judgment.
To apply for an AOE, you must make an application to the court. Following this, the court will write to the debtor with a form to fill in about their employment and circumstances. A debtor can on this form ask the court to make the AOE order suspended, but they will have to justify their reasons. Generally, however, the debtor will complete the form and return it to the court, who will then instruct the debtor’s employer to make payments each month from the debtor’s wages. The order will only be made if the debtor earns more than the ‘protected rate’ which is a figure set by the court to cover essentials needed by the debtor.
If the debtor does not complete the form, then the court can either write directly to the employer (if you know the debtor’s employer) or send bailiffs to the debtor to serve them personally with the form. If the debtor continues to ignore the form from the court, they risk being summoned to a court hearing to explain their self.
If the debtor receives an average wage, you may only be awarded a figure of around £80 per month. On a large judgment therefore, it could take considerable time for the balance to be repaid. Once the AOE order has been sent to the employer, the employer will deduct wages and send them to the court’s centralised body for payments. In turn, this body will make a payment to you or Debt-Claims. Because of this chain of bodies, you may not see the first payment for 2-3 months after making the application.
In terms of effectiveness, where the debtor is an individual and they don’t have assets that could be seized, an AOE can be particularly effective, albeit it can take some time to recover the full balance.
The costs for making this application (correct as of 28/04/2022) are a £119 court fee and £225 solicitor’s costs. The £119 court fee is added to the balance payable by the debtor.
Third Party Debt Order (TPDO)
Briefly, a TPDO is used where a third party holds money on behalf of the debtor. This could be any third party but is in most cases a bank. A TPDO can be used against any debtor type and is an effective method of recovering an unpaid CCJ where you know that the debtor has savings.
To start the process, you make an application to the court providing details of the debtor and the third party. The court will usually make an interim TPDO which will be served on the third party and the debtor. This interim order instructs the third party to not release the money to the debtor. The interim order will also include details of when the court will consider making the order ‘final’. A final order means that the court are satisfied based on the evidence from you, the debtor, and the third party that there are sufficient funds to be released by the third party to you. The court will consider any hardship that the order may have on the debtor.
The costs for making a TPDO application (correct as of 28/04/2022) are a £119 court fee and £225 solicitor’s costs. The £119 court fee is added to the balance payable by the debtor. If the matter is listed for a hearing for the final consideration, then further costs may apply.
A charging order places a charge over property owned (or part owned) by the debtor, this includes where the debtor is an individual or a separate entity, such as a company.
Whilst there is a charge over the debtor’s property, then assuming that it is registered with the Land Registry, a debtor is unable to dispose of their share of the property without discharging the debt first. A unique point to charging orders is that you can obtain a charging order even if the judgment is payable by instalments and the debtor is up-to-date and also if another enforcement method is in place, such as the HCEO. The limit of a charging order is that it doesn’t compel the debtor to settle the debt and if the debtor does not intend to dispose of their property, it could be some time until you see the benefit. However, the very making of a charging order is enough to get most debtors to sit up and address the situation. If they do not, then depending on the circumstances, there is scope to make an application to force a sale of the property.
The charging order process begins with obtaining copies of the title documents from the Land Registry and finding out what interest the debtor has in the property. From there, an initial application is made for an interim charging order. The interim order is usually made without problem.
Once the interim order is made, you should register this with the Land Registry, this stops the debtor selling the property without paying you first. In the meantime, the court will list the matter for a final hearing to decide if the order should be made final. Assuming that it is, your charge over the debtor’s property continues and does not expire after a certain amount of time.
The costs for a charging order (correct as of 28/04/2022) are £119 court fee, Debt-Claims’ fee of £350, Land Registry fees of £3 and £45. Both Land Registry fees, along with the court fee and £110 of Debt-Claims’ fee are added to the balance payable by the debtor.
If the debtor objects to the final order being made or a hearing is listed, then costs could increase.
Order to Attend Court for Questioning (Questioning Order)
The final method of enforcement is a questioning order. Whilst not strictly a method of enforcement as it doesn’t force a debtor to pay, it is nonetheless an effective method of getting their attention and agreeing a payment arrangement.
A questioning order can be used against either an individual or a company (where a director is summoned on behalf of the company). In a similar way to the charging order, the debtor does not have to have missed any payments and you can make a questioning order whilst continuing with other enforcement.
After making the application, the court will send you an order giving the time and date of the hearing which you will need to arrange to be served on the debtor personally – this means hand delivering it to them and physically giving them a copy. At the hearing, the judge will question the debtor as to why they have not paid and will try to ascertain some sort of payment arrangement, although this is not always possible. You can also list additional questions that you want the judge to ask, this is particularly useful for example if you’re trying to obtain details of any property that the debtor owns.
If a debtor fails to comply with the order and attend the hearing, then they risk being held in contempt of court and physically imprisoned for their actions. The punitive nature of this order means that debtors will seldom fail to act as they should.
The costs to apply for a questioning order are a court fee of £59, Debt-Claims’ fee of £225 and service costs of approximately £100. Only the £59 court fee is claimable back from the debtor. With a questioning order, you should be aware that you may have to pay the debtor’s costs incurred by them in attending court for the questioning.