Although obtaining a court judgment may feel like a victory, it may only be the first step towards getting your money back. This is because court judgments are not automatically enforced.  If a debtor chooses to ignore the judgment you have obtained, you will need to take further action to get payment.

The key to maximising your prospects of success is to pick an enforcement strategy suited to your needs and, if appropriate and cost effective, to use more than one method at a time. 

Jonathan Durkin, debt recovery and dispute resolution solicitor at Prosperity Law Liverpool and Manchester outlines the key considerations.

Information about the debtor’s financial circumstances

In the first instance, it is vitally important to consider the financial situation of your debtor.  If you do not have this information you can apply to the court for an order which requires the debtor, or a representative of the debtor if they are a company, to come to court to provide evidence of their financial circumstances. This can be an extremely useful way of helping you to identify which methods of enforcement are likely to be the most effective.

Seizing the debtor’s assets

A quick and efficient way to recover a debt following a court judgment is to use either a county court enforcement agent or a high court enforcement officer to seize assets owned by the debtor under what is known as a ‘warrant of execution’ in the county court or a ‘warrant of control’ in the high court.  This could involve vehicles or IT equipment owned by the debtor being seized and sold to pay the debt, as long as these items are not subject to contract hire or hire purchase.  It could also involve seizing items from the debtor’s home worth up to four times the value of the debt and selling these. 

A ‘writ of control’ can also be used to seize company assets.  However, a warrant of execution cannot be used to seize work equipment or tools from a self-employed debtor worth no more than £1,200.  Above this figure, business assets can be seized along with the debtor’s personal belongings. 

Obtaining payment from someone else

If the debtor has a bank account in credit, or is due to be paid a salary, a ‘third party debt order’ can be used to tap into these funds to settle the whole or part of the debt.  If the debtor is an individual and they are employed, an ‘attachment of earnings’ order can be used to force the employer to deduct an agreed amount each week or month from the debtor’s salary until the money has been paid.  

Securing the debt against the debtor’s home

It is possible to obtain a ‘charging order’ against the property of a debtor who owns their own home. This, in effect, gives you a mortgage over the property and could enable you to force a sale of the debtor’s home if they fail to pay the debt to have the charging order removed. Charging orders and orders for sale are complex and always require specialist legal advice.

Making the debtor bankrupt or winding up their company

As a last resort, you can apply to make an individual bankrupt or apply to wind up a company.  A bankruptcy petition or winding up application can be used where:

•    in the case of an individual debtor, the amount owed is more than £5,000;
•    in the case of a company, the amount owed is £750 or more; and
•    in either case, you can show that the debtor is unable to pay the debt now and has no reasonable prospect of settling it in the near future. 

Before issuing a bankruptcy petition or making a winding up application, you need to serve a statutory demand formally requesting that the debt be settled, and very often this can force the debtor to pay up without any further action being necessary.
 
If you have a court judgment that needs enforcing, please contact Jonathan Durkin on 0151 958 0057 or email Jonathan@ProsperityLaw.com