Enforcement Flashcards
(19 cards)
Q: What is post-judgment enforcement, and why is it necessary?
A: Winning a judgment does not guarantee payment; the creditor must enforce it if the debtor fails to pay. Reasons for non-payment include lack of funds or avoidance. The court does not AUTOMATICALLY enforce judgments.
Q: Why should enforcement viability be assessed before trial?
A: To avoid wasting money on obtaining judgments against parties who cannot pay. Early investigations into the debtor’s whereabouts and assets help determine enforcement feasibility.
Q: What are two ways to investigate a debtor’s means?
1. Instruct an Enquiry Agent:
Effective for uncovering hidden assets but incurs additional costs.- Like a private investigator for assets
2. Apply for an Order to Obtain Information (Part 71 CPR):
Requires the debtor to disclose financial details under oath in court.
Q: What is an Order to Obtain Information under Part 71 CPR?
A: A court order requiring the debtor to attend court and provide financial information under oath.
Q: What are the key enforcement methods available to a judgment creditor?
- Taking Control of Goods (Part 83 CPR)
- Charging Orders (Part 73 CPR)
- Third Party Debt Orders (Part 72 CPR)
- Attachment of Earnings (Part 89 CPR)
Q: What is “taking control of goods”?
A: Enforcement officers seize and sell the debtor’s possessions to recover the judgment debt.
Q: Who carries out enforcement for taking control of goods?
High Court: High Court Enforcement Officers (HCEOs).
County Court: County Court Enforcement Officers (bailiffs).
Q: What items are exempt from seizure?
Personal necessities: Clothes, bedding, basic furniture, and tools essential for work (up to £1,350).
Third-party goods (owned solely by others).
Disputed goods (e.g., co-ownership disputes).
Q: What are the advantages and disadvantages of taking control of goods?
Advantages:
- HCEOs are incentivised to recover debts effectively.
- Interest accrues during High Court enforcement. This means the creditor earns 8% statutory interest each year on the unpaid debt until it is paid, which compensates for delay and pressures the debtor to settle. While the debtor delays payment, the creditor keeps earning more money through interest — so it pressures the debtor and compensates the creditor for the delay.
Example:
If the debt is £10,000 and the debtor doesn’t pay for a year, an extra £800 of interest could be added.
Disadvantages:
- Limited entry powers; officers cannot force entry into homes.
- Hidden assets and low resale values reduce recovery.
Q: What is a charging order?
A: It’s a legal charge that attaches judgment debts against land or other securities until the property is sold or an order for sale is obtained.
Q: What is the 3-step procedure for obtaining a charging order on land?
1. Interim Charging Order (ICO): Filed with judgment details and served on the debtor.
2. Final Charging Order (FCO): Granted after a hearing, resolving disputes if any.
3. Order for Sale: Fresh proceedings required to enforce the charge via sale.
Q: What are the advantages and disadvantages of charging orders?
Advantages:
* Secures debts when liquid assets are unavailable.
* Debtors may repay to avoid accruing interest.
Disadvantages:
* Delayed recovery if equity is insufficient.
* Orders for sale may be refused due to hardship.
Q: What is a third party debt order?
A: It directs a third party (e.g., a bank) to pay the creditor (the person to whom the debt is owed) directly from funds owed to the debtor by the third party i.e. bank debit balance/the debtor’s own funds that the bank owes to them.
Q: What is the procedure for a third party debt order?
- Application filed WITHOUT notice to the debtor.
- Interim order freezes the funds.
- Hearing decides whether to make the order final.
Q: What are the advantages and disadvantages of third party debt orders?
Advantages:
- Surprise element; debtor is unaware until funds are frozen.
- Effective against liquid assets.
Disadvantages:
* Funds can be moved before the application.
* Joint accounts or insufficient credit result in failure.
Q: What is an attachment of earnings order?
A: It compels a debtor’s employer to deduct payments from their wages and pay them into court.
Q: What are the key steps in the attachment of earnings procedure (4)?
- Application to the Civil National Business Centre.
- Court notifies the debtor to either pay the debt or file a statement of means.
- Court officer issues an order specifying:
* Normal Deduction Rate (regular payments).
* Protected Earnings Rate (minimum income for basic living). - Order sent to employer for deductions.
Q: What are the advantages and disadvantages of attachment of earnings orders?
Advantages:
- Provides steady payments if the debtor is employed.
- Reduces complexity for creditors.
Disadvantages:
- Stops if the debtor loses their job or changes employers.
- Low deduction rates may prolong repayment.
Q: What are the main considerations for choosing an enforcement method?
- Debtor’s financial situation.
- Type of assets available.
- Legal restrictions (e.g., High Court vs. County Court jurisdiction).
