Enforcement of Money Judgments

Question 1

What are the two ways of obtaining information about the judgment debtor’s financial circumstances?

Answer 1

1) Instruct an enquiry agent; or
2) Apply to the court for an order to obtain info from the debtor.

Question 2

Who is the judgment debtor?

Answer 2

The party liable to pay the judgment.

Question 3

Explain the procedure for obtaining a court order to obtain information about a judgment debtor’s finances.

Answer 3

1) Judgment creditor files notice of application at court with details of debtor’s name, address, the judgment which has been obtained and the amount owed.

2) Order personally served on debtor. Debtor can request (within 7 days) payment for reasonable travel expenses to and from court.

3) Hearing usually takes place in county court in area where debtor resides.

4) Examination conducted by officer of the court, but director can request a judge.

5) Standard questions are asked but creditor can request additional questions are asked. Officer notes down responses, and debtor will be asked to re read and sign the responses at the end of the hearing.

6) If debtor fails to attend hearing, judge can make committal order against them (which is usually suspended provided debtor complies with the order).

Question 4

What is an order to obtain information?

Answer 4

Court order to obtain info from judgment debtor.

Requires debtor to attend meet officer of the court to be questioned under oath about their finances (or the finances of the company of which they are an officer).

Question 5

What are the four main methods of enforcing a judgment?

Answer 5

1) Taking control of goods;

2) Charging order;

3) Third party debt order;

4) Attachment of earnings order.

Question 6

Who carries out a taking control of goods enforcement of a judgment debt?

Answer 6

In the high court - High Court Enforcement Officer.

In the country court - bailiffs.

Question 7

What are the powers of enforcement officers?

Answer 7

They cannot force entry into debtors home, but can use reasonable force to enter business premises if they believe goods are inside.

Question 8

What can be seized under a taking control of goods order?

Answer 8

Cars, computers, banknotes, boats or even share certificates.

Question 9

What is exempt from being seized as part of an enforcement order?

Answer 9

The necessary items exemption.

Only applies to individuals (ie not partnerships, LLPs limited companies etc).

Clothing, bedding, furniture and household equipment reasonably required for the basic needs of the debtor and their family can’t be taken.

Work tools, computers, vehicles and other equipment necessary for the debtor’s own work or study cannot be taken (with aggregate value under £1350).

Goods which belong to other people (eg a spouse or family member), or goods subject to HPAs cannot be removed.

Question 10

Where the ownership of goods being seized is disputed (eg debtor says they belong to someone else) who resolves such a dispute?

Answer 10

The court.

Question 11

Explain the procedure for carrying out a seizure of goods under a writ of control in the county court.

Answer 11

1) Creditor files form of request for warrant of control at county court hearing centre in the area of the address where the goods are to be seized.

2) Warrant is executed by enforcement officer for where debtor resides/ carries out their business.

Question 12

What is a controlled goods agreement?

Answer 12

Agreement between debtor and enforcement officers which allows them further time to pay the debt.

Debtor acknowledges the enforcement agent has taken control of the goods, but that they will not remove or dispose of them before the debt is paid.

Goods remain on the premises for a few days, allowing debtor a final opportunity to pay.

No payment within time set out in agreement = goods sold at auction and proceeds used to pay the debt. Any surplus is returned to the debtor.

Question 13

What is a charging order?

Answer 13

A charge made over either land or securities (stocks and shares).

Creditor is placed in similar position to a mortgagee. Charge sits against asset until creditor wishes to apply for a court order for the sale of the asset.

Question 14

How is charging order against land made?

Answer 14

Must be registered at LR once made (or on the Land Charges Register if the property is unregistered).

Creditor then has charge over the land, but has to apply for court order for the sale of the land charged.

Judgment satisfied by the proceeds once the land is sold

Question 15

Can a creditor apply for a charging order over land which is owned by the debtor jointly with another person?

Answer 15

Yes.

In this situation, an order is a charge upon the debtors own beneficial interest, rather than upon the land itself.

Question 16

In which court should the charging order be sought?

Answer 16

If under 5k, the county court.

If over 5k, it can be made wither in the county court or the high court.

Where an order is being requested in the county court, it should go through the County Court Money Claims Centre.

Question 17

List the three stages of the procedure necessary to apply for a charging order.

Answer 17

1) Interim charging order.

2) Final charging order.

3) Order for sale.

Question 18

Explain the first step of applying for a charing order - Interim Charging Order.

Answer 18

Creditor files application notice, including details of judgement debt, land over which charing order is sought and names and addresses of any other persons affected (eg those with current charges over the land). Creditor must also file a draft interim charging order (ICO).

Application usually dealt with by court officer without hearing, who either makes ICO or refers matter to judge to consider further.

ICO application notice and docs filed in support must be served on debtor by the creditor within 21 days of notice being submitted.

Debtor then has 14 days to request court officer’s decision is reviewed by a judge.

Question 19

Ex[plain the second step of applying for a charing order - Final charging Order.

Answer 19

If anyone objects to making of the final charging order, they must file and save written evidence stating the grounds of objection within 28 days of service of the ICO .

If an objection is received, court will transfer application to debtors home court for a hearing.

At hearing, court can make FCO/ discharge the ICO/ direct a trial of any issues in dispute between the parties.

Question 20

When is a charging order the best option?

Answer 20

If debtor has little liquid assets to repay debts.

Interest continues to accrue (unless debt falls under CCA 1974).

Not a good method where the land is already subject to many charges which will rank ahead in the order of priorities.

Question 21

Explain the third step of the charing order process - order for sale.

Answer 21

If interim order is made final, creditor has a charge over debtor’s land (to be enforced on the sale of the property).

To obtain a sale order, fresh proceedings must be commenced.

Question 22

Can a creditor obtain a charing order over securities?

Answer 22

Yes.

Order granted over the debtor’s beneficial interest in any stock/shares/unit trusts.

Order normally provides that charge extend to any interest/dividend payable.

Procedure is the same as applying for charge over land.

Question 23

What are third party debt orders?

Answer 23

Court order under part 72.

Requires third party to pay creditor sufficient monies to satisfy judgment and debt costs.

Debt must belong to the judgment debtor solely and beneficially for an order to be granted.

Question 24

What are the two types of third party debt orders commonly enforceable?

Answer 24

Money which is owed to the debtor as trading debts; or

Money held in bank or building society accounts (ie money in bank accounts of the debtor).

Question 25

Will an application for a third party debt order over a bank or building society account in the joint names of the debtor and another unrelated person be successful?

Answer 25

No. Court CANNOT make a third party debt order over a bank account held in joint names of a debtor and another.

Question 26

What is an attachment of earnings order?

Answer 26

Order which compels debtor's employer to make regular deductions from debtor's earnings and pay them to the court.

Question 27

Where should an application for an attachment of earnings order be made?

Answer 27

In the county court (HA has no power to make these orders). If judgment made by HC, it must be transferred to the county court before this method of enforcement can be used.

Question 28

What is the protected earnings rate?

Answer 28

The amount the court officer considers reasonable for the debtor to live on.

Question 29

What is the deduction rate?

Answer 29

The amount deductible from the debtor's pay per month.

Question 30

In what situations will a judge get involved in an application for an attachment of earnings order?

Answer 30

If there has been insufficient information provided to make the order.

Question 31

What happens to the attachment of earnings order if the debtor loses their job?

Answer 31

The payments will stop as debtor must be employed for the payments to continue.

Question 32

What happens if the debtor moves employment?

Answer 32

The process must be repeated (ie it does not automatically transfer when the debtor get a new job - new application must be made by the creditor).

Question 33

How is a judgment made in England or Wales enforced in Scotland or Northern Ireland?

Answer 33

Part 74 requires creditor to: 1) Obtain certificate confirming the date of the judgment, sum awarded and details of interest and costs; and 2) Make application to court in Scotland/NI to register judgment within 6 months. Application must be supported with the relevant evidence.

Question 34

How is a High Court judgment in England or Wales enforced in a commonwealth country?

Answer 34

Under Administration of Justice Act 1920, the creditor has 12 months to apply for enforcement. Failure to do so means the creditor loses their right to enforce the judgment outside the jurisdiction.

Question 35

How is a County Court judgment in England or Wales enforced in a commonwealth country?

Answer 35

Under the foreign Judgments (Reciprocal Enforcement) Act 1933, the creditor has 6 years to apply for enforcement (provided it falls within the remit of the act).

Question 36

Explain how judgments can be enforced in countries which are not in the UK or the Commonwealth.

Answer 36

If the Hague Convention applies, judgment will be enforceable and recognised in that country. If not, in most other countries the creditor would have to start fresh proceedings in that jurisdiction.

Question 37

How long does an offeree have to request clarification on the offer (eg info about the breakdown of figures, or to see what has been offered for specific heads of damage)?

Answer 37

The offeree has 7 days to make such a request (pursuant to part 36 - CPR36.8).

Question 38

What are the ONLY two ways a part 36 offer can be revoked?

Answer 38

The only ways a part 36 offer can be revoked are either: 1) where the offeror withdraws the part 36 offer they have made by serving written notice of withdrawal; or 2) its terms are changed by the offeror serving written notice of change on the offeree.

Question 39

Can a third party debt order be granted over a debt owed by a third party outside the jurisdiction?

Answer 39

No.

Question 40

Which document is used to enforce a judgment of debt by way of taking control of goods, where the judgment is for a value of £25,000?

Answer 40

A writ of control issued by the high court.

Question 41

Does advanced notice need to be given prior to issuing an aplciation for a charging order over land?

Answer 41

No. The application can be made without giving advanced notice to the debtor or any lender who currently holds security over the land. An interim charging order will then be made.

Question 42

Does a bank need advanced notice of a judgment creditor seeing a third party debt order over the credit of the bank account?

Answer 42

No. Neither the bank or the debtor are required to be given advanced notice.

Question 43

Can a part 36 offer be made validly by email?

Answer 43

Yes.

Question 44

Can vehicles owned by a company be subject of a warrant of control (ie be seized to repay the debt)?

Answer 44

Yes as the vehicles exemption for work use does not apply where the D is a company.

Question 45

Can a charging order be granted over a foreign property?

Answer 45

Yes but the application must be made in the relevant jurisdiction and not in the English courts.

Question 46

Does a rejection of a part 36 offer revoke the offer?

Answer 46

No.

Question 47

Does a counter offer or rejection of a part 36 offer revoke the previous offer?

Answer 47

No.

Question 48

Are company cars exempt from being seized where the D is a private company?

Answer 48

No. This exemption to vehicles used for work only applies to individuals. As such company cars CAN be seized.

Question 49

Can either party appeal/challenge an attachment of earnings order?

Answer 49

Yes - either party can apply for the matter to be reconsidered by a district judge at a separate hearing.

Question 50

Explain the procedure of applying for an attachment of earnings order.

Answer 50

1) Creditor applies to county court money claims centre. 2) Court informs debtor of application, requiring them to either pay sum, or file a statement of means giving details of their income and outgoings. 3) On receipt of the form, court officer makes the order. they fix a repayment rate by applying certain guidelines. Order specifies normal deduction rate and a protected earnings rate. 4) Order is sent to parties and to the debtor's employer with instructions to deduct amount ordered from debtors pay and forward it to court. Employer can take a small fee for admin costs.

Question 51

What is the main benefit of a third party debt order?

Answer 51

Element of surprise (as debt order is not made until after the order has been made).

Question 52

What is the procedure for applying for a third party debt order?

Answer 52

1) Debtor applies to court without notice to debtor, providing details such as name and address of branch where money is held, and the account number. 2) Judge makes interim order, which has effect of freezing bank account or funds held by the third party. At this point no money is paid to the creditor but a hearing will be listed 28 days later. 3) At hearing, court considers objections and order made final (unless there is good reason not to). Requires the third party to pay the money directly to the creditor.

Question 53

Explain the procedure of enforcement for seizing goods in the High Court.

Answer 53

1) Judgment creditor makes a request along with two copies of a writ of control to the court office, and must also send a copy of the judgment; 2) Court seals the writ and returns one copy to the creditor; 3) Creditor then forwards this to High Court enforcement officer for that county where debtor resides/carries on their business. The writ is then executed.

Question 54

If a judgement of debt is obtained in the county court, where should the writ of control of goods be enforced?

Answer 54

If sum owed is less than £600 it must be isseud in the country court; If sum is more than £600 but less than £5000, the writ can be issued in either the county court or the high court. If the High Court is chosen, judgement must be transferred from the county court to the High Court. A warrant or writ of control will be issued as appropriate to the court issuing it. The enforcement agent used will be applicable to the court issuing the warrant. If the debt is for £5,000 or more, then it must be enforced in the High Court unless the proceedings involve the consumer credit act 1974. A writ of control will be issued and this has to be carried out by a High Court Enforcement Officer.

Question 55

If a judgement is obtained in the high court, where can the judgement be enforced?

Answer 55

The writ of control of goods can be issued in the high court regardless of the amount being enforced. A warrant of control will be issued and enforced by a bailiff.

Question 56

What is the taking control of goods method of enforcement?

Answer 56

Used where amount owed can be recovered by seizing debtors possessions of equivalent value. Items then sold at pubic auction.