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How to enforce a debt considers how a judgment creditor can seek to recover their money.

What Is A Judgment Creditor?

A judgment creditor is a creditor that has obtained a court order to recognise their debt.

Once a judgment creditor has obtained a court order if they do not receive their money, typically within 14 days they can take enforcement action to recover their debt.

There are various ways that a judgment creditor can look to enforce their debt. One of the most common ways to do that is to issue a Writ of Control.

Writs Of Control – How To Enforce A Debt

Once a judgment has been given and a court order sealed, if the matter is being enforced in the High Court, the judgment creditor may obtain a Writ of Control from the court.

Sometimes creditors obtain county court judgments and there is then a process by which if the creditor so wishes, the matter can be enforced in the High Court. Either way, the net result is the sealing of a Writ of Control.

The position therefore is that whereas by the judgment, the court has ordered the debtor to pay a sum of money, by the Writ her Majesty through her judges commands the enforcement officer to take control of the goods of the debtor so as to enforce the court order.

In fact, legally the High Court Enforcement Officer (“HCEO”) (unless he or she is also a certificated enforcement agent) must make use of a certificated enforcement agent to actually carry out the enforcement steps (s.63 TCEA 2007). Those agents are specialists in the process of enforcement steps ‘on the ground’, acting on instruction from the HCEO.

Avoiding Removal And Sale Of Goods To Satisfy A Judgment

Rather than the debtor be bankrupted it is possible under our legal system for physical enforcement to be avoided in at least two ways. The first is simply for the debtor to pay the debt in full before the first enforcement stage is entered into, in other words once they have been initially contacted by the HCEOs at what is known as the ‘Compliance Stage’. The second is to enter into an agreement to pay the debt by instalments, by way of a payment arrangement as long as the creditor agrees.

The sealing of the Writ of control triggers a statutory process set out in the Tribunals, Courts and Enforcement Act 2007 and regulations already referred to. For the purposes of fees charged by the HCEOs, the process is described in ‘stages’ but it is important to note that the stages so-called are purely related to fees.

Compliance stage – How To Enforce A Debt

This stage for fee purposes relates to all stages after the Writ has been sealed, up to the point when the first enforcement steps are taken in Enforcement stage 1. It is common ground that at this stage a Notice of Enforcement is served on the judgment debtor.

It warns the debtor that if they do not pay the judgment debt or agree a payment arrangement by the specified date, an enforcement agent ‘will visit’ the debtor and may seize belongings. It says “this is called ‘taking control’. These belongings may then be sold to pay the money you own”. It then warns that those actions will increase the costs payable by the debtor.

The debtor’s goods may not be taken into control pursuant to the writ unless the notice of enforcement has been given, and at least 7 days’ notice has to be given. The Agent may not take control after 12 months from the date of the notice of enforcement or, where an arrangement is entered into between the enforcement agent and the debtor for payment of the sum outstanding by instalments, after 12 months.

The ‘compliance stage’ triggers a fee of £75 when the Notice of Enforcement is served. The ‘First Enforcement stage’ triggers a fee of £190 PLUS 7.5% of the value of the judgment being enforced if it is over £1000. It includes (if appropriate) entry into a Controlled Goods Agreement (“CGA”). If a CGA (see below) is not entered into and/or it is breached and later enforcement steps are needed then the fees rise.

Enforcement Stage 1 – How To Enforce A Debt

If the debtor does not pay the debt in full, or does not enter into an unsecured agreement to pay in instalments (and/or the creditor will not agree to that), then the first enforcement stage begins.

An enforcement agent may take control of goods only if they are
on premises that he has power to enter and may do so as follows:

  • secure the goods on the premises on which he finds them
  • remove them and secure them elsewhere
  • enter into a controlled goods agreement with the debtor

Controlled Goods Agreement – How To Enforce A Debt

A controlled goods agreement (“CGA”) is an agreement under which the debtor:

  • is permitted to retain custody of the goods,
  • acknowledges that the enforcement agent is taking control of them, and
  • agrees not to remove or dispose of them, nor to permit anyone else to, before the debt is paid.

The information which must appear in the CGA document, includes a list of the goods taken under control. Notably unless the signatory is the debtor, (eg in the case of a third party authorised to sign on behalf of the debtor) the enforcement agent must in addition to providing a copy to the signatory, leave a copy ‘in a conspicuous place on the relevant premises, where the enforcement agent has taken control of the goods on such premises’.

An enforcement agent may enter into a controlled goods agreement within the meaning of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 with a debtor whether or not the enforcement agent has physically entered the premises on which the goods are located.

What Next? How We Can Help You

If you have any concerns or queries about How To Enforce A Debt then Contact Us as soon as possible. Our expertise is just a click away and the sooner you call us the sooner we can help. Usually, the earlier problems are addressed the more options you may have available.

 

Disclaimer: this page ‘How To Enforce A Debt’ is not legal advice and not to be treated as such. No liability is accepted for any reliance placed upon this page ‘How To Enforce A Debt’. You should take independent professional advice on the specific facts of your case as to the point of this page ‘How To Enforce A Debt’.