Taking the matter to court

Taking the matter to court

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Claiming through the courts

You might consider using the Court Service's Money Claim Online service. This service allows claimants to issue certain types of county court claims under £100,000 by requesting the issue of a claim form electronically via the Court Service website. Claims started by using Money Claim Online are issued by the Northampton County Court and proceed in that court unless they are transferred to another court. Before you use the service you have to make sure that your claim is suitable and that you can comply with all the requirements set out in the user guide.

To make a claim in court, you will need to complete claim form N1. All money claims must be issued at the County Court Money Claims Centre, PO Box 527, Salford, Greater Manchester, M5 0BY. If the debtor defends the claim the case can in certain instances be transferred by this court to your local county court or that of the defendant.

To have the claim form issued, send 2 copies of the completed N1 claim form to the court and keep an extra one for your own records. Also include the court fee. The court fee increases as the value of the money claim rises. The latest court fee is available from leaflet EX050. If your income is low the fee can be reduced or waived.

The court will allocate the case to the correct track. If the claim is for an amount up to £10,000 it will generally be allocated to the small claims track which has a less formal, faster approach to resolving disputes. Claims over £10,000 will usually be allocated either to the fast track or the multi-track.

If the matter is not settled and a hearing needs to take place the court will provide you with further documents to complete and inform you where the hearing will take place.

Methods of enforcing judgements

When a final judgement is made in a matter before the court, the successful party (the 'judgment creditor') may apply to the court for an oral examination of the debtor's (the 'judgment debtor') means. The replies of the judgment debtor given at such an examination would enable the judgment creditor to select the best method of enforcing the court order. The various methods of enforcement are discussed below.

Time to pay

A judgment debtor should generally, with some exceptions, be given at least 14 days from the date of the judgment (unless the judgment specifies a different date for payment) to make payment of the judgment debt before enforcement proceedings are started.

Payment under a judgment must be overdue before enforcement proceedings, other than charging orders, can be applied for. This means that the judgment debtor doesn't pay the judgment debt or an instalment of it due under a judgment within the time allowed.

Whether payment under a judgment is overdue could be affected by, amongst other things:

  • whether the judgement debtor is challenging the judgment; or
  • whether the judgment specifies the judgment debt to be paid in instalments.

It is also best to ensure that the judgment was served on the judgment debtor as this might not only become relevant for enforcement, but if the judgment debtor is given a copy of the judgment it might encourage them to take steps to pay the judgment debt or if they intend to appeal to do so sooner rather than later.

Third party debt orders

Third party debt orders replaced what was previously known as garnishee orders. A third party debt order forces a person that owes a debt to the judgment debtor to pay that debt (to a maximum of the judgment debt) to the judgment creditor instead of to the judgment debtor. For example, a bank can in this way be forced to pay money from the judgment debtor's bank account to the judgment creditor to settle as much of the judgment debt as there is money available in the bank account.

Attachment of earnings

When an attachment of earnings order (AEO) is made the employer of the judgment debtor is required to deduct a proportion of money from the pay of the judgment debtor and pay it into court.

The benefit of this order is that the creditor no longer has to rely on the debtor to make the required regular payments as it places this duty on the employer. The employer will make deductions directly from the salary or wages of the employee and pay it into court.

An AEO can only be granted by the county court and can be made in respect of any High Court or county court civil judgment debt of £50 or more where the debtor is in arrears with at least one payment.

The judgment debtor has to be employed for an AEO to be possible. However, even where the judgement debtor is employed, an AEO is not always possible; for example, an AEO is not possible if the judgment debtor is in the armed forces, self-employed or a merchant seaman.

Earnings for purposes of the AEO will include income, such as wages, salaries, bonuses, overtime, pensions, annuities and statutory sick pay, but doesn't include tax credits, armed forces pay, self-employed-earnings, disability pensions, benefit payments and old age state pensions.

When an application is made by a creditor for an AEO the court has a duty to consider all the debtor's outstanding debts. If these debts are less than £5,000 the court has a duty to consider whether a county court administration order would not be a better way of dealing with the debtor's debts instead of granting an AEO for the benefit of only one creditor.

If the district judge does make an AEO they will specify the amount that should be deducted from the employee's income on a weekly or monthly basis. The district judge will, however, at the same time determine the minimum amount that the debtor must retain from their income before any deductions can be made for purposes of satisfying the AEO. This minimum amount is referred to as the protected earnings rate.

Charging order

In this case a charge can be placed on a property, owned by the judgment debtor either solely or jointly with someone else, so that when the property is sold the judgment debt will have to be paid off first, after any prior creditors, before any of the proceeds are given to the judgment debtor.

Unlike the other enforcement options discussed here the judgment creditor does not get any immediate payment in respect of the judgment debt by means of a charging order. Therefore the payment of instalments under a judgment doesn't need to be overdue before a charging order can be applied for. However, if the judgment creditor wants to sell the property over which the charging order is held, an application will have to be made to court and that wouldn't be granted if payments were not overdue.

Warrants and writs of control

If the judgment creditor considers that a judgment debtor does not have the means to make payment of the judgment debt, or if they neglect to pay, then the judgment creditor may ask the court to issue a writ of control (High Court) or a warrant of control (county court), which authorises an enforcement agent (collectively referring to an enforcement officer (High Court) and bailiff (county court)) to seize and sell goods belonging to the judgment debtor and to pay the proceeds to the judgment creditor in satisfaction or in reduction of the judgement debt.

A judgment creditor can not only enforce a High Court judgment in the High Court, but can also enforce a county court judgment through the High Court. However, the latter is only possible if that county court judgment is not in respect of a debt covered by the Consumer Credit Act 1974 (CCA) and it is for a value of at least £600. To enforce a county court judgment through the High Court it will first need to be transferred to the High Court for the issue of a writ of control. The writ of control authorises the High Court enforcement officer to recover the judgment debt and costs from the debtor, if need be, through the sale of the debtor's goods.

Because they are not covered by the CCA it is possible that county court judgment debts, of £600 or more, for things like school fees, water charges and funeral charges could be enforced by using the enforcement offices of the High Court to execute a writ of control, (instead of the county court bailiffs to execute a warrant of control).

Only the county court may deal with debt claims covered by the Consumer Credit Act no matter the value of that debt and it may also deal with all other debts up to £5,000 with no lower limit. A judgment creditor with a claim covered by the CCA or with a judgment valued below £600 will be limited to getting a warrant of control issued by a county court for enforcement by county court bailiffs.

Insolvency procedures

If you have not been successful in enforcing the judgment debt in any of the ways described above and the amount of the judgment debt meets the insolvency level, you could apply for the debtor's bankruptcy (if an individual) or liquidation (if a company). In this case there is no need for a statutory demand as the unsatisfied execution process on the judgment debt will be accepted as proof that the judgment debtor is unable to pay their debts.

Enforcement agents

The term 'Enforcement agent' is a catch all phrase used to refer to bailiffs, enforcement officers and certificated enforcement agents.

County Court bailiffs operate under the authority of warrants of control and are employed by HM courts and Tribunal Service. High Court enforcement officers are appointed by the Lord Chancellor and operate under writs of control. Certificated enforcement agents on the other hand hold certificates granted by the County Court and may enforce any debts other than a County or High Court order. They may, for example, enforce debts relating to council tax, domestic rates, road traffic penalties, Magistrates' Court fines and commercial rent arrears recovery.

If your creditor (the person you owe money to) made a claim against you (the debtor) for payment of an outstanding debt through the courts and the court made an order that you must repay the judgment debt and you still don't do so, the judgment creditor can ask the court office to grant a writ or warrant of control.

A writ or warrant of control give respectively to a High Court enforcement officer or County Court bailiff the power to take control of your goods and to sell them at auction. The net proceeds from the sale, after deducting the enforcement agent's fees and expenses and other costs of sale (e.g. auction costs) will be paid to the creditor to settle or reduce the debt. If the net proceeds are more than is required to pay the full debt owed to the creditor and the costs of enforcement, the surplus will be paid to the debtor.

Enforcement agents are however bound to perform their duties in accordance with strict regulations and procedural rules. These rules determine amongst other things:

  • which of the debtor's goods can't be taken control of and sold;
  • when and how the enforcement agent may gain entry to the premises where the goods are; and
  • how many days' notice should be given to the debtor that enforcement by taking control of goods is authorised.

A debtor will be given an opportunity to pay the outstanding debt before the enforcement agent takes control of and sells the debtor's goods. It may be possible for the debtor to agree an arrangement to pay the debt by instalments.

The enforcement process after a creditor has obtained a money judgment against a debtor will typically be as follows:

  • Unless the money judgement stipulates that it is to be paid by instalments or by a specific date the debtor will be given 14 days to make payment. It would therefore be advisable to serve the debtor with the judgment so that they can be prompted to comply with it. If the judgment debtor does not successfully apply for a setting aside of the judgment or a stay of execution and doesn't make payment of the judgment debt as required, the judgment creditor can apply to court for a writ or warrant of control.
  • Once issued the writ or warrant of control will be provided to the bailiff or enforcement officer for execution.
  • There are 3 stages in the process of executing the writ or warrant of control:
    • The debtor needs to be given at least 7 days' notice of the intended execution of the writ or warrant of control. This notice must contain enough information so that the debtor can identify the debt. It must also state the full amount due including all costs and interest and any further amounts that may become payable if the debt remains unpaid. It should also inform the debtor by when payment should be made if an execution of the writ or warrant of control is to be avoided.
    • Unless the court extends this period, the enforcement agent must take control of the goods within 12 months of giving the debtor notice of their intention to do so.
    • The enforcement agent must comply with rules governing when and how they may enter premises to take control of goods. They will then take control either by securing the goods on the premises where they found them or by removing them to a secure place. These goods will then be sold at an auction sale and the proceeds used to pay the costs and as much of the debt as possible.

Debt collectors

Creditors may use a debt collection agency to recover a debt.

Debt collectors don't have the same powers as enforcement agents. They can't enter a debtor's home or seize their possessions.

Creditors and debt collectors must follow the Financial Conduct Authority's conduct rules set out in the consumer credit sourcebook. If a collector does not follow those rules, a debtor may complain to the Financial Ombudsman Service. Physical threats should be reported to the police.