Taking the matter to court (England and Wales)

Taking the matter to court (England and Wales)

Claiming through the courts

A creditor (the person you owe money to) might consider using the Court Service's 'Money Claim Online' service. With this service a creditor can issue certain county court claims under £100,000 electronically via the Court Service website. Claims started with Money Claim Online are issued by the Northampton County Court and continue in that court unless transferred to another court. A creditor must make sure that their claim is suitable and that they can comply with the requirements set out in the user guide, available on the Money Claim Online website.

To make a claim in court, the creditor 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 you defend the claim, the case might be transferred by that court to the creditor's or your local county court.

To have the claim form issued, the creditor must send 2 copies of the completed N1 claim form to the court and keep an extra one for their own records. The court fee must be enclosed. The court fee increases as the value of the money claim rises. The latest court fee is available from leaflet EX050. If the creditor's 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 inform both you and the creditor where the hearing will take place.

Enforcement of judgments

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

Time to pay

You should usually be given at least 14 days from the date of the judgment 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. Whether payment under a judgment is overdue could be affected by whether:

  • you are challenging the judgment; or
  • the judgment specifies the judgment debt to be paid in instalments.

Third party debt orders

A third party debt order forces a person that owes you a debt to pay that debt (to a maximum of the judgment debt) to the judgment creditor instead of to you. For example, a bank can in this way be forced to pay money from your 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 your employer is required to deduct a proportion of money from your pay and pay it into court.

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

An AEO can only be granted by the County Court and can be made for a High Court or county court civil judgment debt of £50 or more where you are in arrears with at least one payment.

You have to be employed for an AEO to be possible. However, even where you are employed, an AEO is not always possible; for example, an AEO is not possible if you are 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 it 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 your 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 your 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 your (the employee's) income on a weekly or monthly basis. The district judge will, however, at the same time determine the minimum amount that you must retain from your 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

With a charging order, a charge can be placed on a property you own 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 secured creditors, before any of the proceeds are given to you.

Unlike the other enforcement options discussed here the judgment creditor does not get any immediate payment for the judgment debt by means of a charging order. Payment 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 believes that you do not have the means to pay the judgment debt, or if you neglect to pay, the judgment creditor may ask the court to issue (in the High Court) a writ of control or (in the county court) a warrant of control. This authorises an enforcement agent (collectively referring to an enforcement officer (High Court) and bailiff (county court)) to seize and sell your goods and to pay the proceeds to the judgment creditor to settle or reduce the judgement debt.

A judgment creditor can enforce both a High Court and county court judgment in the High Court. However, the latter is only possible if the county court judgment is not for 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 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 you through the sale of your 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 officers 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 the judgment creditor has 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, the creditor could apply for your bankruptcy. 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 you are unable to pay your 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.

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

  • which of your 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 you that enforcement by taking control of goods is authorised.

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

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

  • Unless the court extends this period, the enforcement agent must take control of your goods within 12 months of giving you 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 on 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 your home or seize your 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, you may complain to the Financial Ombudsman Service. Physical threats should be reported to the police.

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