The tricks for turning debtors’ assets into your cash.
As many business owners are discovering, just because you’ve got a CCJ, it doesn’t mean to say you’ll get paid.
Often, the best hope of recovery of money owed is to go after a debtor’s assets.
However, as James Martin of Blacks Solicitors explains, success depends upon what assets a debtor has - and are available to recover.
Likewise, using the appropriate enforcement method can avoid expensive unsuccessful attempts at obtaining payment.
Instructing an enquiry agent is one way to establish assets.
Subject to the extent of the investigation needed, this will usually cost in the region of £100 plus VAT. However, it can be money well spent if it leads to recovery of the judgment debt.
The report will usually state if the debtor owns any property, has assets such as vehicles, and could also indicate if the debtor is employed.
This information can then be used to make informed decisions regarding which method of enforcement will achieve the best outcome.
Enquiry agents
In addition to instructing an enquiry agent, there is also provision within the Civil Procedure Rules which allows a creditor to compel a debtor to attend Court for questioning.
An application is initially made to the Court, which then produces an Order detailing the time and place when the debtor must attend Court. That Order must then be personally served on the debtor.
Once served, the debtor is then compelled to complete a form detailing their financial position and to attend Court to give answers under oath to a Court Officer (or a Judge). If a debtor does not attend, then a Judge could make an order to send the debtor to prison for contempt of court.
While an order of this type can be advantageous in certain circumstances, it can also prove costly as personal service can be expensive.
In addition, a debtor could ask the judgment creditor to pay for his/her reasonable travel expenses to get to Court. Consequently, a creditor should carefully consider their options for obtaining information.
Locating a debtor
Problems can also arise if debtors move or take steps to avoid paying their debts. In such circumstances, unless the debtor owns their property or are employed, enforcing a judgment will be very difficult without locating them.
Luckily, there are companies that provide services to locate debtors. Some even operate on a no trace, no fee basis.
Sometimes, it’s impossible to locate a debtor who does not want to be found. In those circumstances, it can be beneficial to wait six months and instruct further enquiry agents.
This allows the debtor time to re-locate and get comfortable in their new surroundings. Waiting for long periods of time can, however, cause issues with enforcement.
Limitation issues
Generally speaking, there are no limitation periods that relate to the enforcement of judgments - save that permission of the Court is required to issue a writ or warrant of control, and other writs of execution, if the relevant judgment is more than six years old.
This restriction does not apply to other methods of enforcement in respect of judgments over six years old (for example applying for an order for sale to enforce a charging order).
However, any delay may be taken into consideration by the Court when determining whether to grant such an Order.
The court can, however, limit the amount of interest that can be claimed.
Conclusion
Unfortunately, no method of enforcement can guarantee success. However, there are ways in which to reduce the risk of enforcement failing and throwing good money after bad.
Creditors should, therefore, carefully consider if additional information is needed prior to commencing enforcement action.
If you would like to speak to a member of Blacks Solicitors’ Dispute Resolution team about any enforcement issues, please email or call 0113 207 0000.
- See ETN’s exclusive list of equestrian related CCJs in every issue.
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