So you have a Court Judgment in your favour – How do you get what you are owed?

Getting a Court Order or Judgment in your favour is great step in getting paid what you are owed. But unfortunately, it often doesn’t end there.

What if the debtor does not pay on time? What if the debtor says that they don’t have the means/ability to pay?

The Court will not chase or enforce the debt for you automatically. So you should know what what your options are and how to force payment if you need to.

Practical steps to take before enforcing any judgment

Whilst every case is different, there are some common steps that you can take to ensure you are putting yourself in the best position to recover payments you are owed.

• Ensure that the court orders have been served on the debtor.

• Discuss the debt with the debtor. Those discussions may help you understand if the debtor intends to pay, or if they can’t/won’t pay, it may help you explore settlement proposals (e.g. offers to pay in instalments) or provide information which will help you in enforcing the judgment.

• Investigate the debtor's position and assets. It is sensible to know how you could enforce payment against a debtor as early as possible, but to do so again before starting any enforcement action, is also sensible.

• Check that the deadline for making payment has passed. The Court will not allow you to enforce a debt which is not yet due.

How to enforce the judgment

1. High Court Enforcement Officers

High Court Enforcement Officers (HCEOs) are empowered by the Court to attend a debtor’s property and secure payment. If payment cannot be obtained or agreed, they are able to take a debtor’s physical goods (e.g. vehicle, jewellery, equipment, stock, etc) and auction them off for sale.

Pros	Cons
Simple, low-cost and quick procedure to instruct HCEOs.	Requires the debtor to have personal items of value.
HCEO fees will usually be taken directly from the Debtor. If no recovery is made, they do not normally charge you their fees.	Goods sold at auction often achieve below the market rate. The full value of seized goods are therefore usually not obtained.
Once HCEOs are instructed, there is relatively little administration for you to do. They will deal with the seizure and sale of any goods, and then pay you a proportion of any amount recovered.	There are a number of specific types of goods that HCEOs cannot seize. E.g. items essential for domestic needs, tools used in the debtor’s profession, etc.

2. Charging Orders

A charging order is a court order which allows your judgment to be registered against a property/land owned by the debtor. The debtor would then not be able to sell the property without also settling the debt.

Pros	Cons
The debt is secured against a physical asset, which should retain its value. As a property is often an individual’s highest value asset, it can be a very effective tool for securing the debt owed to you.	This is a long-term measure to secure the debt that you are owed. It does not usually compel the debtor to sell the property, which may leave the debt unpaid for a significant period of time.
The process for getting a charging order is relatively inexpensive and quick.	Requires the debtor to own a property or land to be an available method.
In certain circumstances, you may even be able to force the debtor to sell the Property to settle the debt.	Any charge placed on the property will usually rank below other pre-existing charges and priority debts (e.g. conveyancer’s costs). So, if there is not enough equity in the property, you may not get paid out of this security.

​3. Third Party Debt Orders

This is an order which allows you to freeze and then be paid from money held in a debtor’s bank account. The order can also be sought from third parties who are holding money owed to the debtor.

Pros	Cons
If successful, achieves payment within a short timescale.	You will need prior knowledge of Debtor’s personal accounts and the sums held in those accounts, which can be difficult to obtain in sufficient detail.
Allows you to obtain payment in the form of cash, to immediately reduce the debt.	There is the risk that the debtor withdraws their funds before you make your application to court.

4. Attachment of Earnings Orders

This is an order you can obtain from the Court which, when sent to your debtor’s employer, requires them to pay money out of the debtor’s wages/salary, to you directly.

Pros	Cons
Where a debtor has no substantial savings or assets, this can help you reduce the debt over time.	Only available as a method if the debtor is employed, is taxed on a PAYE basis, or receiving an occupational pension.
Most debtors usually have some form of wages or salary. Therefore, this is a method potentially available more often.	If a debtor changes jobs or has inconsistent working hours (e.g. is on a zero-hour contract), the usefulness of this method is diminished.
A debtor may prefer to voluntarily settle the debt than have their reputation at work affected by their employer being forced to comply with a formal court order.	As this comes out of the wages/salary, it is not well suited for large debts, as it will often take a long period of time to clear the debt.

5. Bankruptcy/Liquidation

If the debtor is an individual they may be made bankruptcy, or if they are a company they may be wound up. An official (e.g. Official Receiver, Liquidator or Trustee in Bankruptcy) would be appointed to gather the debtor’s assets and settle any liabilities including the debt owed to you.

Pros	Cons
​A court judgment in your favour can help to justify a bankruptcy/winding up petition, but it is not an essential requirement. So it can be done at a much earlier stage.	Can cost a relatively substantial fee to commence the procedure and is only available as an option if the debt is over a minimum amount.
Management of the liquidation/bankruptcy is outsourced to another party. You do not need to deal with the practical aspects of administering the process.	The process can be long and may only yield results if the debtor’s assets are more than their liabilities.
The threat of bankruptcy is severe and has many additional consequences (e.g. damage to credit rating, ability to hold a director role in a company, etc). This can often make a debtor more willing to pay or reach an agreement, to avoid those consequences.	Any debts being paid out the debtor's assets will be paid in a specific order, with secured creditors and other specific debts (e.g. the fees of bankruptcy or liquidation) being paid first.

How we can help

Whether you are facing a enforcement action, or need help pursuing a debt or claim, our solicitors are ready to advise on a wide array of legal disputes. Contact us now for a free no-obligation consultation to see how we can help.

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