Step 15: Enforcing your judgment
Only Half the Battle
Having won your small claim you now have to consider how you are going to enforce your judgment i.e. recover the money awarded to you from your opponent. Some Defendants of course pay up without too much complaint, but others can be more difficult and it may be necessary for you to go back to Court again to force them to do so. Enforcing a debt can be a frustrating business. Thankfully we no longer live in a Dickensian world of debtors prisons but many small claim winners are highly critical of our longwinded and often ineffective system of debt enforcement. Moreover interest does not run on County Court debts of £5000 or less. So, forewarned, here is the DYJ's guide to method of enforcement:
1. Orders to obtain information (previously known as oral examinations)
If you need to find out more about the judgment debtors financial position then you can ask the Court to carry out an "oral examination". This procedure has nothing to do with dentistry! It actually involves the debtor (including a limited company) going before the Court to answer questions about their financial affairs.
In March 2002 the Lord Chancellor streamlined the existing procedure and hopefully questioning of the debtor should now be achieved in a much shorter time.
Many debtors are economic with the truth. but refusal to comply with this process can land the debtor in prison. The exercise is therefore generally worth doing if only for the hassle it can cause the debtors.
2. Warrant of Execution
If you know that the debtor is the owner of valuable goods (perhaps as the result of an oral examination) then consider sending in the County Court bailiffs. This procedure is commenced by applying for a "Warrant of Execution" which gives the bailiffs the power to seize and sell the debtors belongings. It is however important to remember that the goods must be owned by the debtor, so you cannot enforce against cars or other things which have been bought on hire purchase.
3. Attachment of Earnings
If the debtor is employed then you can get an order which requires his employer to deduct a sum each week or month from his wages. The amount deducted will be set by the Court and if the debtor is not a high earner it might take a long time before the debt is fully repaid.
4. Third Party Debt Orders (previously known as Garnishee Orders)
If you know the debtor himself is owed money then you can apply to the Court for a "garnishee" order which requires that money to be paid direct to you. The application should be made to the Court direct without notifying the debtor so as to take them by surprise.
Garnishee orders, or as they are now known "Third party debt orders", were also part of the Lord Chancellor's reforms in March 2002. Under the new procedure a bank or building society where it is thought the debtor has funds will be served by fax immediately after the Order is made. They will then have to search for all accounts held in the debtor's sole name. If they find anything they will then tell the Court and Creditor if there is enough there to pay the debts.
Potentially, all of the debtor's accounts may be frozen by an interim third party debt order.
5. Charging Order
You may know from your order to obtain information or your own knowledge that the debtor owns a home or some land. If so then a very effective method of enforcing your judgment will be to apply for a "charging order" over that property. The order can then be registered so that the debtor cannot sell the property without first clearing the debt. The obvious weakness of the method however is that if the debtor has no immediate plans to sell the property then you could be in for a long wait for your money! If the judment is for a significant sum then you may be able to persuade the Court to grant you an "order for sale".
6. Bankruptcy
Although this is not a true method of enforcement, it is open to anyone who is owed £750 or more to make the debtor bankrupt. You should start by serving a statutory demand and if the debt still remains unpaid then a bankruptcy petition can be issued. However the procedure is not cheap and as an unsecured creditor you may find that there are others ahead of you in the queue when it comes to sharing out the debtors assets.
7. Company Insolvency
Similar to the bankruptcy process for individuals; you can apply to wind up a limited company which owes you money. Again, take care, the procedure is expensive and offers no guarantee of payment.
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