How to Enforce a Judgment Debt

This note relates only to money Judgments, rather than a non-money Judgment, such as an Injunction or Order for specific performance.

It also does not cover any type of insolvency proceedings, such as winding up petitions.

After spending considerable time and costs obtaining a money Judgment against a third party you have probably had enough of lawyers and Court rooms. Normally the losing party (the “Judgment Debtor”) is required to pay a Judgment Debt within 14 days of the Order.

– But what happens if they do not pay?

– What recourse does the winning party (the “Judgment Creditor”) have?

The below is not an exhausted list but covers some of the main options open to Judgment Creditors.

Enforcement against goods

Instructing bailiffs or High Court Enforcement Officers (HCEOs) can often be a relatively quick and cheap method of enforcement. It does not require a decision from the Court, although there are some procedural hurdles to overcome first. The process is to obtain a Court document (in the High Court a writ of control, and in the County Court a warrant of control) and then instruct bailiffs or HCEOS to execute the relevant writ or warrant.

The bailiff will seize the goods for a period of 14 days (to give the Judgment Debtor time to pay the Judgment Debt). If no payment is made then the goods will be sold, usually in a public auction.

Execution of a writ or warrant can be obtained against most personal property save for Exempt Goods, normally items a Judgment Debtor uses for a living (such as tools used for employment, or medical items).

Third Party Debt Order

A Third Party Debt Order (TPDO) is effectively a form of an injunction in that freezes monies belonging to the Judgment Debtor, which is in the hands of the third party. The classic example is monies held in a Judgment Debtor’s bank account.

It is 2-stage process: the first stage it to obtain an interim TPDO on an ex parte basis (i.e., without the other party’s knowledge). This freezes the funds in the Judgment Debtor’s bank account up to the value of the Judgment Debt. The Court will then list a hearing to determine whether to grant a Final TPDO. The Judgment Debtor would have the opportunity to make representations at the hearing. If the TPDO is made final the third party must then release the funds to the Judgment Creditor.

Attachments of Earnings

If the Judgment Debtor does not have sufficient assets to satisfy a Judgment Debt, a Judgment Creditor may consider applying for an Attachments of Earnings Order (“AEO”). An AEO means that a proportion of a Judgment Debtor’s earnings is made directly to the Judgment Creditor until the Judgment Debt is satisfied in full. “Earnings” can mean a salary or wage, part of the pension, bonuses, or dividends. However, a Judgment Creditor cannot obtain an AEO if the Judgment Debtor is unemployed, self-employed, a corporate or partnership judgment debtor, in the armed forces or a merchant seaman.

Charging Orders and Orders for Sale

A charging order is a relatively quick and simple way of securing a charge over a Judgment Debtor’s property, assets, or securities. When a Judgment Debtor sells, for example, a property encumbered by a charging order, the Judgment Debt, or part thereof is paid to the Judgment Creditor from the proceeds of sale, providing there is sufficient equity in the property.

The process can be slow and, by itself, does not realise any funds to satisfy the Judgment Debt. It merely provides security for the Judgment Debt. Therefore, unless the Judgment Debtor sells the property, the Judgment Creditor will not get paid.

However, it is open for the Judgment Creditor, with the benefit of a charging order over the Judgment Debtor’s property, to apply for an order for sale, whereby the Court will order the property to be sold so the Judgment Creditor can enforce its charge over the property. Another benefit of a charging order is that interest on the Judgment Debt will accrue until the debt is paid off (at a current rate of 8% per annum).

Gherson’s litigation team has considerable experience in enforcing Judgment Debts. If you have a Judgment Debt you need enforcing please do not hesitate to contact us, send us an e-mail, or alternatively, follow us on Twitter or LinkedIn to stay up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2022

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