What could happen after a county court judgment is issued

Posted by George Coburn in Dealing with Debt on 16 January 2017 - George is a Credit Analyst at checkmyfile

Once a court judgment has been issued but the individual still refuses to pay the outstanding debt or come up with an agreement to clear it, the claimant has a number of legal remedies available to them through the court systems.

A county court judgment (CCJ) itself is simply an acknowledgement from the courts that the debt is owed to the claimant. From the debtor’s perspective, the presence of the judgment itself on their credit file will make obtaining even basic credit difficult but from a debt collection view, the claimant can escalate the judgment to help the enforcement of the debt.

The claimant can apply for a Warrant of Control (through County Court) or a Writ of Control (by escalating to the High Court) and these allow the claimant to take control of goods from the debtor. With the risk of losing possession of their belongings, the threat of the removal of goods increases the chance of payment.

Since Writs of Control are issued at a higher level, a High Court Enforcement Office (HCEO) who enforces the writ has greater powers than someone working for the county court and this type of enforcement has been popularised by TV programs like ‘Can’t Pay, We’ll Take It Away’ and ‘The Sheriffs Are Coming’.

Where the debtor owns assets such as a property or shares, the claimant can apply for a charging order against them. The asset then cannot be sold without the claimant being notified and when it does get sold, the claimant gets paid out of the proceeds. If someone continues to refuse to pay the outstanding debt, the claimant can then apply to have the asset sold, which means the person runs the risk of losing their home over it.

If the debtor has an asset belonging to the claimant, for instance a leased car, the claimant can apply through the courts to repossess it. Following this method, a claimant can also state they’d accept a particular asset from the debtor in order to clear the debt.

Although quite a costly method of recovery, in tenancy agreements, if the tenant has stopped paying the landlord, they can apply for a receiver to collect payments on their behalf. Since a third party gets employed to collect, this method results in the claimant receiving less than they would normally because the receiver would take a percentage of what is recovered.

As long as the debtor isn’t self-employed, the claimant can apply for an attachment of earnings order against the individual and this would result in a percentage being deducted each month from their wages by their employer and paid to the claimant. There will be a certain percentage of someone’s income known as protected earnings that is safe from the order, but the threat or embarrassment of letting your employer know of the pending order is often sufficient for the debtor to pay the claimant.

Often considered a last resort, where all else fails, the claimant could either force the debtor into insolvency or they may actively enter one if they cannot pay how much is owed. There are three main types of insolvency in England; Bankruptcy, Individual Voluntary Agreement (IVA) and Debt Relief Orders (DRO).

Each will have its own criteria and some benefit the claimant more than others. For instance, with a bankruptcy, a consumer’s assets will be liquidated and split between their creditors whereas with an IVA, the debtor agrees to pay a percentage owed to creditors. Since the payments are agreed by the debtor, they are usually able to keep their property as not all of their assets are sold.

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