Collections via the county court
If you decide to pursue a claim through the county court we are able to issue proceedings on your behalf. If your claim is successful, you will obtain a county court judgment requiring the debtor to make payment to you. In such cases the person who owes you money is referred to as the judgment debtor; you are referred to as the judgment creditor.
If the judgment remains unpaid, we are able to advise you in relation to the variety of methods available to enforce it, including the following…
Warrants of execution
If a judgment creditor issues a warrant of execution the county court bailiff will visit the defendant. The bailiff will either collect the money owed or seize goods which can then be sold to satisfy the judgment debt.
County courts cannot enforce judgments in this way if the debt owed is more than £5,000 (unless it arises out of the Consumer Credit Act agreement). If the debt exceeds £5,000 enforcement by warrant has to be via the more complicated and expensive High Court procedure.
The bailiffs cannot seize essential household goods or a defendant’s ‘tools of trade’.
Third party debt orders
A third party debt order is usually made to stop the defendant taking money out of the business bank account. The money you are owed is paid to you from the account. A third party debt order can also be sent to anyone who owes the defendant money.
The organisation or person that is holding the money is referred to as the third party. A third party debt order will prevent the defendant having access to the money until the court makes a decision about whether or not the money should be paid to you.
The money held by the third party must be held solely for the debtor. You cannot, for example, apply for a third party debt order against a joint bank account unless the judgment debt is owed by all the account holders.
This is an order of the court placing a charge on the judgment debtor's property, such as a house or a piece of land. The charge will be the amount you are owed. The charging order will not normally get you your money immediately, but it may safeguard your money for the future. If the judgment debtor owns stocks or shares or has a fund or money in court, the court can also put a charge on these in much the same way as on property.
This can be done whether the defendant owns the property in their name or with someone else. The effect of a charge is that the debtor will not be able to sell or re-mortgage the property without paying the judgment creditor.
Once a charge is in place, an application can be made for an order forcing the defendant to sell the property.
Order to obtain information
Whist not a method of enforcement, the company’s financial means are subject to an examination by an Officer of the County Court. This process will give you more information about the debtor company and how best to enforce any judgment.
In some cases, where the debt exceeds £750, insolvency proceedings may be more effective than county court proceedings in recovering the money which is owed to your business.
Our extensive knowledge and experience of insolvency procedures and the relevant legislation allows us to advise you as to the best possible use of the insolvency process to maximise your chances of recovery and complete all the necessary forms on your behalf.
A statutory demand is a formal legal document requiring a debtor to pay off an outstanding debt either by instalments or a lump sum or to secure it against a property. If the debtor does not comply with the demand within 21 days, the creditor may commence winding up proceedings.
However, in the case of a debtor company a creditor may rely upon “other evidence of an inability to pay debts” as being grounds for the issue of a winding up petition and therefore the formal serving or a statutory demand may not be needed.
In the right circumstances the presentation of a winding up petition can be extremely effective and result in payment quicker than in any other debt recovery method.
We are able to offer a comprehensive insolvency service including:
- Drafting and presenting the winding petition
- Serving petitions
- Advertising petitions
- Arranging representation at hearings
- Appointment of an Insolvency Practitioner
However, the presentation of a winding up petition can sometimes be counterproductive and may lead to the actual winding-up of the company, even if the debtor is able to pay, which is not necessarily the best or desired result.
It is vitally important that you take advice beforehand. If a petition is issued against a debtor company and a winding up order is made, the estate of the debtor company is distributed to all its creditors. However, if the company has no assets it can often be the case there will be nothing left for the unsecured creditors.
Further, the court will strongly criticise (and punish by a costs order) a creditor seeking to gain a tactical advantage by bringing, or even threatening, winding up proceedings in the wrong circumstances.
We have extensive insolvency experience and with the assistant of our associated company, Portland Business & Financial Solutions, we are able to offer professional advice as to the suitability of presenting a winding up petition.