A Guide To Debt Collection Via The County Court

When it comes to collecting money owed to you, there are a lot of different routes you could go down. From perusing the money yourself, to hiring a debt collector like us, all the way to legal proceedings. The good news is, if you choose to use a debt collector, they can guide you through the legal process and provide you with the documentation you need, so you stand a better chance of recovering the debts owed to you. Even so, we know the process can be daunting, which is why we’ve put together this quick overview of the collections process via county court, and what you can expect at each stage.

The Court Process

If your debt has gone unpaid for a while, and you have exhausted all other routes of collection, your may decide to pursue a claim through county court. In general, it’s recommended you have a professional on side to help advise you – either a debt collector or a solicitor. You apply for a court date through Small Claims Court, and will be asked to submit the debt details provide evidence and make your case. The debtor will be verified, and you will be asked to send a Letter Before Action if you haven’t already. This is a legal requirement to formally pursue a debt, and the letters lays out the debt amount owed and date the payment must be made by. If that letter goes unanswered or the debt remains unpaid, then the case moves forward.

If your claim is successful, a County Court Judgement (CCJ) will be made. This is a type of court order that’s registered against a debtor who has failed to pay and/or failed to respond to the court action taken against them. This will go on the businesses record and stay there for 6 years, making it extremely difficult to get credit. The only way to stop this is for the debtor to pay within 1 month.

Warrants of Execution

If your claim is successful, you become what is known as a judgement creditor. If the debt remains unpaid even after the court has demanded the debtor pay, then you can issue something called a warrant of execution. This means the county court bailiff will visit the debtor, and either collect the money owed or seize goods of a value that can be sold to satisfy the judgement debt. They aren’t allowed to seize household goods, or the defendant’s ‘tools of the trade’ to do this.

However, it is important to note that the county court can only enforce judgement in this way if the debt owed is under £5,000. If the debt is more than this, then the process of enforcement by warrant has to be done through the High Court, which is a much more complicated and expensive procedure.

Third Party Debt Orders

A third party debt order is a different kind of approach used by Small Claims Court, and is designed to stop the defendant taking money out of the business bank account. The money you’re owed is paid to you direct form the account, at which point the account will be released. A third party debt order can also be sent out to anyone who owes the defendant money to ensure smooth cashflow for all.

The organisation or person that’s holding the money is referred to as the ‘third party’, and it’s job is to prevent the defendant from having any access to the money until the court decides whether or not the money should be paid to you, and if yes, until it is paid. The money held by the third part must be solely for the debtor. So you can’t, for example, apply for a third party debt order against a joint bank account, unless the judgement debt is owed by all of the account holders.

Charging Orders

This is an order of the court placing a charge on the judgement debtor’s property, such as a house of a piece of land. The charge applied will be the amount you are owed. Charging orders usually get you your money immediately, but it may also safeguard your money for the future. If the judgement debtor owns stocks or shared, or has a fund or money in court, the court can also put a charge on these in the same way. This can be done whether the defendant owns the property in their name, or shared it with someone else, and they will not be able to sell or re-mortgage the property without paying the judgement creditor (you). If this doesn’t work, an application can be made for an order forcing the defendant to sell the property and pay money owed that way.

Order to Obtain Information

This isn’t technically a method of enforcement, but it is a useful tool for deciding how to pursue the debt. The company’s financial means are subject to an examination by an Officer of the Court, which will give you more information about the debtor company and how best to enforce any judgement.

If you decide to pursue legal action to collect a debt, it’s always best to have an expert on your side. At Debtcol, we are not only able to guide you through the process, but we can issue proceedings in your behalf, so you don’t have to worry about a thing. If you would like more information, just get in touch with the team today.