Asset Searches Explained

Winning a judgment against a customer who hasn’t paid you can feel like the finish line. The court agrees that the debtor owes you money! That means they have to pay you now. You’ve won.

Well, yes. But it isn’t the end of things. The court order tells a debtor they owe you money, but it doesn’t put that money in your account. If the debtor still doesn’t pay, you need to find a way to collect, and there are a few different ways you can do that. The right way depends entirely on what they own, what they owe to others, and where their money actually sits. That’s where an asset search comes in, and it’s one of the most useful, and underused, steps in debt recovery.

What Is an Asset Search?

An asset search is the process of finding out what a person or a company owns, and what claims already exist against it so that you can judge whether recovery is realistic, and which route would most likely work.

The actual process is built on public records, like property registers, company filings, insolvency registers and records of existing court judgments. What it doesn’t do is give you a window into someone’s bank account, since private information is protected.

Why Do an Asset Search?

The simple answer is that it stops you from throwing good money after bad. After all, taking enforcement action costs money, and spending it chasing someone with nothing to give can leave you worse off than you were before. And if your debtor has no assets, then the judgment isn’t worth much at all.

Which is why starting out with an asset search can help you:

Decide whether to proceed. Sometimes the most sensible commercial decision you can make is to stop, or to negotiate a payment plan instead.

Choose the right enforcement method. Property points towards a charging order, a regular salary towards an attachment of earnings, and a known bank account towards a third-party debt order.

See who else is in the queue. If there are existing mortgages, charges and other creditors sitting ahead of you in the queue, it could eat into any value.

Tell ‘can’t pay’ from ‘won’t pay’. A debtor with a healthy balance sheet and new venture is a very different recovery prospect from one who is genuinely insolvent.

How an Asset Search Works

Which records we check will depend on whether you’re dealing with a company or an individual. But essentially, you’re looking for evidence of any assets the debtor has using a range of available records and resources.

Individuals

• Land registry: In England and Wales, we have the Land Registry, which keeps a record of all land and who owns it. The title register shows the registered owner, whether it’s jointly held, and any mortgages or charges already secured against it. Scotland and Northern Ireland have their own registers.
• Insolvency records: The Individual Insolvency Register shows whether someone is bankrupt, subject to a Debt Relief Order, or an Individual Voluntary Arrangement.
• Register of judgments: The Registry Trust holds records of all County Court Judgements and other court orders. For a small fee, you can see whether other creditors have already taken action.
• Online presence: A debtor who is trading, advertising or opening something new may have income they haven’t mentioned to you.

Companies

• Companies House: Field accounts available from Companies House will show profitability, and the register shows any charges that are already secured against the company, like bank loans.
• Land registry: Just like individuals, the Land Registry shows any land or buildings the company owns and what’s secured on them.
• The Gazette and winding-up records: These show whether the company is in liquidation or facing a wind-up petition, which would affect your position as a creditor.
• Directors and connected companies: Following directors to other businesses can reveal whether a company is being wound down while a similar one carries on trading.

What to do With the Results

Once you know what’s there and that it’s worth pursuing, you have 5 main options for enforcing a court judgment.

A Warrant of Control: An enforcement agent takes control of goods to be sold.

Attachment of Earnings Order: Payments are taken directly from the debtor’s wages.

Third-Party Debt Order: The debtor’s money is held by a third-party (usually a bank) and frozen and paid to you. You’ll need to know where the account is, and it won’t normally work against a joint account unless the debt is owed jointly by all the account holders.

Charging Order: The debt is secured against the debtor’s property. This can take time, and courts can be reluctant to order a forced sale, particularly of a family home or where the debt is small compared with the property’s value.

Winding Up or Bankruptcy: A more serious step, which can be effective where a debtor has assets but won’t pay.

Each option has its own rules and costs, so it’s worth getting advice before committing to one.

An asset search gives you a snapshot of the state of the company or individual you’re pursuing. But remember that assets move, property gets sold, accounts get emptied, companies get wound down. That’s why timing is also important, and why searching early, before a debtor has any reason to rearrange things, generally gives the most useful results.

At Debtcol, we understand contract law and debtor behaviour across many commercial sectors, and we help businesses work out the most effective route for each debt before costs mount. If you’ve got a debt you’re not sure is worth pursuing, find out more about our credit services and business investigation or get in touch with our team today.