Written by Sara Beaumont, Director and Head of Commercial Litigation at WHN Solicitors. Sara has specialised in commercial dispute resolution since qualifying in 2008, and leads WHN’s dedicated commercial debt recovery team, advising businesses on all aspects of debt recovery from pre-issue through to enforcement. She acts for clients ranging from sole traders and SMEs to PLCs across a wide range of contractual and insolvency matters.
Obtaining a county court judgment (CCJ) is only half the battle. If the person or company ordered to pay you fails to do so, the court will not chase them on your behalf. It is up to you, as the judgment creditor, to decide how to enforce the judgment and recover what you are owed.
This guide explains what a judgment debt is, how to find out whether enforcement is worthwhile, and the five main options available for enforcing a CCJ.
What is a Judgment Debt?
A judgment debt is the amount of money a court has ordered someone to pay you. Once a county court judgment is made, the person or company who owes the money becomes the “judgment debtor” and you become the “judgment creditor”.
The judgment debtor is legally required to pay within the time specified by the court, usually 14 days. If they fail to pay, the debt does not simply disappear. You have the right to take enforcement action to recover what you are owed, but you must apply to the court to do so. The court will not act on its own.
Many people assume that winning a court case means they will automatically receive payment. Unfortunately, a significant number of CCJs go unpaid, and those creditors must take additional steps to collect the money.
How Long Do You Have to Enforce a CCJ?
You have six years from the date of the judgment to enforce it. After this six year period is up, you will need the court’s permission to take enforcement action — permission which may not be granted.
If you have an unpaid judgment approaching the six-year mark, you should seek advice as soon as possible. Delays can also make enforcement more difficult in practical terms, as debtors may dispose of assets or become harder to trace over time.
Before You Start: Finding Out What the Debtor Owns
Before spending money on enforcement, you should consider whether the judgment debtor has assets worth pursuing. Enforcement costs money, and if the debtor has nothing of value, you may simply be throwing good money after bad.
As much information as possible should be gathered about the judgment debtor and their financial situation. This includes:
- Any known addresses.
- Contact telephone numbers.
- Email addresses.
- Date of birth.
- Any links to businesses or employment.
Asset Searches
One option is to instruct an enquiry agent to conduct an asset search. An investigator will carry out various checks, including a bankruptcy search, a Land Registry search (to establish whether the debtor owns property), and searches to identify any company directorships or employment.
You can also conduct some basic searches yourself. Companies House provides free information about company directors and accounts, the Land Registry allows you to check property ownership for a small fee, and the Insolvency Register shows whether an individual is bankrupt or subject to an Individual Voluntary Arrangement.
Order to Obtain Information
If you cannot find out enough about the debtor’s finances, you can apply to the court for an order requiring the debtor to attend court and answer questions about their assets, income, and outgoings. This is sometimes called an “oral examination”.
Failure to attend without good reason is a criminal offence, so this procedure can be effective in obtaining information. However, it does alert the debtor to your intentions, which may give them time to move assets.
Five Ways to Enforce a County Court Judgment
There are several methods available for enforcing a CCJ. The most appropriate option will depend on the debtor’s circumstances, the size of the debt, and what assets they have. In some cases, you may need to use more than one method.
Common methods used to enforce a county court judgement include:
1. High Court Enforcement
High Court enforcement is one of the most popular and effective methods of recovering a judgment debt. It involves instructing High Court Enforcement Officers (HCEOs) to attend the debtor’s premises, demand payment, and if necessary, take control of goods to sell at auction.
For debts of £600 or more, you can transfer your CCJ to the High Court for enforcement. For any debts over £5,000, you must use the High Court rather than county court bailiffs.
High Court enforcement can be executed quickly, often within days of instruction. The fees are added to the debt and recovered from the judgment debtor, so if enforcement is successful, the process should cost you very little. HCEOs are paid on results, which means they are often more motivated and effective than county court bailiffs, who receive a salary regardless of outcome.
However, this method depends on the debtor having goods of sufficient value. If they have nothing worth seizing, or if their valuable items are subject to hire purchase agreements, enforcement may not succeed.
2. Charging Order
A charging order secures your judgment debt against property or land owned by the debtor. Once registered, the charge prevents the property from being sold or remortgaged without your debt being paid from the proceeds.
This is essentially a deferred method of enforcement. You may have to wait until the property is sold before you receive payment, unless you apply for an order of sale to force the issue. Courts can be reluctant to order forced sales, particularly where the debt is modest compared to the property value or where the property is a family home.
A charging order is most effective where the debtor owns a property with significant equity and is the sole owner. If there are existing mortgages or other charges registered against the property, those creditors will be paid first, and there may be little left for you.
The advantage of a charging order is that your debt is secured. Interest continues to accrue at 8% per year on judgment debts of £5,000 or more, so the amount owed can grow significantly over time.
3. Attachment of Earnings Order
An attachment of earnings order requires the debtor’s employer to deduct a specified amount from their wages each pay period and send it directly to you until the debt is cleared.
This method can be extremely useful as a prompt for payment. Many debtors will pay voluntarily rather than have their employer become aware of a judgment debt against them.
However, attachment of earnings orders are only available against individuals who are employed. You cannot use this method against someone who is self-employed, unemployed, or against a company itself. The court will also ensure the debtor retains enough income to meet their essential living costs, so the monthly payments may be relatively small. For large debts, this can mean recovery takes a significant amount of time — sometimes even many years.
4. Third Party Debt Order
A third party debt order allows you to intercept money that is owed to the judgment debtor by a third party, most commonly a bank or building society holding the debtor’s funds.
The court first makes an interim order freezing the account. The debtor is not told in advance in order to prevent them from attempting to move the money. A hearing then takes place to decide whether a final order should be made requiring the third party to pay the frozen funds to you.
This method can be highly effective if you know the debtor has money in a bank account and you can time your application to coincide with when funds are likely to be present, such as just after payday. However, the order only freezes money held on the day the bank receives it. Any funds paid in afterwards are not caught.
Third party debt orders can also be used in other situations. For example, if Mr X owes you money but you know that Mr Y owes money to Mr X, you can seek an order requiring Mr Y to pay you directly. In commercial property disputes, we often see this used where a tenant owes rent arrears and has sublet to a subtenant. The third party debt order can require the subtenant to pay rent directly to the head landlord until the debt is cleared.
You cannot use a third party debt order against a joint bank account unless all account holders are judgment debtors.
5. Winding Up or Bankruptcy
For larger debts, insolvency procedures can be used as a method of enforcement, though they should generally be considered a last resort.
If the judgment debtor is a company and the debt exceeds £750, you can present a winding up petition. The first step is usually to serve a statutory demand giving the company 21 days to pay. If payment is not made, you can petition the court to wind up the company. The threat of winding up is often enough to prompt payment, as directors face serious consequences if their company is wound up for unpaid debts.
If the judgment debtor is an individual and the debt exceeds £5,000, you can petition for their bankruptcy. Again, a statutory demand is usually served first.
Be aware that if a winding up or bankruptcy order is made, you will not necessarily recover your debt in full. An insolvency practitioner will be appointed to collect the debtor’s assets and distribute them among all creditors according to strict rules. Secured creditors and certain preferential creditors are paid first. As an unsecured creditor, you may receive only a fraction of what you are owed, or nothing at all.
The courts also look unfavourably on the use of insolvency procedures purely as a debt collection tool, and may dismiss petitions or award costs against you if the debt is genuinely disputed.
Which Enforcement Method Should You Choose?
The right approach depends on your specific circumstances:
- If the Debtor has Valuable Goods/Inventory/Equipment: High Court enforcement is often the quickest and most cost-effective option.
- If the Debtor Owns Property: A charging order secures your debt and ensures you will be paid when the property is eventually sold. If there is substantial equity and you need payment sooner, you may be able to apply for an order for sale.
- If the Debtor is Employed: An attachment of earnings order provides a steady stream of payments, though recovery may be slow for larger debts.
- If the Debtor has Money in the Bank: A third party debt order can freeze and seize funds, but timing is critical.
- If the Debtor is a Company Ignoring a Judgment: The threat of a winding up petition often focuses minds quickly.
In many cases, a combination of methods may be appropriate. For example, you might apply for a charging order to secure the debt while also pursuing High Court enforcement to try to recover payment more quickly.
Can You Claim Interest on a Judgment Debt?
Yes. Statutory interest accrues on judgment debts of £5,000 or more at a rate of 8% per year. Interest runs from the date of the judgment until the debt is paid, so on a long-running debt, the interest alone can become significant.
The interest is added to the amount you can recover through enforcement. This is one reason why delays in enforcement can sometimes work in your favour, provided the debtor has assets to pay when you eventually enforce.
What if the Debtor Has No Assets?
If the debtor genuinely has no money or assets, enforcement may not be worthwhile at the present time. You cannot get blood from a stone.
However, circumstances change. A debtor who has nothing today may inherit money, start a new job, or acquire property in the future. You have six years to enforce the judgment, so it may be worth waiting and monitoring the situation rather than spending money on enforcement that is unlikely to succeed.
An order to obtain information can help you assess the debtor’s current position and make an informed decision about whether to proceed.
How WHN Solicitors Can Help
Enforcing a judgment can be as challenging as obtaining it in the first place. Choosing the wrong enforcement method wastes time and money. Choosing the right one can mean the difference between recovering your debt and writing it off.
Sara Beaumont is a Director at WHN Solicitors and Head of Commercial Litigation, based at our Bury office. Sara leads WHN’s specialist commercial debt recovery team and has over 15 years’ experience advising businesses on dispute resolution and enforcement, acting for sole traders, SMEs, and PLCs alike. She is experienced in all enforcement methods covered in this guide and in alternative dispute resolution, including mediation.
If you have a judgment debt that remains unpaid, or are considering court proceedings to recover money owed to you, contact Sara directly:
- Telephone: 0161 761 8073
- Email: sara.beaumont@whnsolicitors.co.uk
Alternatively, fill in our enquiry form to request a call back as soon as possible.
This article is for general information only and does not constitute legal advice. Please contact us to discuss your specific circumstances.
