Is your judgment worthless?

Little is more frustrating to the creditor than finding after he has won his case in court that his judgment debtor still will not pay. This company regards suing as a last resort. And certainly recovering money from judgment creditors is about the most difficult work we do. The trick is to embarrass the debtor. We do that legally. There are many ways to skin a cat.

Means of enforcement

Chief amongst them is the traditional remedy of appointing bailiffs. County Court bailiffs have to give notice that they are coming. This gives the debtor too much scope for evasion. We prefer not to use them. High Court Bailiffs are more effective. They work on commission! We arrange for the debt to be transferred to the ambit of the High Court and work closely with two reputable firms. This remedy is, of course only effective where there are assets to seize. The assets need to be of sufficient value (they often fetch a pittance on sale) but I have seen a significant sum recovered for a PR firm from a glitzy restaurant just by seizing the chairs!!

A Garnishee Order now renamed a “Third Party Debt Order” is another weapon. It works best as a threat. In practice it is actually self-defeating. Few debtors like their employer to know that they are in debt and perhaps more to the point, no employer likes the work of deducting from salary and sending part to the court. There is apocryphal evidence that it generally leads to the sack. And the debtor has to start again, although these days by law the ex-employer has to tell the court the employee’s NI number and Social Security will disclose to the court, where next the employee is working (if he is working).

If the judgment debtor has property, then we can go for a Land Charge.

But the means we most favour is a Form N316 (Form N316a for limited companies), a judgment summons. It works a treat. It is a summons to the debtor or CEO of a company to attend court to explain ON OATH his failure to comply with the Court Order to pay within 14 days. Ignoring the summons is imprisonable. At court the debtor has to attend with bank statements, rent books details of all his assets, his car etc and any other documents you, the creditor, may suggest so that the court can be told who he owes to and who owes to him, what are his debts and what are his assets. I always suggest the creditor ask to see the last three year’s tax returns, credit card statements and all insurance policies. The creditor need only attend the questioning if he wants, whilst to the debtor it is a hugely bothersome exercise. Most avoid it and pay up.

L.M.Wise FCA