Obtaining and enforcing a CCJ may seem straight forward but that is not always the case. A CCJ ratifies a debt and makes it official that the debtor owes money and it must be repaid. Whilst obtaining a County Court Judgment (CCJ) is a often a necessary step in some situations, it does not guarantee the debt will be repaid.
When a CCJ is not repaid despite a request by the court to do so, there are various options available to the claimant and creditor. CCJ Enforcement has been on the rise for a number of years and utilizing the best option can make the difference between getting the CCJ paid or having an unpaid CCJ.
CCJ payment period expiration
Once a County Court Judgment has been issued, the debtor needs to pay the CCJ within 30 days or it will be entered on their credit file. If the debtor fails to make payment then CCJ enforcement action can be taken.
Enforcing a CCJ options
Before choosing a CCJ enforcement option, there are a number of things that the creditor needs to consider. Obtaining a CCJ can be a straight forward process but enforcing it rarely is.
The creditor needs to understand if the debtor has the financial means to pay the debt. This can mean by way of funds held in a bank account or goods and assets to cover it. Maybe the debtor owns a property for which the debt can be secured on.
If the debtor has no assets, no income and no property ownership, CCJ enforcement action maybe fruitless. It is always important to remember that CCJ enforcement does not come with any guarantees.
If the debtor is heavily in debt then it may also be worth checking the insolvency register. You can do this for free via the government insolvency register here
Main options available to a creditor for enforcing a CCJ.
Bailiffs or High Court Enforcement
This is where the debtors address is visited in order to obtain payment of seize goods to cover the value of the CCJ.
Probably the most popular method of CCJ enforcement among Businesses and Individual creditors. Debts under £600 can only be collected by County Court Bailiffs. A warrant of control can be applied for via the County Court. This was previously known as a warrant of execution.
If the CCJ is over £600 then the CCJ be be transferred up the High Court and a ‘Writ of control’ obtained. This allows High Court Enforcement Officers to act on the creditors behalf.
The use of High Court Enforcement Officers is considered a more robust and expedient method when compared with County Court Bailiffs.
Charging order on a property
Payment of a CCJ can be secured by getting a charge order on the debtors property. This is not the quickest way for enforcing a CCJ but at least secures the debt.
An Order of Sale can then be applied for to force the debtor to sell the property. This is not always a straight forward exercise and the court will take into account the circumstances of the debtor before allowing this.
Third party debt orders on the debtors bank account
A very efficient way to enforcing payment of a CCJ is to freeze a debtors bank account. The can be used for both unpaid Business CCJ’s and Personal CCJs. This can allow for funds to be extracted from their bank account to pay the CCJ in full. This is a worthwhile method of CCJ Enforcement where the creditor knows there to be adequate funds in the account.
Attachment of earnings – deduction from wages
This is suitable for enforcing a CCJ against an individual only. It allows deductions to be made from a debtors wages in order to pay off the CCJ in installments. Worth noting that debtors have a ‘protected earnings rate’ and are allowed to take home a minimum amount of their wages.
Not the fastest method of CCJ enforcement but still effective.
Insolvency Proceedings for a CCJ
If it is abundantly clear that the debtor (business and Personal) does not have sufficient means to pay the CCJ then a last resort can be insolvency proceedings.
This is where an individual can be made bankrupt or a company forced into liquidation. The aim of insolvency proceedings is to liquidate all assets and pay off creditors debts. It can be a complex and timely exercise. Again, this comes with no guarantees and a creditor should do their due diligence beforehand.
It can be expensive for all parties and should only be used as a very last resort. However, it is worth nothing that this option is the only option for some creditors when dealing with difficult or evasive debtors.
Before any creditor sets out on a CCJ Enforcement mission, it is essential they do their homework before hand. If the debtor has absolutely no means of paying a debt then CCJ enforcement is not a viable option.
A CCJ will stay on a Debtors credit file for six years. It could be that whilst at any given moment in time, CCJ enforcement is not feasible, the debtors circumstances may change in a couple of years so there is always hope for the creditor.