Recovery of Judgement Debt

Court proceedings are always stressful, so it can be a great relief when your trial is over and you have won your case. After winning your case, however, then comes the problem of collecting what you have been awarded by the Court. Collecting a judgment can take time, money, effort and more than a bit of patience.

Ascot Lawyers has an experienced debt recovery team who can advise and assist on all aspects of debt recovery. For more information or advice contact Simon Duncan on 01344 852 848

Misconceptions

Many people who have won a claim have faced an unpleasant surprise after the judgment: They usually discover to their shock that courts don’t collect your judgment  debt for you. While many debtors willingly pay their debt, many will try to avoid paying you even a penny. You, the Claimant, have to collect the money awarded to you by the court.

Write a Letter Asking for Payment

Don’t try to start collecting your debt until the court stipulated time within which to begin enforcement action (usually 14 days) has passed. If you start too early, the court may delay collection even further. Begin by sending a polite letter via certified post. Be polite in your letter, but you can let the debtor know that an unpaid judgment will reflect badly on his credit report and that you do plan to take other enforcement actions if you don’t get a response.

Tracking Employment and Attachment of Earnings

If your debtor will not co-operate, you have the right to take assets and income without their cooperation. To do this, you will need to know where the debtor works, who they bank with and details of any property they own. Credit reports often list a person’s place of employment. If you have ever done business with your debtor, you may have the bank name from any checks sent to you at the time of entering the transaction.

Tracking Assets for Charging Order Purposes

Property ownership is a matter of public record, and you can have a search done at the Land Registry to see if the debtor owns property and where it is located. Obtaining this information enables you to see if a judgment debtor owns a property with some equity in the property to ultimately satisfy the judgment debt through placing a Charge on the property. This action will often lead to payment of the debt, as sale of the property cannot be effected in most cases without discharging the sums owed to a Charge holder.

Bankruptcy, Winding Up Proceedings and Seizures

Different rules apply to debt collection from an Individual and from a company or trading entity. A judgment creditor can make applications to the court for a debtor to be declared bankrupt or in the case of a company, a winding up petition on the basis that the debtor is unable to pay its debts. Usually on sucessful application and following a bankruptcy order a trustee is appointed to administer the assets of the debtor and distribute any proceeds to creditors. The trustee is also empowered to look into the past dealings of the bankrupt entity spanning the last five years to see if their was any suspicious transfer of assets probably carried out by the debtor in order to hide assets from his creditors.

It is also possible for a Judgment Creditor to apply for a Third Party debt Order for the purposes of seizing a debtor’s funds held either in a bank, building society or owed to the Debtor by a third party . Generally, once you have your judgment and have identified the debtor’s employer or the location of their assets, you can appraise the best steps which guarantee prompt satisfaction of the judgment by instructing your solicitor to commence enforcement action.

Time Frame

The Statute of Limitation applicable to Judgment debts provides that recovery action should be commenced within 6 years from the date of judgment so it is important that you be proactive in collecting your judgment debt before the time runs out or most importantly to avoid a situation whereby the debtor further dissipates the assets and in essence leaves you with a worthless judgment. It is possible to enforce a judgment that is older than six years but much depends on any enforcement action that may have been taken within the six years and what payments have been received.

For more information or advice contact Simon Duncan on 01344 852 848.

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