If they can’t pay, can I really take it away?

By Louise Burgess on

Have you provided goods or services and your customer has not paid up? There are various ways in which you can enforce the unpaid debt against the debtor. We have previously looked at enforcing judgments against companies, but what about where the debtor is an individual? We look at the different enforcement methods available.

First things first

Before you can call the bailiffs in, you need to give your debtor a chance to pay. This will usually involve writing an initial letter, and then issuing proceedings in the County Court. If the debtor is aware that the debt is payable but will not or cannot pay, the debt is unlikely to be contested. Assuming the debtor does not defend the claim, you will be entitled to make an application to obtain default judgment. This means, the judge will issue an order for the debtor to pay your debt.

In some circumstances, the court order is enough to make your debtor arrange payment of the debt. However, if you still find that the debtor is refusing to make the payment in full or discuss payment options with you, you may want to consider enforcement. There are a number of different enforcement methods, at least one of which should be applicable to your case.

Attachment of earnings

An application is made to court for the debtor’s employer to deduct part payments towards the debt from the debtor’s salary. This will get paid directly to you.

This of course only works where the debtor is employed, and you know who the employer is. Often the threat of such an application can encourage a debtor to come forward. Most people do not want the employers knowing of their money matters.

Instruct bailiffs

One option is to make an application to court for a warrant to instruct bailiffs. The bailiffs will visit the debtor and seize any assets up to the value of your debt. However, there are certain exclusions meaning some assets cannot be seized. This is particularly useful where the debtor runs a business and might have stock or equipment that can be seized.

Charging order

If the debtor owns property, one option is to apply for a charging order against the property. This means that the debtor will be unable to sell or transfer the property without repaying the debt. While you will not recover the debt immediately, the debt will be secured. In some circumstances, you may later be able to apply to the Court for an order that the debtor sells the property. This will ensure that you recover your money sooner.

Bankruptcy

On of the most severe methods of enforcement is to serve a statutory demand followed by an application for bankruptcy if payment is not made. This option is available to those with debts over £5000.00. The threat of bankruptcy again will often prompt people to pay up.

Bankruptcy can be less effective if the debtor has a number of other creditors as there may not be enough money to go around everyone.

If you are unsure of whether the debtor has any assets, before enforcing the judgment you may wish to apply to court for an order for questioning. This will mean the debtor must disclose information about assets, income and outgoings so that you can decide which of the enforcement methods to take.

If someone owes you money and you would like advice, our debt recovery team is here to help. Call us on 0800 988 7756.

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