“Getting a court judgment against a debtor is great, finally some validation that you were right all along (usually after a long fight). Unfortunately, turning that judgment into actual money can be a whole separate adventure, especially when the debtor suddenly discloses, they’re ‘unable’ or simply unwilling to cooperate,” says Alice Soulsby, Litigation Solicitor at Nalders.
There are, however, various methods you can use to enforce your judgment and get your money back. Choosing the right method can save you time, money and stress and ensure that you recoup sums that are rightfully owed to your business as quickly as possible.
Alice provides a brief overview of the methods of enforcement that are available, and how your solicitor can help you decide upon and take the best enforcement action to obtain payment.
Writ of control and warrant of execution
This is a method of debt collection whereby a court enforcement officer (a bailiff) will enforce your debt for you. In the County Court this is called a ‘writ of control’ and in the High Court this is called a ‘warrant of execution’.
It is necessary for your solicitor to apply to the court to issue a writ or warrant, happily though this does not often require a court hearing. Once the bailiff is provided with the court order, they can attend the debtor’s premises and take goods to the value of the debt and your costs, and sell them in order to meet the target amount.
This can be a very effective method of obtaining funds. The downside is that there may not be goods of sufficient value to meet your debt, or goods may be owned by a third party, such as under a hire purchase or lease agreement.
Charging order and order for sale
This is where a charge is granted by a court over a debtor’s beneficial interest in land or other assets. This is also how mortgages are secured. Once a charging order is registered, the debtor cannot sell that property without first paying its debts from the sale proceeds. This can be used in addition to other methods of enforcement and can be very effective. It has the benefit of placing your debt as a priority above other unsecured debt owed by the other party.
To obtain a charging order, you must first apply to the court for an interim order, after which there is a period for the filing of any valid objections. If no objection is received within the required time and the court considers the remedy appropriate, a final charging order will be granted. If payment still does not follow, your solicitor can then apply to the court for an order for sale of the charged property, including directions for how the sale is to be conducted. The costs of this process can usually be incorporated into the order.
If the debtor is cash poor but asset rich this can be a very good way of enforcing your debt, especially if it is a significant sum.
The downside is that this process can be quite slow, as it is not possible to obtain an order for sale before going through the first two processes. You may also find that your charging order ranks behind others who take priority (with charges registered before yours), so it is important that the asset being charged is of sufficient value to cover all possible charges before taking this action.
Third party debt order
A third party debt order allows you to obtain funds owed to your debtor by a third party, so that the money is paid to you rather than passing through the debtor first. This can be an effective tactic where you are dealing with a company that has a transparent supply chain and the debtor is due payment from another business higher up that chain. Those funds can be redirected to you instead. It is also possible to intercept money held by a bank for your debtor, although there is often uncertainty about the balance in the debtor’s accounts, and the bank will not disclose that information until the order is made.
It is necessary for your solicitor to apply to court for an application for an interim third-party debt order before an application for a final third party debt order will be given.
The benefit of these orders is that they can be quick, and it means a third party is obliged to make payment to you directly rather than to your debtor. However, the downside is that it is necessary to make two applications to the court before this can be effective. There also needs to be sufficient cash available to make this worthwhile.
Attachment of earnings orders
An attachment of earnings order allows a creditor to obtain payment directly from a debtor’s wages where the debtor is employed and has fallen behind on a County Court Judgment.
The process begins with an application to the court, supported by any available information about the debtor’s employment. Once the application is issued, the court serves the debtor with a notice requiring them to complete a statement of means, which sets out their income, essential expenses, and employment details. The court then considers this information and sets a protected earnings rate to ensure the debtor retains sufficient income for basic living costs. If the court is satisfied that the order is appropriate, it directs the debtor’s employer to make regular deductions from the debtor’s wages and to forward these payments to the court, which then passes them on to the creditor.
The order remains in place until the judgment debt is repaid in full, although it can be varied or discharged if circumstances change.
However, this method has clear limitations. It cannot be used if the debtor is unemployed, self‑employed, or working in roles excluded from the scheme, and even where the order is made, deductions are limited by the protected earnings rate, which can result in relatively small monthly payments and a lengthy recovery period. It is therefore less suitable where the creditor requires swift repayment or where the debt is significant.
In practice, an attachment of earnings order works best as a steady but slow‑burn enforcement option, and may be less attractive where the debtor has assets that could be realised more efficiently through alternative methods.
Order to obtain information
An application for a debtor or company officer to attend court for questioning is made after judgment. It can be a useful step when you have little or no reliable information about the debtor’s financial position, employment, or assets.
It compels the debtor to attend court and provide a sworn statement of means, including details of income, property, bank accounts, liabilities, and any other factors affecting their ability to pay. This can be particularly effective where the debtor has been evasive or uncooperative, as failure to attend can result in the court issuing a suspended committal order or, ultimately, a warrant for their arrest.
However, this process does not, by itself, produce payment. It is primarily an information‑gathering tool, and its value depends entirely on whether the debtor provides accurate information and whether they actually have assets or income that can be enforced against. It is therefore most useful as a precursor to choosing the correct enforcement method, rather than a solution in its own right. Where speed is essential or where you already know the debtor’s circumstances, other enforcement options are likely to be more efficient.
Company debtors: Liquidation, administration, or receivership
If standard enforcement methods do not work then it may be necessary to move the debtor company into a formal insolvency process, such as liquidation, administration, or receivership.
- Liquidation is a final solution for a company. You can issue a winding up petition against the debtor company in court and, if granted, the company must cease to trade immediately and an Official Receiver will be appointed over the company. They will gather in all of the company’s assets, and pay the company’s creditors from those assets in a specific priority order set out in insolvency legislation.
While this is sometimes the only way to obtain payment from a non-cooperating debtor, unless you have a secured interest such as a fixed or floating charge, or a personal guarantee, you will rank equally with all unsecured creditors and are therefore unlikely to be paid in full.
- Administration is an alternative method that can be used by a creditor of a company. It differs from liquidation in that it is intended to be a rescue process, or at least a process that will bring a better return for creditors than liquidation, because often a company will continue to trade in administration, even if just for a short while. Therefore, a business or asset sale may obtain a higher return than a liquidation sale of assets. Whether this is the best option for you will depend on the type of business of the debtor.
The administrator will run the company and will pay creditors as they are able to in due course, under the same legislative priority order as liquidation.
With both procedures it can take some time to recover your money, and even if you do, depending on the financial position of the company, and your own secured status, you are unlikely to recover it all. It is, however, a good way of focusing a company to pay their debt and ensuring they take your payment request seriously.
- Receivership may be an option if you are a secured creditor with a charge over a company – either fixed or floating – it is possible to appoint a ‘receiver’ who will be appointed over the secured assets under the charge only, and will sell these or obtain rent on these in order to repay your debt, depending on the asset that is secured by the charge.
This method will often be used once a charging order has been granted over a company and/or its assets, and can be very effective in obtaining a return on money owed.
Individual debtors: Bankruptcy
Where the debtor is an individual rather than a company, bankruptcy may be considered if conventional enforcement methods fail to produce payment.
A creditor can petition for the debtor’s bankruptcy provided the statutory threshold is met, and if a bankruptcy order is made, a trustee is appointed to take control of the debtor’s assets, investigate their financial affairs, and distribute any available funds to creditors.
Bankruptcy is often viewed as an unattractive option for creditors because recoveries are frequently limited; funds are shared among all creditors in a strict statutory order and, in many cases, the debtor has little equity or assets available for realisation. Despite this, bankruptcy can still be the preferred approach in specific circumstances, particularly where the debtor owns valuable assets that cannot be reached effectively through other enforcement routes, or where the seriousness of the process prompts the debtor to engage or to settle the debt to avoid the petition progressing.
In practice, it can be a useful last resort for compelling cooperation or bringing matters to a head, even though full recovery remains unlikely.
How we can help
If you have an uncooperative and difficult debtor, sometimes obtaining a judgment debt is just the beginning of your journey to recover your debt. We will review the financial position of the debtor with you to decide upon the best and fastest way of enforcing that judgment debt for you.
For further information, please contact our Litigation Department. Nalders LLP has offices in Penzance, Helston, Camborne, Falmouth, Truro, Newquay and St Austell.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.